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HOUSE DOCKET, NO. 1547 FILED ON: 1/18/2023
HOUSE . . . . . . . . . . . . . . . No. 1219
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
John J. Lawn, Jr.
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act enhancing the market review process.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :DATE ADDED:John J. Lawn, Jr.10th Middlesex1/17/2023Adam Scanlon14th Bristol1/24/2023Smitty Pignatelli3rd Berkshire1/31/2023Lindsay N. Sabadosa1st Hampshire2/2/2023Vanna Howard17th Middlesex2/2/2023Christine P. Barber34th Middlesex2/7/2023 1 of 14
HOUSE DOCKET, NO. 1547 FILED ON: 1/18/2023
HOUSE . . . . . . . . . . . . . . . No. 1219
By Representative Lawn of Watertown, a petition (accompanied by bill, House, No. 1219) of
John J. Lawn, Jr. and others for legislation to enhance the market review process. Health Care
Financing.
[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE HOUSE, NO. 4262 OF 2021-2022.]
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
An Act enhancing the market review process.
Whereas, The deferred operation of this act would tend to defeat its purpose, which is to
protect independent community hospitals from unfair competition, therefore it is hereby declared
to be an emergency law, necessary for the immediate preservation of the public health.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Section 16T of chapter 6A of the General Laws is hereby repealed.
2 SECTION 2. Section 13 of chapter 6D, as appearing in the 2020 Official Edition, is
3hereby amended by striking out subsection (a) and inserting in place thereof the following
4subsection:-
5 (a) Every provider or provider organization shall, before making any material change to
6its operations or governance structure, submit notice to the commission, the center and the
7attorney general of such change, not fewer than 60 days before the date of the proposed change. 2 of 14
8Material changes shall include, but not be limited to: (i) the submission of an application for
9issuance of a new freestanding ambulatory surgery center license or a clinic license, or a new
10satellite facility under an existing license; (ii) a corporate merger, acquisition or affiliation of a
11provider or provider organization and a carrier; (iii) mergers or acquisitions of hospitals or
12hospital systems; (iv) acquisition of insolvent provider organizations; and (v) mergers or
13acquisitions of provider organizations which will result in a provider organization having a near-
14majority of market share in a given service or region.
15 Within 30 days of receipt of a notice filed under the commission’s regulations, the
16commission shall conduct a preliminary review to determine whether the material change is
17likely to result in a significant impact on the commonwealth’s ability to meet the health care cost
18growth benchmark, established in section 9, or on the competitive market. If the commission
19finds that the material change is likely to have a significant impact on the commonwealth’s
20ability to meet the health care cost growth benchmark, or on the competitive market, the
21commission may conduct a cost and market impact review under this section.
22 SECTION 3. Subsection (d) of said section 13 of said chapter 6D, as so appearing, is
23hereby amended by striking out, in line 85, the words “and (xii)” and inserting in place thereof
24the following words:-
25 (xii) the inventory of health care resources maintained by the department of public health,
26pursuant to section 25A of chapter 111, and any related data or reports from the health planning
27council, as established by section 20; and (xiii).
28 SECTION 4. Said section 13 of said chapter 6D, as so appearing, is hereby further
29amended by striking out subsection (e) and inserting in place thereof the following subsection:- 3 of 14
30 (e) The commission shall make factual findings and issue a preliminary report on the cost
31and market impact review. In the report, the commission shall identify any provider or provider
32organization that meets all of the following criteria: (i) the provider or provider organization has,
33or likely will have, a dominant market share for the services it provides as a result of the
34proposed material change; (ii) the provider or provider organization charges, or likely will
35charge, prices for services that are materially higher than the median prices charged by all other
36providers for the same services in the same market, as a result of the proposed material change;
37and (iii) the provider or provider organization has, or likely will have, a health status adjusted
38total medical expense that is materially higher than the median total medical expense for all other
39providers for the same service in the same market, as a result of the proposed material change.
