HEI: How Covid-Era Financial Engineering Created a $21B Racial Wealth Transfer
ESG-like Incentives Ration Care to ‘Reduce Disparities’
An Effort Investigation uncovered a $21B network of race-based wealth transfers in healthcare across 35 States. These transfers, known collectively as Health Equity Incentives (HEI), pay additional money to providers which increase the share of healthcare they provide to Black and Hispanic people and implicitly, decrease the share to White and Asian people.
HEI tells an expansive political story, in which activists built up the framework behind these racial wealth transfers over a decade, then enacted with blazing speed from 2020-2021 during the combination of Black Lives Matter movement and Covid-19.
The clearest example comes from Massachussetts. Their five HEI programs target the financial infrastructure of Medicaid, Medicare, and MassHealth, their State health system. They are deliberately modelled after quality incentives, which redistribute money between providers based on patient outcomes.
Instead of measuring objective improvement, HEI focuses on racial disparities — meaning that providers score better by redirecting services to ‘underperforming’ races, including by worsening outcomes for other races. Better scores mean more payments, which means that providers earn more by shifting care from White and Asian people to Black and Hispanic people.
The anti-white and anti-asian racism of the Black Lives Matter era were not spontaneous. Health Equity Incentives (HEI) is an instructive example. These discriminatory transfers of Medicaid and Medicare dollars was a dedicated policy area planned, incentivized, and financed by federal and state governments for a decade, until its massive expansion to $21B from 2020-2021.
Despite Black Lives Matter losing popularity with the public1, racial wealth transfers continue to expand. Several of the largest wealth transfers programs have only been fully implemented during 2025–2026.
Massachusetts
The Massachusetts Quality Equity Incentive Program (MQEIP) is clearest example of how NGOs and the Obama administration engineered HEI transfers decades ahead of BLM.
Since at least January 2007, MassHealth collected racial data. Race-based transfers began in the 2008–2009 budget, which authorized up to $20 million for FY 2008 and $58 million for FY 2009. In 2017, UCLA published “A Roadmap for Promoting Health Equity and Eliminating Disparities”, a report funded by the HHS2: that became the common root for HEI.
Everything changed in 2020. This groundwork exploded into a massive ecosystem of HEI advocates, committees, and transfers. From October 2020 through May 2021, MassHealth held five listening sessions and 20 procured workgroup meetings with 100 organizations.3
In 2021, HHS commissioned a report from the RAND Corporation titled “Developing Health Equity Measures”, which recommended these programs for the entire country. Hundreds of paid HEI activists, often federally funded, came into Massachusetts, coalescing around the 26-member COVID-19 Health Equity Advisory Group.3
The July 2021 draft proposed $500M over five years for the initial HEI program. The December request raised that amount to $1.75B. Combined with a separate Cambridge Health Alliance payment, the HEI budget totalled $2.2 billion. The State of Massachusetts announced the program, citing both the RAND report and the UCLA roadmap. CMS approved this combined program in September 2022.
California
In California, the HEI ecosystem is larger and harder to track. Unlike Massachusetts, California frequently mixes racial wealth transfers into other incentive programs, obfuscating how much money is redistributed based on race, compared to other factors. However, California State officials frequently stated that they consider race to be the most important factor.
“You cannot do quality without equity,” said DHCS Chief Health Equity Officer Pamela Riley. She elaborated in California’s Health Equity Roadmap: “Racism and inequity have been systemic in our nation since its inception … efforts to eliminate health disparities must also include a fundamental shift in how we structure power, decision-making, and community engagement.”
California Department of Health Care Services’ reporting code lists “Q-IHE1 Improving Health Equity — Priority,” alongside multiple additional “Q-IHE2 Improving Health Equity — Elective” classifications.7
Despite a majority of HEI programs being purely race-based like in Massachusetts, mixed HEI programs outweigh pure HEI on spending due to California alone. Based on California’s policy statements, these budgets aim to produce the same outcomes as pure HEI transfers.
Despite political opinion turning on Black Lives Matter1, the HEI industry has not receded. HEI has higher budgets than ever before.4 Based on most recent reporting, they are active in 35 States and Washington, DC.
