Massachusetts nurses back legislation capping hospital CEO pay, operating margins

The Massachusetts Nurses Association endorsed a proposal Tuesday that would cap the pay of hospital CEOs and redirect hospital operating margins over 8 percent to a health safety net plan, according to the Lowell Sun.

The group testified before the state Senate's Healthcare Financing Committee regarding the Hospital Profit Transparency and Fairness Act (S656/H602).

The legislation would redirect hospitals' excess operating margins — those over 8 percent — into a Medicaid Reimbursement Enhancement Fund to help Medicaid patients cover their medical bills. This applies to hospitals that accept funds from the state and have a less than 60 percent governmental insurer payer mix.

As part of the bill, hospitals that accept state funds and pay CEOs more than 100 times the lowest full-time employee salary in the organization would suffer a civil penalty equal to the excess payment.

The Massachusetts Health and Hospital Association did not endorse the legislation, and told the committee that operating margins alone do not tell the full story of a hospital's financial well-being.

The legislation applies to the teaching hospital of the University of Massachusetts medical school, licensed private or state-owned and state-operated general acute care hospitals, acute psychiatric hospitals, acute care specialty hospitals or any acute care unit within a state operated healthcare facility. oes not apply to rehabilitation facilities or long-term care facilities.

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