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Hopes fade on reforms in healthcare

Travaglini shifts to lesser Mass. plan

Hope for sweeping healthcare reform to extend coverage to all or most of the state's uninsured is all but dead, according to Senate President Robert E. Travaglini.

Travaglini will instead propose a stripped-down plan tomorrow designed to salvage millions in federal funding that Massachusetts is likely to lose if it does not pass some sort of healthcare plan by this week.

Legislators, healthcare advocates, and Governor Mitt Romney have been aiming to pass a landmark plan that would extend health insurance for the first time to all or nearly all Massachusetts residents. But those negotiations have collapsed, and Travaglini's shift is the most explicit acknowledgment of the breakdown.

Travaglini's staff is still drawing up details of the new plan, which is likely to be a far less ambitious measure and help far fewer people than initially hoped. In the meantime, he said, the House-Senate conference committee that had been trying to hammer out a comprehensive health bill will stop working.

Travaglini said Friday that, given the fading prospects for broad reform, legislative leaders, Romney, and everyone else involved in the debate must immediately devise a way to salvage $385 million in Medicaid funding that Massachusetts will lose if it doesn't pass a healthcare plan by Wednesday.

Travaglini said: ''If we have to apply our resources and our intellect on scaling down significantly the comprehensive package that is before us . . . I think that the governor, the Senate president, the speaker, and all those who have a vested interest in the healthcare system in the commonwealth should pool our resources quickly and come up with that proposal."

He hopes to present it to House Speaker Salvatore F. DiMasi tomorrow.

DiMasi said he is open to talking to Travaglini about a scaled-down plan, but believes more significant reform is needed. Romney communications director Eric Fehrnstrom said Romney was aware of the effort to work out a scaled-back plan and ''is willing to work with both the Senate president and the speaker to ensure that we continue to receive all our federal funding."

The atmosphere on Beacon Hill surrounding competing healthcare plans has grown increasingly volatile. A major sticking point has been DiMasi's insistence on an assessment on Massachusetts employers who do not provide health insurance to their employees. Travaglini and Romney oppose the idea.

Romney, whose presidential prospects may be enhanced by passage of sweeping reform, has been unable to push the process forward in the Legislature, despite personal appeals like recent unannounced visits to both legislative leaders' homes.

To continue receiving the $385 million in federal Medicaid money, the state needs to demonstrate progress in meeting two fairly broad new federal mandates: begin moving people off the costly free-care system many rely on for healthcare now and find a way to provide new affordable health coverage to the uninsured at no cost to the federal government. While federal health officials have not said explicitly which steps the state must take to satisfy those mandates, Travaglini and others are hoping that more modest steps by Massachusetts to extend coverage will be enough.

''We have to do whatever is necessary quickly to achieve that," Travaglini said. ''And everybody should realize that."

In a sign of how fractured the debate has become, DiMasi described an unusually tense one-on-one conversation he had with the governor last week. The House speaker said that Romney boasted of his close personal friendship with Mike Leavitt, the US health and human services secretary, who would have a final say over whether Massachusetts continues getting federal money. According to DiMasi, Romney told him that if the Legislature passes a healthcare plan that includes a payroll tax, he would not exert his influence with Leavitt to gain federal approval of the plan.

DiMasi said he was appalled.

''He was saying he would not use his influence to get something approved that he did not agree with," DiMasi said. ''It was an extraordinary statement. It was appalling to me that he would say something like that, because it would completely eliminate the legislative process and ignore what the Legislature had passed."

Fehrnstrom dismissed DiMasi's charges as ''uninformed speculation" and said Leavitt made clear on a recent visit that the federal government was not concerned with the specific mechanisms Massachusetts relied on to revamp its healthcare system.

House and Senate negotiators have been trying to work out an agreement since the fall, with constant prodding from Romney and the threat of losing the federal money hanging over them.

It wasn't until last week, though, that frustrations over the lack of progress really spilled out into the open, with DiMasi publicly accusing Senate leaders of dragging their feet, Romney blaming the delay on DiMasi's insistence on an employer assessment, and DiMasi in turn accusing Romney of being concerned chiefly about his own political future.

Romney contends that the state can extend health insurance to everyone by redirecting the more than $1 billion devoted to funding the free-care pool now.

Travaglini has advocated for a more modest, phased approach that would aim to insure fewer people.

Travaglini on Friday said the Legislature must get past the healthcare stalemate, so lawmakers can consider other important initiatives -- including next year's budget, which lawmakers are now diving into.

''There are a number of other significant pieces [of legislation] that are still pending that we should be addressing," he said. ''This would be a good indication that we still possess the capacity to move legislation through the process."

The Romney administration, meanwhile, as part of its effort to keep the pressure on, plans to send out letters tomorrow to dozens of hospitals around the state warning of cuts in annual federal funding they will face beginning July 1 if Massachusetts fails to pass a plan and forfeits the $385 million.

According to the state Executive Office of Health and Human Services, Boston Medical Center is set to lose more than $62 million, Baystate Medical Center in Springfield would lose more than $6 million, and Massachusetts General Hospital would lose more than $10 million.

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