In addition to HHS, HEI policies were supported by a vast network of lobbyists and NGOs. Fourteen registrants disclosed lobbying on HEI-related federal policies, spending $29,552,416 in overall lobbying expenses.
HEI programs continue to operate in many Republican-controlled States, including Alabama, Arkansas, Louisiana, Mississippi, North Dakota, Ohio, Oklahoma, South Carolina, and West Virginia, according to the most recent administrative records. If the DOJ Civil Rights Division initiates a review, these States would likely be the first to settle.
Footnotes
1 Pew Research Center’s 2023 trend report, Pew’s 2025 follow-up, YouGov’s 2021 survey, and AP-NORC’s 2020 survey. ↩
2 “This report is funded by the Department of Health and Human Services under contract HHSM-500-2012-00009I, Task Order HHSM-500-T0024.”, according to the report itself. ↩
3 MassHealth’s Section 1115 demonstration extension request documents five listening sessions and 20 workgroup meetings involving approximately 100 organizations. DPH Commissioner Monica Bharel chaired the 26-member COVID-19 Health Equity Advisory Group.
| Amy Rosenthal | Health Care for All (HCFA) | $1,430,5982007-10-01–2026-08-19 | |
|---|---|---|---|
| Anne Parker | Advocates | Unresolved | |
| Ashley Hague | Tufts Health Public Plans | Unresolved | |
| Carol Kress | Massachusetts Behavioral Health Partnership | Unresolved | |
| Carole Allen | Massachusetts Medical Society | $3,539,3732007-10-01–2026-08-19 | |
| Cindy Colby | Signature Healthcare Corporation | $2,226,3162007-10-01–2026-08-19 | |
| Daniel Joo | Community Care Cooperative | $939,6272007-10-01–2026-08-19 | |
| Daniel McHale | Massachusetts Health & Hospital Association | Unresolved | |
| Danna Mauch | Massachusetts Association for Mental Health | $199,6952007-10-01–2026-08-19 | |
| David Elvin | Cambridge Health Alliance | $61,562,5652007-10-01–2026-08-19 | |
| Deborah Wilson | Lawrence General Hospital | $3,975,0002007-10-01–2026-08-19 | |
| Denise De Las Nueces | Boston Health Care for the Homeless Program | $87,563,3992007-10-01–2026-08-19 | |
| Dennis Heaphy | N/A | Unresolved | |
| James M. Perrin | Massachusetts Child and Adolescent Health Initiative; Massachusetts Chapter of the American Academy of Pediatrics Medicaid ACO Task Force | Unresolved | |
| Janis Liepins | Fallon Health | Unresolved | |
| John Kovalchik | Holyoke Medical Center | $1,824,3182007-10-01–2026-08-19 | |
| Kaitlin McColgan | Massachusetts League of Community Health Centers | $78,443,7962007-10-01–2026-08-19 | |
| Kaitlyn Walsh | Blue Cross Blue Shield of Massachusetts Foundation | Unresolved | |
| Kathleen Jordan | Seven Hills Foundation | $15,290,3142007-10-01–2026-08-19 | |
| Kevin Medeiros | Community Counseling of Bristol County Inc | Unresolved | |
| Kris Bloch | Steward | Unresolved | |
| Lindsay Jubelt | Mass General Brigham | Unresolved | |
| Lydia Conley | Association for Behavioral Healthcare | Unresolved | |
| Maddie Ribble | Massachusetts Public Health Association | $129,5382007-10-01–2026-08-19 | |
| Manuel Lopes | East Boston Neighborhood Health Center | $146,772,7582007-10-01–2026-08-19 | |
| Melissa Shannon | Boston Medical Center (BMC) | $804,591,2742007-10-01–2026-08-19 | |
| Michael A. Lee | Boston Children’s Hospital | Unresolved | |
| Michael Nickey | Wellforce | Unresolved | |
| Raymond McCarthy | Baystate Health | Unresolved | |
| Sandra Cotterell | Codman Square Health Center | $57,161,8582007-10-01–2026-08-19 | |
