MASSACHUSETTS MAY ELIMINATE HEALTH BILL SURCHARGE WAIVER

BOSTON-Massachusetts may eliminate an exemption that now allows "infrequent payers" to escape-by paying a small fee-a state law that imposes a surcharge on all hospital bills.

Since Jan. 1, third-party claims administrators, insurers, health maintenance organizations, preferred provider organizations and employers nationwide that administer their own health care plans have been liable for a surcharge-currently 5.06%-on payments made to Massachusetts acute care hospitals and ambulatory centers.

However, health care payers whose Massachusetts hospital bills were less than $300,000 in 1996-such as TPAs outside Massachusetts, for example-were able to escape the surcharge if they registered with the state's Division of Health Care Finance and Policy as an infrequent payer by Jan. 15 and paid a $2,400 fee.

If in any calendar year an infrequent payer makes at least $300,000 in payments to Massachusetts hospitals, though, it would be liable for the surcharge in the next year.

State health care officials now are proposing, though, to eliminate-due to low demand-the infrequent payer exception. Only 250 payers applied for infrequent payer status.

"We thought there would be greater demand," said a spokeswoman for the Division of Health Care Finance and Policy, adding that making all payers liable for the surcharge would be more equitable.

The proposal to eliminate the infrequent payer exemption will be the subject of a public hearing Aug. 25.

Eliminating the infrequent-payer exemption would primarily affect out-of-state TPAs with a small number of covered lives in Massachusetts and self-administered employers with small number of employees in the state.

A spokeswoman for the Associated Industries of Massachusetts in Boston, a business trade group, said it would not oppose the elimination of the surcharge exemption.

The surcharge is intended to fund a $100 million pool used to reimburse hospitals for uncompensated care provided to the uninsured.