40 SECTION 5. Said section 13 of said chapter 6D, as so appearing, is hereby further
41amended by striking out subsections (g) and (h) and inserting in place thereof the following 2
42subsections:-
43 (g) Nothing in this section shall prohibit a proposed material change under subsection (a);
44provided, however, that any proposed material change shall not be completed: (i) until at least 30
45days after the commission has issued its final report; and (ii) if the attorney general brings an
46action as described in subsection (h), while such action is pending and prior to a final judgment
47being issued by a court of competent jurisdiction.
48 (h) A provider or provider organization that meets the criteria in subsection (e) shall be
49presumed to have engaged, or through a material change will engage, in an unfair method of
50competition or unfair and deceptive trade practice subject to an action brought by the attorney
51general pursuant to section 4 of chapter 93A; provided, however, a provider or provider 4 of 14
52organization that meets the criteria of subsection (e) shall not be subject to an action brought
53pursuant to sections 9 or 11 of said chapter 93A if the sole basis of the action is the fact that the
54provider meets the criteria in subsection (e). When the commission, under subsection (f), refers a
55report on a provider or provider organization to the attorney general, the attorney general may
56take action under said chapter 93A or any other law to protect consumers in the health care
57market. The commission’s final report may be evidence in any such action.
58 SECTION 6. Said section 13 of said chapter 6D is hereby further amended by adding the
59following subsection:-
60 (l) Upon issuance of its final report pursuant to subsection (f), the commission shall
61provide a copy of said final report to the department of public health, which shall be included in
62the written record and considered by the department of public health during its review of an
63application for determination of need.
64 SECTION 7. Said chapter 6D is hereby further amended by adding the following
65section:-
66 Section 22. (a) There is hereby established within the commission a health planning
67council, consisting of the executive director of the health policy commission who shall serve as
68chair, the secretary of health and human services or a designee, the commissioner of public
69health or a designee, the director of the office of Medicaid or a designee, the commissioner of
70mental health or a designee, the commissioner of insurance or a designee, the secretary of elder
71affairs or a designee, the executive director of the center for health information and analysis or a
72designee, and 3 members appointed by the governor, 1 of whom shall be a health economist, 1 of 5 of 14
73whom shall have experience in health policy and planning and 1 of whom shall have experience
74in health care market planning and service line analysis.
75 (b)(1) The council shall develop a state health plan to identify: (i) the anticipated needs of
76the commonwealth for health care services, providers, programs and facilities; (ii) the existing
77health care resources available to meet those needs; (iii) the projected resources necessary to
78meet those anticipated needs; and (iv) the priorities for addressing those needs.
79 (2) The state health plan developed by the council shall include the location, distribution
80and nature of all health care resources in the commonwealth and shall identify certain categories
81of health care resources, including: (i) acute care units; (ii) non-acute care units; (iii) specialty
82care units, including, but not limited to, burn, coronary care, cancer care, neonatal care, post-
83obstetric and post-operative recovery care, pulmonary care, renal dialysis and surgical, including
84trauma and intensive care units; (iv) skilled nursing facilities; (v) assisted living facilities; (vi)
85long-term care facilities; (vii) ambulatory surgical centers; (viii) office-based surgical centers;
86(ix) urgent care centers; (x) home health; (xi) adult and pediatric behavioral health and mental
87health services and supports; (xii) substance use disorder treatment and recovery services; (xiii)
88emergency care; (xiv) ambulatory care services; (xv) primary care resources; (xvi) pediatric care
89services; (xvii) pharmacy and pharmacological services; (xviii) family planning services; (xix)
90obstetrics and gynecology and maternal health services; (xx) allied health services including, but
91not limited to, optometric care, chiropractic services, oral health care and midwifery services;
92(xxi) federally qualified health centers and free clinics; (xxii) numbers of technologies or
93equipment defined as innovative services or new technologies by the department of public health
94pursuant to section 25C of chapter 111; (xxiii) hospice and palliative care service; and (xxiv)
95health screening and early intervention services. 6 of 14
96 (3) The state health plan shall also make recommendations for the appropriate supply and