| Satya R. Montgomery | Riverside Community Care, Inc | $23,330,5022007-10-01–2026-08-19 | |
| Sophie Santaella Jones | Vinfen Corporation | $10,057,2942007-10-01–2026-08-19 | |
| Steven Winn | Behavioral Health Network | $29,225,2192007-10-01–2026-08-19 | |
| Tamara Lundi | Community Healthlink | $38,466,0792007-10-01–2026-08-19 | |
| Victoria Pulos | Massachusetts Law Reform Institute | $324,4872007-10-01–2026-08-19 | |
| Adela Amador | East Boston Neighborhood Health Center | $146,772,7582007-10-01–2026-08-19 | |
| Alex Forster | Massachusetts Behavioral Health Partnership | Unresolved | |
| Alex Sheff | Health Care for All (HCFA) | $1,430,5982007-10-01–2026-08-19 | |
| Barry Bock | Boston Health Care for the Homeless Program | $87,563,3992007-10-01–2026-08-19 | |
| Bianca Belcher | Steward | Unresolved | |
| Celeste Clerk | Wild Ivy Social Justice Network, Western Massachusetts Recovery Learning Community | Unresolved | |
| Daniel Quinn | Innovative Care Partners, LLC | Unresolved | |
| Daniel Slater | Atrius Health | $985,0642007-10-01–2026-08-19 | |
| David Matteodo | Massachusetts Association of Behavioral Health Systems | Unresolved | |
| Evelin Velez | MVACO- My Care Family ACO | Unresolved | |
| Jennifer Obadia | Project Bread | $495,8482007-10-01–2026-08-19 | |
| Jessica DeFlumer-Trapp | Behavioral Health Network | $29,225,2192007-10-01–2026-08-19 | |
| Jill Lack | Beth Israel Lahey Health | Unresolved | |
| Joseph Finn | Massachusetts Housing and Shelter Alliance (MHSA) | Unresolved | |
| Julie Battisti | CCP/LTSS Care Partners | Unresolved | |
| Kate Gannon | MLPB - Medical Legal Partnership Boston | Unresolved | |
| Kathleen Jordan | Seven Hills Foundation | $15,290,3142007-10-01–2026-08-19 | |
| Kristi Glenn | N/A | Unresolved | |
| Larry Seamans | Family Aid Boston | Unresolved | |
| Laura Black | Commonwealth Care Alliance | Unresolved | |
| Linda Weinreb | Fallon Health | Unresolved | |
| Lisa Gurgone | Mass Home Care | Unresolved | |
| Lisa Lambert | Parent/Professional Advocacy League (PPAL) | Unresolved | |
| Lois Nesci | Gándara Mental Health Center | $19,827,9582007-10-01–2026-08-19 | |
| Luis Ticona | Reliant Medical Group | Unresolved | |
| Lydie Ultimo- Prophil | Bay Cove Human Services | $17,023,0122007-10-01–2026-08-19 | |
| Margery Gann | Ethos (Boston Allied Partners) | Unresolved | |
| Megan Thompson | Association for Behavioral Healthcare (ABH) | Unresolved | |
| Melanie Reis- Baga | Coordinated Care Network BH CP (High Point Treatment Center) | Unresolved | |
| Nancy Bishop | CCP Central Community Health Partnership- Open Sky Community Services | Unresolved | |
| Noreen Melanson | Eliot Community Human Services, Inc. | $4,000,0002007-10-01–2026-08-19 | |
| Patricia Kelleher | Home Care Alliance of MA | $149,1472007-10-01–2026-08-19 | |
| Patricia Nemia | Federation for Children with Special Needs | $20,257,4262007-10-01–2026-08-19 | |
| Roseann Martoccia | Care Alliance of Western MA | Unresolved | |
| Scune Carrington | Massachusetts League of Community Health Centers | $78,443,7962007-10-01–2026-08-19 | |
| Sherry Ellis | Spectrum Health Systems | $1,324,0402007-10-01–2026-08-19 | |
| Tara Stuart | Community Counseling of Bristol County (CCBC) | Unresolved | |
| Thea James | Boston Medical Center (BMC) | $804,591,2742007-10-01–2026-08-19 | |
| Charles J. Homer | N/A | Unresolved | |
| Charles Jones | Harbor Health Services, Inc | $121,614,2032007-10-01–2026-08-19 | |
| Claudine Swartz | Beacon Health Options | Unresolved | |
