Massachusetts 2023-2024 Regular Session

Massachusetts Senate Bill S2871 Compare Versions

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1	1	SENATE . . . . . . . . . . . . . . No. 2871
2	2	The Commonwealth of Massachusetts
3	3	_______________
4	4	In the One Hundred and Ninety-Third General Court
5	5	(2023-2024)
6	6	_______________
7	7	SENATE, July 15, 2024.
8	8	The committee on Senate Ways and Means to whom was referred the House Bill
9	9	enhancing the market review process (House, No. 4653); reports, recommending that the same
10	10	ought to pass with an amendment striking out all after the enacting clause and inserting in place
11	11	thereof the text of Senate document numbered 2871; and by striking out the title and inserting in
12	12	place thereof the following title "An Act enhancing the health care market review process".
13	13	For the committee,
14	14	Michael J. Rodrigues 2 of 119
15	15	SENATE . . . . . . . . . . . . . . No. 2871
16	16	The Commonwealth of Massachusetts
17	17	_______________
18	18	In the One Hundred and Ninety-Third General Court
19	19	(2023-2024)
20	20	_______________
21	21	1 SECTION 1. Section 16 of chapter 6A of the General Laws, as appearing in the 2022
22	22	2Official Edition, is hereby amended by striking out, in lines 24 to 26, inclusive, the words “, the
23	23	3division of medical assistance and the Betsy Lehman center for patient safety and medical error
24	24	4reduction” and inserting in place thereof the following words:- and the division of medical
25	25	5assistance.
26	26	6 SECTION 2. Section 16D of said chapter 6A, as so appearing, is hereby amended by
27	27	7striking out, in lines 22 to 24, inclusive, the words “department of public health established by
28	28	8section 217 of chapter 111” and inserting in place thereof the following words:- health policy
29	29	9commission established by section 16 of chapter 6D.
30	30	10 SECTION 3. Section 16N of said chapter 6A is hereby repealed.
31	31	11 SECTION 4. Section 16T of said chapter 6A is hereby repealed.
32	32	12 SECTION 5. Section 1 of chapter 6D of the General Laws, as so appearing, is hereby
33	33	13amended by inserting after the definition of “Alternative payment methodologies or methods”
34	34	14the following definition:- 3 of 119
35	35	15 “Benchmark cycle”, a period of 2 consecutive calendar years during which the projected
36	36	16annualized growth rate in total health care expenditures in the commonwealth is calculated
37	37	17pursuant to section 9 and monitored pursuant to section 10.
38	38	18 SECTION 6. Said section 1 of said chapter 6D, as so appearing, is hereby further
39	39	19amended by inserting after the definition of “Fee-for-service” the following definition:-
40	40	20 “Financial interest”, when a private equity firm or its corporate affiliate has a direct or
41	41	21indirect ownership share of, or controlling interest in, or is a holder of significant debt from a
42	42	22provider or provider organization or the provider or provider organization’s corporate affiliates.
43	43	23 SECTION 7. Said section 1 of said chapter 6D, as so appearing, is hereby further
44	44	24amended by striking out the definition of “Health care cost growth benchmark” and inserting in
45	45	25place thereof the following definition:-
46	46	26 “Health care cost growth benchmark”, the projected annualized growth rate in total health
47	47	27care expenditures in the commonwealth during a benchmark cycle, as established in section 9.
48	48	28 SECTION 8. Said section 1 of said chapter 6D, as so appearing, is hereby further
49	49	29amended by inserting after the definition of “Health care provider” the following definition:-
50	50	30 “Health care resource”, any resource, whether personal or institutional in nature and
51	51	31whether owned or operated by any person, the commonwealth or political subdivision thereof,
52	52	32the principal purpose of which is to provide, or facilitate the provision of, services for the
53	53	33prevention, detection, diagnosis or treatment of those physical and mental conditions
54	54	34experienced by humans which usually are the result of, or result in, disease, injury, deformity or 4 of 119
55	55	35pain; provided, that the term “treatment” shall include custodial and rehabilitative care incident
56	56	36to infirmity, developmental disability or old age.
