Massachusetts Nurses Turn in Petitions for Hospital CEO Pay Cap, Penalties

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The Massachusetts Nurses Association is moving forward with its bid to require more financial disclosure from hospitals in the state and a cap on executive pay, according to a Boston Globe report.
Last week, MNA officials delivered a petition to the office of Massachusetts Secretary of State William Galvin. The petition included signatures from more than 100,000 voters calling for a new state law that would require more transparency around hospital finances.  

Provisions in that proposed law include a requirement for hospitals to disclose all funds in offshore accounts and a cap on hospital CEO salaries at 100 times that of their lowest-paid workers.

Also, if a hospital posts an annual operating margin (including amortization and depreciation) that exceeds 8 percent, it will be subject to a civil penalty under the law equal to the amount the operating margin exceeds 8 percent. This would apply to all hospitals that accept Medicaid funds from Massachusetts and have a payer mix of less than 60 percent government payers.

The penalties from excessive CEO compensation and hospital profits would then go into a state-created Medicaid reimbursement enhancement fund, which would distribute extra reimbursement to hospitals that treat higher proportions of Medicaid patients.

A second petition submitted to Secretary Galvin's office last week would create a law setting strict limits on the number of hospital patients assigned to each nurse, according to the report.

David Schildmeier, a spokesperson for MNA, said the union is trying to ensure people know "how much money some of these hospitals really have and make sure they're using the money to provide health services rather than build up big corporate networks, hoard their profits, and pay their CEOs a lot of money," according to the report.

If lawmakers do not pass the laws by May, or if they modify the measures to an extent deemed inadequate by the union, the MNA plans to collect 11,000 more signatures. That's the number needed to put the proposals before voters as ballot questions next November, according to the report.

The Massachusetts Hospital Association has said its members should be held accountable, but already report extensive financial and clinical data to state and federal regulators.

MHA President and CEO Lynn Nicholas also said capping CEO pay could prove detrimental in the long run. "It's really naive to think patients would be well-served in the long run by placing mandated limits on market-based compensation for hospital CEOs," Ms. Nicholas told the Boston Globe. "It would erode the capable leadership we have at the Commonwealth's hospitals."

More Articles on Hospital Transparency:

Opening Up: How Pricing Transparency Will Change Hospital Benchmarking
In Need Of A New Hip? Pricing Transparency Would Benefit All Americans
Price Transparency: Why It's an Issue & Where Hospitals Fit in

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