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John Kerry's $3.5 billion Obamacare 'boondoggle' faces repeal

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Politics,Paul Bedard,Washington Secrets,Obamacare,John Kerry,Health Care

An Obamacare earmark championed by former Sen. John Kerry that raised wage payments to Massachusetts hospitals at the expense of those in the other 49 states is coming under fire in Congress and could die now that the 29-year Senate veteran is gone.

Dubbed the "Bay State Boondoggle" by critics, Kerry's simple amendment to Obamacare allowed Massachusetts hospitals to increase their health care Medicaid and Medicare payments by $257 million last year and $3.5 billion over 10 years. Under federal rules, the money would have to come out of payments to other hospitals around the country.

The Senate has voted to repeal the measure, and the House Ways and Means Committee has just introduced legislation to follow suit.

At issue is a 2011 move by Kerry to recategorize the status of tiny, 15-bed Nantucket Cottage Hospital on Nantucket Island, where Kerry and many affluent Bay Staters and Washingtonians vacation. By having it categorized as a "rural hospital," it became the floor for what Medicare pays in wage reimbursements.

Rural hospitals typically have the lowest pay in a state, but Nantucket Cottage Hospital, because of its island location, pays its employees a lot, so the change had the effect of raising reimbursements for all Massachusetts hospitals.

Because the repeal legislation is backed by Ways and Means Committee Republicans, it's very likely to pass in the House. In the Senate, where the repeal language was added to the fiscal 2014 budget, it's likely to survive because the initial Kerry earmark has fallen out of favor now that he is no longer there to defend it.

"The only difference now is that there's not a 29-year veteran of the Senate there fighting to keep it," said one Senate watcher.

"If someone presented a real threat to Massachusetts priorities and industries they knew for certain they'd get a call or a good arm-twisting the next time they went to the floor," said the insider, who added, "What's left in the Senate after his departure is a 'Boston blackout' in terms of political clout -- the first time in 30 years you didn't have Kerry's presence to safeguard Massachusetts."