97distribution of resources, programs, capacities, technologies and services identified in paragraph
98(2) on a state-wide or regional basis based on an assessment of need for the next 5 years and
99options for implementing such recommendations. The recommendations shall reflect, at a
100minimum, the following goals: (i) to maintain and improve the quality of health care services;
101(ii) to support the commonwealth’s efforts to meet the health care cost growth benchmark
102established pursuant to section 9; (iii) to support innovative health care delivery and alternative
103payment models as identified by the commission; (iv) to reduce unnecessary duplication; (v) to
104address disparities in the health care system based on the needs of particular demographic
105factors, including, but not limited to, race, ethnicity, immigration status, sexual orientation,
106gender identity, geographic location, age, language spoken, ability and socioeconomic status;
107(vi) to support efforts to integrate oral health, mental health, behavioral and substance use
108disorder treatment services with overall medical care; (vii) to reflect the latest trends in
109utilization and support the best standards of care; and (viii) to rationally and equitably distribute
110health care resources across geographic regions of the commonwealth based on the needs of the
111population on a statewide basis, as well as the needs of particular demographic factors,
112including, but not limited to, race, ethnicity, immigration status, sexual orientation, gender
113identity, geographic location, age, language spoken, ability and socioeconomic status.
114 (c) The council shall provide direction to the department of public health to establish and
115maintain on a current basis an inventory of all such health care resources together with all other
116reasonably pertinent information concerning such resources. Agencies of the commonwealth that
117license, register, regulate or otherwise collect cost, quality or other data concerning health care
118resources shall cooperate with the council and the department of public health in coordinating 7 of 14
119such data and information collected pursuant to this section and section 25A of chapter 111. The
120inventory compiled pursuant to this section and said section 25A of said chapter 111 and all
121related information shall be maintained in a form usable by the general public and shall
122constitute a public record; provided, however, that any item of information which is confidential
123or privileged in nature under any other law shall not be regarded as a public record pursuant to
124this section.
125 (d) The council shall establish an advisory committee of not more than 15 members who
126shall reflect a broad distribution of diverse perspectives on the health care system, including
127health care providers and provider organizations, public and private third-party payers, consumer
128representatives and labor organizations representing health care workers. Not fewer than 2
129members of the advisory committee shall have expertise in rural health matters and rural health
130needs in the commonwealth. The advisory committee shall review drafts and provide
131recommendations to the council during the development of the state health plan described in
132subsection (b).
133 (e) Annually, the council, in consultation with the commission and the department of
134public health, shall conduct at least 4 public hearings, in geographically diverse areas throughout
135the commonwealth, during the development of the state health plan and shall give interested
136persons an opportunity to submit their views orally and in writing. In addition, the commission
137may create and maintain a website to allow members of the public to submit comments
138electronically and review comments submitted by others. 8 of 14
139 (f) The council shall publish analyses, reports and interpretations of information collected
140pursuant to this section to promote awareness of the distribution and nature of health care
141resources in the commonwealth.
142 (g) The council shall file annually an interim report by July 1 and annually a final report
143by January 1 with the joint committee on health care financing concerning the activities of the
144council in general and, in particular, describing the progress to date in developing the state health
145plan and recommending such further legislative action as it considers appropriate.
146 SECTION 8. Section 11N of chapter 12 of the General Laws, as appearing in the 2020
147Official Edition, is hereby amended by striking out subsection (b) and inserting in place thereof
148the following new subsection:-
149 (b) The attorney general may, upon a referral by the health policy commission pursuant
150to section 13 of chapter 6D, investigate and bring any appropriate action, including for injunctive
151relief, as may be necessary pursuant to chapter 93A or any other law, to restrain unfair methods
152of competition or unfair and deceptive trade practices by a provider or provider organization.