| Elena Freydin | Lynn Community Health Center | Unresolved | |
| Elizabeth Browne | Charles River Community Health | $73,266,9172007-10-01–2026-08-19 | |
| Elizabeth Smith | Southcoast Physician Group | Unresolved | |
| James Uberti | Mercy Health ACO/ Southern New England Healthcare Organization | Unresolved | |
| Jessica Rubinstein | Tufts Health Plan | Unresolved | |
| Jessie Gaeta | Boston Health Care for the Homeless Program | $87,563,3992007-10-01–2026-08-19 | |
| Katherine Howitt | Blue Cross Blue Shield of Massachusetts Foundation | Unresolved | |
| Lisa M. Jones | Greater New Bedford Community Health Center | $81,835,5932007-10-01–2026-08-19 | |
| Liz Sanchez | Massachusetts League of Community Health Centers | $78,443,7962007-10-01–2026-08-19 | |
| Lora Council | Cambridge Health Alliance | $61,562,5652007-10-01–2026-08-19 | |
| Maria Coppenrath | Greater Lawrence Family Health Center | $118,074,0872007-10-01–2026-08-19 | |
| Mark Mandell | Steward Health Care Network | Unresolved | |
| Mehreen Butt | Planned Parenthood League of Massachusetts | $10,239,8892007-10-01–2026-08-19 | |
| Michael Olsen | Boston Accountable Care Organization (BACO) | Unresolved | |
| Nancy Norman | Massachusetts Behavioral Health Partnership (MBHP) | Unresolved | |
| Parnika P Saxena | Mass Psychiatric Society | Unresolved | |
| Peggy Chou | Atrius Health | $985,0642007-10-01–2026-08-19 | |
| Richard Gitomer | Brigham Health | Unresolved | |
| Robert Slocum | North Shore Community Health Centers | $1,982,9302007-10-01–2026-08-19 | |
| Robyn Risenberg | Boston Community Pediatrics | Unresolved | |
| Samuel S. Nordberg | Reliant Medical Group | Unresolved | |
| Susan Joss | Brockton Neighborhood Health Center | $104,348,4612007-10-01–2026-08-19 | |
| Susan L Kaufman | Community Care Cooperative, Inc. | $939,6272007-10-01–2026-08-19 | |
| Suzanne Curry | Health Care for All | $1,430,5982007-10-01–2026-08-19 | |
| Swati Bahrani | Boston Children's Hospital + PPO | Unresolved | |
| Umar Farooq | Commonwealth Care Alliance | Unresolved | |
| Wayne Altman | MA Primary Care Alliance for Patients (MAPCAP) | Unresolved | |
| Yaminette Diaz-Linhart | N/A | Unresolved |
4 See the companion program start-year and budget ledger, pure/mixed criteria classification, annual allocation series, and cumulative budgets-passed series. ↩
5 The two spending charts, spending-by-state map, and interactive state-program map use the same 51-program source inventory through purpose-built derivative ledgers. Program inventory · planned-spending series · approved-budget series · state funding summary · state-program ledger · ↩ ↩ ↩ ↩
| Entity | Total across all issues | Filings |
|---|---|---|
| Blue Cross Blue Shield Association | $12,890,000 | |
| Health Care Service Corporation (HCSC) | $4,970,000 | |
| Cambia Health Solutions | $3,790,000 | |
| Blue Cross Blue Shield of Michigan | $2,146,416 | |
| Highmark Inc. | $1,920,000 | |
| Florida Blue (Blue Cross and Blue Shield of Florida, Inc.) | $1,280,000 | |
| BlueCross BlueShield of Tennessee | $1,200,000 | |
| Corewell Health | $550,000 | |
| Massachusetts Medical Society | $360,000 | |
| Blue Cross and Blue Shield of Minnesota (BCBSM, Inc.) | $176,000 | |
| Tiber Creek Group (for HealthPartners) | $150,000 | |
| Summa Health | $60,000 | |
| Blue Cross and Blue Shield of Kansas | $50,000 | |
| GuideWell Mutual Holding Corporation | $10,000 |
7 Despite being listed as “Elective,” these metrics also affect funding.