By Michael Norton

State House News Service

BOSTON -- A federal waiver critical to the efforts in Massachusetts to pursue universal health-care coverage, rein in cost increases and deploy payment delivery reform is hung up in secret talks between outgoing Gov. Deval Patrick's administration and the Obama administration.

In late 2011, when Patrick announced the current $26.7 billion, three-year waiver, he said more than 98 percent of Massachusetts residents were insured and predicted the waiver would help the state tame health-care cost growth. Now, as his time in office winds down and with the state's Medicaid rolls growing, negotiating details of a new waiver represents one of his biggest remaining responsibilities.

The Patrick administration last September applied for a five-year extension of the waiver, calling it "the centerpiece of the state's health-care reform," but talks over conditions of the waiver have extended beyond the scheduled waiver start date of July 1 and will continue into September, the News Service learned on Friday.

"Of all the fiscal risks facing the state in the near future, the outcome of these negotiations is far and away number one," Michael Widmer, president of the Massachusetts Taxpayers Foundation, said this week. "There is a huge amount at stake in getting the maximum possible federal funding. I mean, the state's Medicaid costs are soaring so it's absolutely critical that we get as much federal support as possible."

Federal officials have agreed to two monthly extensions of the current waiver and on Friday, a Patrick administration official said another extension, through Sept. 12, has been received. "We are now doing shorter extensions as we move closer to finalizing the waiver agreement," said Health and Human Services spokeswoman Julie Kaviar.

Administration officials will not discuss negotiations, but people familiar with the underlying issues believe points of conflict could be funding levels for so-called safety net hospitals in Massachusetts, cost sharing for problems that have arisen during the rollout of the Affordable Care Act, as well as the length of the new waiver.

The waiver -- known as the Massachusetts Section 1115 Demonstration Project -- dates back to 1997. It provides a base of support to the extensive and expensive efforts within state government to pursue universal insurance access under a 2006 state law, enact cost containment and new payment models authorized in a 2012 state law, and implement elements of the federal Affordable Care Act.

Josh Archambault, senior fellow at the Pioneer Institute for Public Policy, said that since Gov. Mitt Romney signed the state's universal health-care law in 2006 "negotiations with the federal government have seemed to take longer and longer" on waiver renewals and updates.

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Health-care waiver talks dragging on