153 SECTION 9. The first paragraph of section 25A of chapter 111 of the General Laws, as
154so appearing, is hereby amended by striking out the first sentence and inserting in place thereof
155the following sentence:- Under the direction of the health planning council established in section
15622 of chapter 6D, the department shall establish and maintain, on a current basis, an inventory of
157all health care resources together with all other reasonably pertinent information concerning such
158resources, in order to identify the location, distribution and nature of all such resources in the
159commonwealth. 9 of 14
160 SECTION 10. Said section 25A of said chapter 111, as so appearing, is hereby further
161amended by striking out, in lines 17 and 18, the words “in a designated office of the department”
162and inserting in place thereof the following words:- as determined by the health planning council
163established in section 22 of chapter 6D.
164 SECTION 11. Said section 25A of said chapter 111, as so appearing, is hereby further
165amended by striking out the fourth paragraph.
166 SECTION 12. Section 25C of said chapter 111, as so appearing, is hereby amended by
167striking out subsection (g) and inserting in place thereof the following subsection:-
168 (g) The department, in making any determination of need, shall be guided by the state
169health plan and the state health resources inventory established in section 20 of chapter 6D, and
170shall encourage appropriate allocation of private and public health care resources and the
171development of alternative or substitute methods of delivering health care services so that
172adequate health care services will be made reasonably available to every person within the
173commonwealth at the lowest reasonable aggregate cost. The department shall use data from the
174center for health information and analysis and information and the report on the cost and market
175impact review delivered by the health policy commission pursuant to subsection (l) of section 13
176of chapter 6D, and shall take into account any comments from any other state agency or entity,
177and may impose reasonable terms and conditions as the department determines are necessary to
178achieve the purposes and intent of this section. The department may also recognize the special
179needs and circumstances of projects that: (i) are essential to the conduct of research in basic
180biomedical or health care delivery areas or to the training of health care personnel; (ii) are
181unlikely to result in any increase in the clinical bed capacity or outpatient load capacity of the 10 of 14
182facility; and (iii) are unlikely to cause an increase in the total patient care charges of the facility
183to the public for health care services, supplies and accommodations, as such charges shall be
184defined from time to time in accordance with section 5 of chapter 409 of the acts of 1976.
185 SECTION 13. Said section 25C of said chapter 111, as so appearing, is hereby further
186amended by striking out subsection (i) and inserting in place thereof the following subsection:-
187 (i) Except in the case of an emergency situation determined by the department as
188requiring immediate action to prevent further damage to the public health or to a health care
189facility, the department shall not act upon an application for such determination unless: (i) the
190application has been on file with the department for at least 30 days; (ii) the center for health
191information and analysis, the health policy commission, the state and appropriate regional
192comprehensive health planning agencies and, in the case of long-term care facilities only, the
193department of elder affairs, or in the case of any facility providing inpatient services for the
194mentally ill or developmentally disabled, the departments of mental health or developmental
195services, respectively, have been provided copies of such application and supporting documents
196and given reasonable opportunity to supply required information and comment on such
197application; and (iii) a public hearing has been held on such application when requested by the
198applicant, the state or appropriate regional comprehensive health planning agency, any 10
199taxpayers of the commonwealth and any other party of record as defined in section 25C¼. If, in
200any filing period, an individual application is filed, which would implicitly decide any other
201application filed during such period, the department shall not act only upon an individual.
202 SECTION 14. Said chapter 111, as so appearing, is hereby further amended by inserting
203after section 25C, the following new section:- 11 of 14
204 Section 25C¼. (a) For the purposes of this section, the following words shall, unless the
205context clearly requires otherwise, have the following meanings:
206 “Independent community hospital”, any hospital that has been: (i) designated by the
207health policy commission as an independent community hospital for the year in which an
208application for a determination of need is filed; or (ii) qualified in the year 2021 as an eligible
209hospital as defined in subsection (d) of section 63 of chapter 260 of the acts of 2020.
210 “Party of record”, an applicant for a determination of need; the attorney general; the
211center for health information and analysis; the health policy commission; any government
212agency with relevant oversight or licensure authority over the proposed project or components
213therein; any 10 taxpayers of the commonwealth; or an independent community hospital whose
214primary service area overlaps with the primary service area of the applicant’s proposed project.