57	57	37 SECTION 9. Said section 1 of said chapter 6D, as so appearing, is hereby further
58	58	38amended by inserting after the definition of “Health care services” the following 2 definitions:-
59	59	39 “Health disparities”, preventable differences in the burden of disease, injury, violence or
60	60	40opportunities to achieve optimal health that are experienced by socially disadvantaged
61	61	41populations.
62	62	42 “Health equity”, the state in which a health system offers the infrastructure, facilities,
63	63	43services, geographic coverage, affordability and all other relevant features, conditions and
64	64	44capabilities to provide every resident of the commonwealth with the opportunity and reasonable
65	65	45expectation to achieve optimal health and equal access to health care regardless of race,
66	66	46ethnicity, language, disability, age, gender, gender identity, sexual orientation, social class,
67	67	47intersections among such communities or identities or socially determined circumstances.
68	68	48 SECTION 10. Said section 1 of said chapter 6D, as so appearing, is hereby further
69	69	49amended by inserting after the definition of “Hospital service corporation” the following 2
70	70	50definitions:-
71	71	51 “Management services organization”, a corporation that provides management or
72	72	52administrative services to a provider or provider organization for compensation.
73	73	53 “Maximum adjusted debt to adjusted EBITDA ratio”, the highest ratio of total adjusted
74	74	54debt to adjusted earnings before interest, taxes, depreciation and amortization the commission
75	75	55determines that a provider or provider organization is permitted to have without becoming 5 of 119
76	76	56financially unstable; provided, however, that the commission, in consultation with the center,
77	77	57shall establish a standard method of calculating and reporting total adjusted debt and adjusted
78	78	58earnings before interest, taxes, depreciation and amortization; and provided further, that the
79	79	59methodology and reporting shall include capitalized lease obligations.
80	80	60 SECTION 11. Said section 1 of said chapter 6D, as so appearing, is hereby further
81	81	61amended by striking out, in line 189, the words “not include excludes ERISA plans” and
82	82	62inserting in place thereof the following words:- include self-insured plans to the extent allowed
83	83	63under the federal Employee Retirement Income Security Act of 1974.
84	84	64 SECTION 12. Said section 1 of said chapter 6D, as so appearing, is hereby further
85	85	65amended by inserting after the definition of “Performance penalty” the following 2 definitions:-
86	86	66 “Pharmaceutical manufacturing company”, an entity engaged in the: (i) production,
87	87	67preparation, propagation, compounding, conversion or processing of prescription drugs, directly
88	88	68or indirectly, by extraction from substances of natural origin, independently by means of
89	89	69chemical synthesis or by a combination of extraction and chemical synthesis; or (ii) packaging,
90	90	70repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
91	91	71pharmaceutical manufacturing company shall not include a wholesale drug distributor licensed
92	92	72under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said
93	93	73chapter 112.
94	94	74 “Pharmacy benefit manager”, a person, business or other entity, however organized, that
95	95	75directly or through a subsidiary provides pharmacy benefit management services for prescription
96	96	76drugs and devices on behalf of a health benefit plan sponsor including, but not limited to, a self-
97	97	77insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit 6 of 119
98	98	78management services shall include, but not be limited to: (i) the processing and payment of
99	99	79claims for prescription drugs; (ii) the performance of drug utilization review; (iii) the processing
100	100	80of drug prior authorization requests; (iv) pharmacy contracting; (v) the adjudication of appeals or
101	101	81grievances related to prescription drug coverage contracts; (vi) formulary administration; (vii)
102	102	82drug benefit design; (viii) mail and specialty drug pharmacy services; (ix) cost containment; (x)
103	103	83clinical, safety and adherence programs for pharmacy services; and (xi) management of the cost
104	104	84of covered prescription drugs; provided further, that pharmacy benefit manager shall include a
105	105	85health benefit plan sponsor that does not contract with a pharmacy benefit manager and manages
106	106	86its own prescription drug benefits unless specifically exempted by the commission.
