Mass General Brigham’s big cost-cutting plan approved by state

The Massachusetts Health Policy Commission on Tuesday unanimously approved Mass General Brigham’s 18-month plan to curb excessive spending.

In January, the commission ordered Mass General to come up with a performance improvement plan after it exceeded the commission’s spending growth benchmark by $293 million from 2014 to 2019.  The commission said Mass General’s actions could jeopardize the state and its care delivery system.

This is the first time the commission went through the approval process for  a performance improvement plan.

Boston-based Mass General revised its annual savings target to $127.8 million, an increase from the $70 million it proposed in May. 

The plan will be implemented from Oct. 1 to March 31, 2024. 

The largest portion of savings, $90 million a year, would come from changes in commercial pricing strategies, such as shifting pricing at outpatient facility MG West to a community hospital rate schedule. Mass General has reduced rates charged to the Mass General Brigham Health Plan for ConnectorCare members.

“I know there’s been a lot of back and forth between the parties,” Commission Vice Chair Martin Cohen said at Tuesday’s meeting. “This PIP won’t change the price disparities that exist in our state, but it does recognize that price matters to ensuring that healthcare is accessible and affordable for residents of the Commonwealth.”

Mass General plans to save another $32.4 million a year by reducing unnecessary hospitalizations, emergency department visits and other expenses. To do that, the health system will expand its integrated care management program, a high-risk care program, by more than 4,000 patients, primarily those covered by commercial payers and Medicaid. There are roughly 15,000 patients in the program. 

Mass General will also work to reduce post-acute admissions and unnecessary outpatient imaging.

The health system will continue to invest in its at-home hospital model, for which it has negotiated commercial payer rates less than those for in-hospital services. It also plans to continue virtual care, such as telehealth, and to shift care to community hospitals and ambulatory centers. 

Another key part of the revised plan was ensuring Mass General will make the plan sustainable and continue the cost-cutting strategies after the implementation period. Commission members acknowledged the health system’s efforts to implement the changes amid a financially challenging period for the industry.

Mass General will report any progress to its own leadership each quarter and to the commission at least every six months starting in April.