By Andy Metzger

State House News Service

BOSTON -- Fed by a surcharge on the most asset-rich hospitals authorized under the state's health-care cost-containment law, a new state commission is preparing its first offering of grants to other hospitals.

"We have $40 million in this first year, and less than that in the years after," said Health Policy Commission Executive Director David Seltz, discussing the four-year grant program with a commission committee on Wednesday. "What are the specific types of projects that we want to incentivize?"

With the grants, one commission official said the agency could be looking to fund opportunities for "synergy" or "gap filling," infrastructure investments or "shifts in the way health care is delivered."

The commission released a preliminary list of 30 hospitals eligible for the grant program, though the requirements for grants will be further refined. Committee members also raised the possibility of seeking legislation to change the statutory eligibility requirements, which were whether the potential recipients are teaching hospitals, for-profit and whether the potential recipient hospitals' prices are above average.

"I would have included their payer mix, including their Medicaid proportion," said HPC Chairman Stuart Altman. "It is an interesting mix, and I don't have any particular hobby horse here, any particular hospital that I think should be included."

The initial request for responses is scheduled to go out in October and the commission plans to notify grant recipients in November.


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Seltz, a former top aide to Senate President Therese Murray who helped draft the 2012 health-care law, left open the possibility that the commission might seek a change in law. The 2012 law created the HPC and the one-time $120 million assessment on certain hospitals.

"It may be that a statutory change may be necessary," Seltz said. "We would cross that bridge when we come to it."

Last year's cost containment law laid out a new payment platform centered on more coordinated care and its supporters predicted it would shave $200 billion off the estimated cost of health care statewide over the next 15 years, money lawmakers hope will be plowed back into the economy.

The law authorized a one-time $60 million surcharge on hospitals or hospital networks with more than $1 billion in net assets, which receive less than 50 percent of revenues from public payers.

Brigham & Women's, Newton Wellesley and Faulkner, all from the Partners HealthCare group, and Massachusetts General Hospital all qualified for the surcharge. Children's Hospital, Beth Israel Deaconess, Mount Auburn, New England Baptist and Martha's Vineyard Hospital qualified for the surcharge and were granted a 50 percent discount, reducing the total surcharge by $9.2 million.

HPC Director of Quality Integration Iyah Romm said the commission can hone the list of potential grant recipients by defining what it wants, though the commission is still reviewing what steps it might be able to take to add hospitals that did not qualify.

The HPC has also undergone a "rebranding," according to Romm, dropping the term "distressed hospital fund," in favor of Community Hospital Acceleration, Revitalization, and Transformation, or CHART grants.

Area hospitals listed as eligible as of July 10: Emerson Hospital, HealthAlliance Leominster Hospital, Lawrence General Hospital, Lawrence Memorial Hospital, Lowell General Hospital, Marlborough Hospital, Melrose Wakefield Hospital, Saints Medical Center and Winchester Hospital.