107	107	87 SECTION 13. Said section 1 of said chapter 6D, as so appearing, is hereby further
108	108	88amended by inserting after the definition of “Primary care provider” the following definition:-
109	109	89 “Private equity firm”, a publicly traded or non-publicly traded company that collects
110	110	90capital investments from individuals or entities and purchases, as a parent company or through
111	111	91another entity that it completely or partially owns or controls, a direct or indirect ownership share
112	112	92of, or controlling interest in, or otherwise obtains a financial interest in, a provider, provider
113	113	93organization or management services organization; provided, however, that private equity firm
114	114	94shall not include venture capital firms exclusively funding startups or other early-stage business.
115	115	95 SECTION 14. Said section 1 of said chapter 6D, as so appearing, is hereby further
116	116	96amended by striking out the definition of “Provider organization” and inserting the following 2
117	117	97definitions:-
118	118	98 “Provider organization”, a corporation, partnership, business trust, association or
119	119	99organized group of persons that is in the business of health care delivery or management, 7 of 119
120	120	100whether incorporated or not that represents 1 or more health care providers in contracting with
121	121	101carriers, third party administrators or public payers for the payments of health care services;
122	122	102provided, however, that “provider organization” shall include, but not be limited to, physician
123	123	103organizations, physician-hospital organizations, management services organizations, independent
124	124	104practice associations, provider networks, accountable care organizations, providers that are
125	125	105owned or controlled, fully or partially, by for-profit entities including, but not limited to, private
126	126	106equity firms, and any other organization that contracts with carriers, third party administrators or
127	127	107public payers for payment for health care services; and provided further, that “provider
128	128	108organization” shall not include any integrated care network that is owned and directed by long-
129	129	109term care.
130	130	110 SECTION 15. Said section 1 of said chapter 6D, as so appearing, is hereby further
131	131	111amended by inserting after the definition of “Quality measure” the following definition:-
132	132	112 “Real estate investment trust”, a real estate investment trust as defined in 26 U.S.C. 856.
133	133	113 SECTION 16. Said section 1 of said chapter 6D, as so appearing, is hereby further
134	134	114amended by inserting after the definition of “Total health care expenditures” the following 2
135	135	115definitions:-
136	136	116 “Total medical expenses”, the total cost of care for the patient population associated with
137	137	117a provider organization based on allowed claims for all categories of medical expenses and all
138	138	118non-claims related payments to providers.
139	139	119 “Unsafe financial actor”, a private equity firm, private equity firm affiliate or real estate
140	140	120investment trust that has a financial interest in a provider or provider organization closing,
141	141	121declaring bankruptcy, or otherwise discontinuing its operations, within 15 years of the private 8 of 119
142	142	122equity firm or real estate investment trust’s financial interest in the provider or provider
143	143	123organization.
144	144	124 SECTION 17. Section 2 of said chapter 6D, as so appearing, is hereby amended by
145	145	125striking out subsections (b) and (c) and inserting in place thereof the following 2 subsections:-
146	146	126 (b)(1) There shall be a board, with duties and powers established by this chapter, which
147	147	127shall govern the commission. The board shall consist of the following members: the secretary of
148	148	128administration and finance, ex officio; the secretary of health and human services, ex officio; 7
149	149	129members to be appointed by the governor pursuant to paragraph (2), 1 of whom shall serve as
150	150	130chair; and 4 members to be appointed by the attorney general. Each appointment after the initial
151	151	131term of appointment shall serve a term of 5 years; provided, however, that a person appointed to
152	152	132fill a vacancy shall serve for not more than the unexpired term. An appointed member of the
153	153	133board shall be eligible for reappointment; provided, however, that no appointed member shall
154	154	134concurrently hold full or part-time employment in the executive branch. The board shall annually
155	155	135elect 1 of its members to serve as vice-chairperson. Each member of the board shall be a resident
156	156	136of the commonwealth. A member of the board serving ex officio may appoint a designee under
157	157	137section 6A of chapter 30; provided further, however, that designee members shall not serve as
158	158	138chair or vice-chair.
