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Pictures of Money / Flickr Creative Commons

The so-called "Bay State boondoggle" is back. The hospital payment policy, based on a provision then-Sen. John Kerry slipped into Obamacare, makes Massachusetts hospitals look bad. And it's sure to create more in-fighting among hospitals — especially since it has continued to create a chain reaction that affected hospital payments around the country.

Here's a quick refresher of what that "boondoggle" is:

  • Medicare pays hospitals for their services and adjusts those payments every year based on local labor costs and wages. Federal law requires urban hospitals in a given state to be paid at least what rural hospitals receive.
  • When Congress passed the Affordable Care Act, Kerry inserted a provision that said the rural wage index must be budget-neutral nationally. It basically introduced winners (especially for those in Kerry's home state) and losers.
  • Nantucket Cottage Hospital is considered to be the only rural hospital in Massachusetts, and therefore sets the state's floor. But there's a catch: Nantucket is hardly "rural" in the traditional sense. The tiny hospital sits on a high-cost island inhabited by a lot of wealthy people. All the Massachusetts hospitals are therefore paid the much higher Nantucket rates at the expense of other hospitals across the country.

The latest: A new report from the Health and Human Services Office of Inspector General says that because Nantucket Cottage Hospital miscalculated wages and costs in 2015, it led to Medicare overpaying all other Massachusetts hospitals by $133.6 million. That's a big problem. In OIG's words: "The overpayments to Massachusetts hospitals caused underpayments to hospitals in other states." Other state hospital associations have been livid over the payment manipulation, with some comparing it to a "bank robbery."

Partners HealthCare, the Boston-based behemoth health system that owns Nantucket, didn't agree with the inspector general's office and actually asked the agency to "delete any estimates of the impact of its findings on any other hospital, be it in Massachusetts or elsewhere in the country." If Obamacare is repealed, this provision is one that won't be missed by most hospitals.

Go deeper

43 mins ago - Technology

Scoop: Facebook exec warns of "more bad headlines"

Illustration: Annelise Capossela/Axios

In a post to staffers Saturday obtained by Axios, Facebook VP of global affairs Nick Clegg warned the company that worse coverage could be on the way: “We need to steel ourselves for more bad headlines in the coming days, I’m afraid.”

Catch up quick: Roughly two dozen news outlets had agreed to hold stories based on leaked materials from Facebook whistleblower Frances Haugen for Monday publication — but the embargo fell apart Friday night as participating newsrooms posted a batch of articles ahead of the weekend.

"Atmospheric river" to whiplash Northern California from drought to flood

A map depicting 24-hour preciptation forecast (inches) ending Monday at 5a.m. local time. Photo: NOAA

A series of powerful "atmospheric river" storms are set dump historic amounts of rainfall across parts of drought-stricken California and the Pacific Northwest from this weekend, forecasters warn.

Why it matters: A strong atmospheric river, packing large amounts of moisture, is predicted to whiplash Northern California from drought to flood.

Inside Biden's Taiwan flubs

Illustration: Aïda Amer/Axios

Twice this year, President Biden has blurted out commitments that the U.S. is prepared to defend Taiwan against a Chinese invasion — forcing the White House to walk back his statements and leading to confusion over a high-stakes national security policy.

Why it matters: U.S. defense officials have publicly aired their concerns that China will take Taiwan by force in the next four to six years, perhaps sooner. The president's position on this question may soon have real-world, life and death consequences.