215A party of record may review an application for determination of need as well as provide written
216comment for consideration by the department.
217 “Primary service area”, the contiguous geographic area from which a health care facility
218draws 75 per cent of its commercial discharges, as measured by the zip codes closest to the
219facility by drive time, and for which the facility represents a minimum proportion of the total
220discharges in a zip code, as determined by the department in consultation with the health policy
221commission and based on the best available data using a methodology determined by the
222department in consultation with the health policy commission.
223 “Proposed project”, a project for the construction of a freestanding ambulatory surgery
224center for which a notice of determination of need is a prerequisite of licensure. 12 of 14
225 (b) For any application for a determination of need for which the primary service area of
226the proposed project overlaps with the primary service area of an existing independent
227community hospital, the applicant shall obtain and include in such application a letter of support
228from the independent community hospital’s chief executive officer and board chair; provided,
229however, that a proposed project that constitutes a joint venture between the applicant and the
230independent community hospital shall be exempt from this subsection. The department shall
231conduct a preliminary review of each application to determine compliance with this subsection.
232If the department determines that an application is not in compliance, the department shall
233identify to the applicant any independent community hospital whose support is required by this
234subsection, and dismiss said application without prejudice. If the department fails to conduct a
235preliminary review of an application or fails to dismiss an application that does not satisfy the
236requirements of this subsection, the independent community hospital whose primary service area
237overlaps with the primary service area of the proposed project may, within a reasonable period of
238time, bring a civil action in the nature of mandamus in the superior court to require the
239department to act in accordance with this subsection.
240 SECTION 15. Section 25F of said chapter 111, as so appearing, is hereby amended by
241inserting after the word “care”, in line 7, the following word:- financing.
242 SECTION 16. Section 25G of said chapter 111, as so appearing, is hereby amended by
243inserting after the word “agency”, in line 3, the following words:- , an independent community
244hospital, as defined by section 25C¼, whose primary service area overlaps with the primary
245service area of a proposed project under said section 25C¼. 13 of 14
246 SECTION 17. (a) Notwithstanding any general or special law, rule or regulation to the
247contrary, an applicant for a determination of need whose filing date of such application precedes
248the effective date of this act shall be required to submit a notice of a material change pursuant to
249section 13 of chapter 6D of the General Laws if the holder of the determination of need is subject
250to the requirements of said section 13 of said chapter 6D as amended by this act.
251 (b) Notwithstanding any general or special law, rule or regulation to the contrary, any
252determination of need issued to a holder that is subject to a cost and market impact review
253pursuant to said section 13 of said chapter 6D shall not go into effect until 30 days following the
254issuance of a final report on the cost and market impact review by the health policy commission.
255 SECTION 18. Notwithstanding any general or special law, rule or regulation to the
256contrary, the health planning council established in section 13 of chapter 16D of the General
257Laws shall submit a state health plan to the governor and the general court, as required by section
25822 of chapter 6D of the General Laws, on or before January 1, 2024.
259 SECTION 19. Notwithstanding any general or special law to the contrary, there shall be a
260task force to study and provide recommendations regarding the financing of the health policy
261commission, established in section 2 of chapter 6D of the General Laws.
262 The task force shall examine the funding sources and assessment algorithm to ensure a
263sustainable and equitable funding stream for the work of the health policy commission. The
264study shall include, but not be limited to, reviewing the existing funding mechanisms, identifying
265additional funding needs, considering additional healthcare stakeholders for whom it may be
266appropriate to assess and exploring other funding streams. The task force shall engage relevant 14 of 14
267stakeholders, including, but not limited to, acute hospitals, ambulatory surgical centers and
268surcharge payors.
269 The task force shall consist of 5 members: the chairs of the joint committee on health care
270financing, who shall serve as co-chairs; the secretary of health and human services or a designee;
271the executive director of the health policy commission or a designee; and the executive director
272of the center for health information and analysis or a designee.
273 The task force shall report its findings, along with any recommendations, to the clerks of
274the house of representatives and senate no later than January 1, 2024.