159	159	139 (2) The person appointed by the governor to serve as chair shall have demonstrated
160	160	140expertise in health care administration, finance and management at a senior level. The second
161	161	141person appointed by the governor shall be a registered nurse with expertise in the delivery of care
162	162	142and development and utilization of innovative treatments in the practice of patient care. The third
163	163	143person appointed by the governor shall have demonstrated expertise in health plan administration 9 of 119
164	164	144and finance. The fourth person appointed by the governor shall have demonstrated expertise in
165	165	145representing the health care workforce as a leader in a labor organization. The fifth person
166	166	146appointed by the governor shall have demonstrated expertise in development and pricing for
167	167	147pharmaceuticals, biotechnology or medical devices. The sixth person appointed by the governor
168	168	148shall be a primary care physician. The seventh person appointed by the governor shall have
169	169	149demonstrated expertise as a purchaser of health insurance representing business management or
170	170	150health benefits administration. The first person appointed by the attorney general shall have
171	171	151demonstrated expertise in hospitals or hospital health systems administration, finance or
172	172	152management. The second person appointed by the attorney general shall have demonstrated
173	173	153expertise in health care consumer advocacy. The third person appointed by the attorney general
174	174	154shall have expertise in behavioral health, substance use disorder, mental health services and
175	175	155mental health reimbursement systems. The fourth person appointed by the attorney general shall
176	176	156be a health economist.
177	177	157 (c) Seven members of the board shall constitute a quorum, and the affirmative vote of 6
178	178	158members of the board shall be necessary and sufficient for any action taken by the board. No
179	179	159vacancy in the membership of the board shall impair the right of a quorum to exercise all the
180	180	160rights and duties of the commission. The appointed members of the board shall receive a stipend
181	181	161in an amount not more than 10 per cent of the salary of the secretary of administration and
182	182	162finance under section 4 of chapter 7; provided, however, that the chairperson shall receive a
183	183	163stipend in an amount not more than 12 per cent of the salary of the secretary; and provided
184	184	164further, that ex officio members and their designees shall not receive a stipend for their service as
185	185	165board members. Appointed members of the board shall be special state employees subject to
186	186	166chapter 268A. An appointed member of the board shall not be employed by, a consultant to, a 10 of 119
187	187	167member of the board of directors of or otherwise be a representative of a health care entity,
188	188	168pharmaceutical manufacturer or pharmacy benefit manager while serving on the board.
189	189	169 SECTION 18. Said chapter 6D is hereby further amended by inserting after section 3 the
190	190	170following section:-
191	191	171 Section 3A. (a) There shall be within the commission an office for pharmaceutical policy
192	192	172and analysis. The office shall: (i) issue reports including, but not limited to, an annual report
193	193	173pursuant to subsection (b) and analyses of: (A) pharmaceutical spending in the commonwealth;
194	194	174the affordability of and access to pharmaceutical drugs; (B) the potential innovation of high
195	195	175value drugs and orphan drugs; and (C) the impacts of these issues on racially and ethnically
196	196	176diverse populations and individuals with disabilities; (ii) analyze pharmaceutical data collected
197	197	177by agencies of the commonwealth including, but not limited to, pharmaceutical data collected by
198	198	178the center pursuant to sections 8 to 10, inclusive, of chapter 12C and pharmaceutical data
199	199	179available through public and proprietary sources; provided, however, that the commission may
200	200	180solicit additional data and information directly from manufacturers, pharmacy benefit managers
201	201	181and payers to the extent necessary to perform the duties set forth in this section, including, but
202	202	182not limited to, conducting an annual survey of payers on pharmaceutical access and plan design;
203	203	183provided, however, that confidential data shall not be a public record and shall be exempt from
204	204	184disclosure pursuant to clause Twenty-sixth of section 7 of chapter 4 and section 10 of chapter 66;
205	205	185(iii) assess the value and pricing of pharmaceutical drugs used in the commonwealth including,
206	206	186but not limited to, reviewing disclosures submitted pursuant to section 8A; and (iv) advise other
207	207	187state agencies and entities including, but not limited to, the executive office of health and human
208	208	188services, the office of Medicaid, the division of insurance, the group insurance commission, the
209	209	189commonwealth health insurance connector authority, the department of corrections, the 11 of 119
210	210	190Massachusetts Life Sciences Center and the joint committee on health care financing on actions,
211	211	191including any proposed legislation, that may improve the value and pricing of pharmaceutical
212	212	192drugs in the commonwealth.
