We have important information regarding Massachusetts payor surcharges and the MA Managed Care Organization Payor Assessment Notice.
The Commonwealth of Massachusetts, in accordance with statutory changes that were included in its fiscal year 2025 budget, terminated the Health Safety Net surcharge program for payments to acute hospitals and ambulatory surgical centers on January 1, 2025. In its place, the Commonwealth created, after receiving approval from the Centers of Medicare and Medicaid Services (CMS) on February 26th, 2025, a consolidated payor assessment: MA Managed Care Organization Payor Assessment.
Background
Since October, 2007, the Commonwealth of MA has assessed a 1.25% fee for uncompensated care, through the Health Safety Net program, provided by acute hospitals and ambulatory surgical centers within its borders. This fee was assessed on payors (fully insured carriers and self-insured plans administered by a carrier or TPAs) as claims are paid. Historically, Diversified Group has managed this surcharge for clients by processing the surcharge payment at the time a medical claim is processed for payment.
MA Changes Surcharge Parameters
In February, 2025, the Commonwealth received approval from CMS to change its uncompensated care allocation method. The change terminates the Health Safety Net Program in favor of a broader, more robust assessment under the Management Care Organization Payor Assessment. The new assessment percentage is lower, 1.18%, however, it is now applied to a broader range of services. In this new environs, all tier 1 Medicaid services are subject to the surcharge. Acute hospital and ambulatory surgical centers are still included but additional assessments will also apply to payments made for professional services, behavioral health services, pharmacy and other services when these services are rendered in a MA facility or from a MA provider, regardless of the situs location of the group. The surcharge is based on members receiving care in the Commonwealth.
Diversified Response
Diversified Group will continue to manage, collect and remit the MA surcharge on a monthly basis as required by law retroactive to January 1st. The first retroactive assessment payment to the Commonwealth is due by March 31, 2025. After that, assessments are due the first business day after the month following the month assessed. For example, the March 1, 2025 assessment is due on April 1, 2025, which falls on a Friday. Any assessments due for January, February and March will be added to your monthly billing statement for May 2025 which is sent on April 10th. Thereafter, each month’s assessment will be added to the following month’s statement. Surcharges on utilization at acute hospitals and ambulatory surgical centers will continue to be processed and paid as part of the claim. This notice is to make you aware of the new line item: “Managed Care Organization Payor Assessment” on your statement.
Stop-Loss Coverage
Stop-loss contracts generally do not cover State assessments, taxes and surcharges. Many carriers have made an exception for the Massachusetts uncompensated care surcharge / assessment payable under the old Health Safety Net, and we expect most carriers will continue to cover the new assessment to the extent the assessments payments being filed are limited to acute care hospitals and ambulatory surgical facilities. If we find out differently, we will keep you informed of any changes or additional information.
We consider compliance around this new assessment to be somewhat fluid given the short time period given to comply and lack of guidance. As more information and guidance is made available, we’ll keep you informed of any new developments.
If you have questions, please contact Dave Follansbee (email: dfollansbee@diversifiedgb.com) or Amber Defond (email: adefond@diversifiedgb.com) in our Compliance Department.
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