213	213	193 (b) The commission shall compile an annual report concerning trends and underlying
214	214	194factors for pharmaceutical drug spending including, but not limited to, analysis of: (i) prices and
215	215	195utilization; (ii) drugs or categories of drugs with the highest impact on spending; (iii) trends in
216	216	196patient out-of-pocket spending; and (iv) any recommendations for strategies to reduce
217	217	197pharmaceutical spending growth, promote affordability and enhance pharmaceutical access. The
218	218	198report shall be based on: (A) the commission’s analysis of information provided at the annual
219	219	199health care cost trends hearings by providers, provider organizations and insurers; (B) data
220	220	200collected by the center for health information and analysis under sections 8 to10, inclusive, of
221	221	201chapter 12C; and (C) any other information the commission considers necessary to fulfill its
222	222	202duties under this section, as further defined in regulations promulgated by the commission.
223	223	203Annually, not later than December 31, the commission shall submit the report to the chairs of the
224	224	204house and senate committees on ways and means and the chairs of the joint committee on health
225	225	205care financing and shall publish and make the report available to the public.
226	226	206 SECTION 19. Said chapter 6D is hereby further amended by striking out section 4, as
227	227	207appearing in the 2022 Official Edition, and inserting in place thereof the following section:-
228	228	208 Section 4. There shall be an advisory council to the commission. The council shall advise
229	229	209on the overall operation and policy of the commission. The commission shall convene the
230	230	210council quarterly or more frequently as requested by the commission. Members of the board of
231	231	211the health policy commission shall convene and consult with advisory council members on 12 of 119
232	232	212issues brought before the commission and shall present the views of advisory council members
233	233	213in board meetings. The council shall be appointed by the executive director and reflect a broad
234	234	214distribution of diverse perspectives on the health care system, including, but not limited to,
235	235	215health care professionals, educational institutions, consumer representatives, purchasers of health
236	236	216insurance representing business management or health benefits administration, medical device
237	237	217manufacturers, representatives of the biotechnology industry, pharmaceutical manufacturers,
238	238	218providers, provider organizations, hospitals, community health centers, labor organizations and
239	239	219public and private payers.
240	240	220 SECTION 20. Section 5 of said chapter 6D, as so appearing, is hereby amended by
241	241	221inserting after the word “growth”, in line 3, the following words:- and affordability.
242	242	222 SECTION 21. Said section 5 of said chapter 6D, as so appearing, is hereby further
243	243	223amended by striking out, in line 10, the words “and (vii)” and inserting in place thereof the
244	244	224following words:- ; (vii) monitor pharmaceutical spending and pricing and patient access to
245	245	225pharmaceuticals; and (viii).
246	246	226 SECTION 22. The first paragraph of section 6 of said chapter 6D, as so appearing, is
247	247	227hereby amended by adding the following sentence:-
248	248	228 Each pharmaceutical manufacturing company and pharmacy benefit manager shall pay to
249	249	229the commonwealth an amount for the estimated expenses of the center and for the other purposes
250	250	230described in this chapter.
251	251	231 SECTION 23. Said section 6 of said chapter 6D, as so appearing, is hereby further
252	252	232amended by striking out, in lines 5 and 36, the figure “33”, each time it appears, and inserting in
253	253	233place thereof, in each instance, the following figure:- 25. 13 of 119
254	254	234 SECTION 24. Said section 6 of said chapter 6D, as so appearing, is hereby further
255	255	235amended by adding the following 3 paragraphs:-
256	256	236 To the maximum extent permissible under federal law, provided that such assessment
257	257	237will not result in any reduction of federal financial participation in Medicaid, the assessed
258	258	238amount for pharmaceutical manufacturing companies shall be not less than 25 per cent of the
259	259	239amount appropriated by the general court for the expenses of the commission less amounts
260	260	240collected from: (i) filing fees; (ii) fees and charges generated by the commission's publication or
261	261	241dissemination of reports and information; and (iii) federal matching revenues received for said
262	262	242expenses or received retroactively for expenses of predecessor agencies. Pharmaceutical
263	263	243manufacturing companies shall pay such assessed amount multiplied by the ratio of the
264	264	244pharmaceutical manufacturing company’s gross sales of outpatient prescription drugs dispensed
265	265	245in the commonwealth or similar measure determined by the commission consistent with
266	266	246applicable federal requirements.
267	267	247 To fund the operations of the commonwealth’s licensure of pharmacy benefit managers
268	268	248and to the maximum extent permissible under federal law; provided, however, that such
269	269	249assessment will not result in any reduction of federal financial participation in Medicaid, the
270	270	250assessed amount for pharmacy benefit managers shall be not less than 25 per cent of the amount
271	271	251appropriated by the general court for the expenses of the commission less amounts collected
272	272	252from: (i) filing fees; (ii) fees and charges generated by the commission's publication or
273	273	253dissemination of reports and information; and (iii) federal matching revenues received for said
274	274	254expenses or received retroactively for expenses of predecessor agencies. Pharmacy benefit
275	275	255managers shall pay such assessed amount multiplied by the ratio of the pharmacy benefit
276	276	256manager’s gross revenue related to outpatient prescription drugs dispensed in the commonwealth 14 of 119
277	277	257or similar measure determined by the commission consistent with applicable federal
278	278	258requirements. In no event shall this assessment, when combined with an assessment of pharmacy
279	279	259benefit managers pursuant to section 7 of chapter 12C and a pharmacy benefit manager licensing
280	280	260fee pursuant to section 2 of chapter 176Y, exceed the commonwealth’s estimated expense in
281	281	261operating the pharmacy benefit manager licensure program.
282	282	262 Each pharmaceutical manufacturing company and each pharmacy benefit manager shall
283	283	263make a preliminary payment to the commission annually on October 1 in an amount equal to 1/2
284	284	264of the initial year’s total assessment and, for subsequent years, in an amount equal to 1/2 of the
285	285	265previous year's total assessment. Thereafter, each pharmaceutical manufacturing company and
286	286	266each pharmacy benefit manager shall pay, within 30 days of receiving notice from the
287	287	267commission, the balance of the total assessment for the current year as determined by the
288	288	268commission.
289	289	269 SECTION 25. Section 7 of said chapter 6D, as so appearing, is hereby amended by
290	290	270striking out, in line 35, the words “and (vi)” and inserting in place thereof the following words:-
291	291	271(vi) advance health equity; and (vii).
292	292	272 SECTION 26. Said chapter 6D is hereby further amended by striking out section 8, as so
293	293	273appearing, and inserting in place thereof the following section:-
294	294	274 Section 8. (a) Not later than October 1 of every year, the commission shall hold public
295	295	275hearings based on the report submitted by the center pursuant to section 16 of chapter 12C
296	296	276comparing: (i) the average of the annual growth in total health care expenditures during each
297	297	277year of the most recently concluded benchmark cycle to the health care cost growth benchmark
298	298	278for that benchmark cycle; and (ii) the growth in the affordability index pursuant to said section 15 of 119
299	299	27916 of said chapter 12C to the affordability benchmark. At said hearings, the commission shall
300	300	280examine the costs, prices and cost trends of health care providers, provider organizations, private
301	301	281and public health care payers, pharmaceutical manufacturing companies and pharmacy benefit
302	302	282managers and any relevant impact of private equity firms, real estate investment trusts and
303	303	283management services organizations on such costs, prices and cost trends, with particular
304	304	284attention to factors that contribute to cost growth within the commonwealth's health care system
305	305	285and trends in annual behavioral health expenditures.
306	306	286 (b) The attorney general may intervene in such hearings.
307	307	287 (c) Public notice of any hearing shall be provided not less than 60 days in advance.
308	308	288 (d) The commission shall identify as witnesses for the public hearing a representative
309	309	289sample of providers, provider organizations, payers, private equity firms, real estate investment
310	310	290trusts, management services organizations, pharmaceutical manufacturing companies, pharmacy
311	311	291benefit managers and others, including: (i) not less than 3 academic medical centers, including
312	312	292the 2 acute hospitals with the highest level of net patient service revenue; (ii) not less than 3
313	313	293disproportionate share hospitals, including the 2 hospitals whose largest per cent of gross patient
314	314	294service revenue is attributable to Title XVIII and XIX of the Social Security Act or other
315	315	295governmental payers; (iii) community hospitals from not less than l 3 separate regions of the
316	316	296commonwealth; (iv) freestanding ambulatory surgical centers from not less than 3 separate
317	317	297regions of the commonwealth; (v) community health centers from at not less than 3 separate
318	318	298regions of the commonwealth; (vi) the 5 commercial carriers with the highest enrollments in the
319	319	299commonwealth; (vii) any managed care organization that provides health benefits under Title
320	320	300XIX of the Social Security Act ; (viii) the group insurance commission; (ix) not less than 3 16 of 119
321	321	301municipalities that have adopted chapter 32B; (x) not less than 4 provider organizations which
322	322	302shall be from diverse geographic regions of the commonwealth, not less than 2 of which shall be
323	323	303certified as accountable care organizations and 1 of which shall be certified as a model ACO; (xi)
324	324	304at least 1 private equity firms, real estate investment trust or management services organization
325	325	305associated with a provider or provider organization; (xii) the assistant secretary for MassHealth;
326	326	306(xiii) not less than 3 representatives of pharmaceutical manufacturing companies doing business
327	327	307in the commonwealth or trade groups thereof; (xiv) 1 pharmacy benefit manager or trade groups
328	328	308thereof; and (xv) any witness identified by the attorney general or the center.
329	329	309 (e) Witnesses shall provide testimony under oath and subject to examination and cross
330	330	310examination by the commission, the executive director of the center and the attorney general at
331	331	311the public hearing in a manner and form to be determined by the commission, including, but not
332	332	312limited to: (i) in the case of providers and provider organizations, testimony concerning payment
333	333	313systems, care delivery models, payer mix, cost structures, administrative and labor costs, capital
334	334	314and technology cost, adequacy of public payer reimbursement levels, reserve levels, utilization
335	335	315trends, relative price, quality improvement and care-coordination strategies, investments in
336	336	316health information technology, the relation of private payer reimbursement levels to public payer
337	337	317reimbursements for similar services, efforts to improve the efficiency of the delivery system,
338	338	318efforts to reduce the inappropriate or duplicative use of technology and the impact of price
339	339	319transparency on prices; (ii) in the case of private and public payers, testimony concerning factors
340	340	320underlying premium cost and rate increases, the relation of reserves to premium costs, efforts by
341	341	321the payer to reduce the use of fee-for-service payment mechanisms, the payer's efforts to develop
342	342	322benefit design, network design and payment policies that enhance product affordability and
343	343	323encourage efficient use of health resources and technology including utilization of alternative 17 of 119
344	344	324payment methodologies, efforts by the payer to increase consumer access to health care
345	345	325information, efforts by the payer to promote the standardization of administrative practices, the
346	346	326impact of price transparency on prices and any other matters as determined by the commission;
347	347	327(iii) in the case of the assistant secretary for MassHealth, testimony concerning the structure,
348	348	328benefits, eligibility, caseload and financing of MassHealth and other Medicaid programs
349	349	329administered by the office of Medicaid or in partnership with other state and federal agencies and
350	350	330the agency’s activities to align or redesign said programs in order to encourage the development
351	351	331of more integrated and efficient health care delivery systems; (iv) in the case of private equity
352	352	332firms, real estate investment trusts or management services organization, testimony concerning
353	353	333changes to patient access to health care services or facilities, health outcomes, prices charged to
354	354	334insurers and patients, staffing levels, clinical workflow, financial stability and ownership
355	355	335structure as the result of an acquisition of a provider or provider organization, the amount of debt
356	356	336and equity leveraged in an acquisition of a provider or provider organization, additional debt
357	357	337taken on by a provider or provider organization after an acquisition, dividends paid out to
358	358	338investors, changes to real estate ownership and any leaseback agreements and management of
359	359	339clinical assets and any other matters as determined by the commission; and (v) in the case of
360	360	340pharmacy benefit managers and pharmaceutical manufacturing companies, testimony concerning
361	361	341factors underlying prescription drug costs and price changes including, but not limited to, the
362	362	342initial prices of drugs coming to market and subsequent price changes, changes in industry profit
363	363	343levels, marketing expenses, reverse payment patent settlements, impacts of manufacturer rebates,
364	364	344discounts and other price concessions on net pricing, availability of alternative drugs or
365	365	345treatments, corporate ownership organizational structure and any other matters as determined by
366	366	346the commission. The commission shall solicit testimony from a payer which has been identified 18 of 119
367	367	347by the center's annual report under subsection (a) of section 16 of chapter 12C as: (A) paying
368	368	348providers more than 10 per cent above or more than 10 per cent below the average relative price;
369	369	349or (B) entering into alternative payment contracts that vary by more than 10 per cent. A payer
370	370	350identified by the center's report shall explain the extent of price variation between the payer's
371	371	351participating providers and describe any efforts to reduce such price variation.
372	372	352 (f) If the center's annual report pursuant to subsection (a) of section 16 of chapter 12C
373	373	353finds that the average of the annual percentage changes in total health care expenditures during a
374	374	354benchmark cycle exceeded the health care cost growth benchmark for that benchmark cycle or
375	375	355the percentage change in the affordability index exceeded the affordability benchmark, the
376	376	356commission may identify additional witnesses for the public hearing. Witnesses shall provide
377	377	357testimony subject to examination and cross examination by the commission, the executive
378	378	358director of the center and attorney general at the public hearing in a manner and form to be
379	379	359determined by the commission, including, but not limited to: (i) testimony concerning
380	380	360unanticipated events that may have impacted the total health care cost expenditures and
381	381	361affordability, including, but not limited to, a public health crisis such as an outbreak of a disease,
382	382	362a public safety event or a natural disaster; (ii) testimony concerning trends in patient acuity,
383	383	363complexity or utilization of services; (iii) testimony concerning trends in input cost structures,
384	384	364including, but not limited to, the introduction of new pharmaceuticals, medical devices and other
385	385	365health technologies; (iv) testimony concerning the cost of providing certain specialty services,
386	386	366including, but not limited to, the provision of health care to children, cancer-related health care
387	387	367and medical education; (v) testimony related to unanticipated administrative costs for carriers,
388	388	368including, but not limited to, costs related to information technology, administrative
389	389	369simplification efforts, labor costs and transparency efforts; (vi) testimony related to costs due the 19 of 119
390	390	370implementation of state or federal legislation or government regulation; (vii) testimony related to
391	391	371premiums by market segment and community, plan and benefit design and cost sharing,
392	392	372including deductibles and co-pays; and (viii) any other factors that may have led to excessive
393	393	373health care cost growth.
394	394	374 (g) The commission shall annually compile a report for the most recently concluded
395	395	375benchmark cycle concerning spending trends, including primary care and behavioral health
396	396	376expenditures, affordability and the underlying factors influencing said spending trends. The
397	397	377report shall be based on the commission’s analysis of information provided at the hearings by
398	398	378witnesses, providers, provider organizations, payers, private equity firms, real estate investment
399	399	379trusts, management services organizations, pharmaceutical manufacturing companies and
400	400	380pharmacy benefit managers, registration data collected pursuant to section 11, data collected or
401	401	381analyzed by the center pursuant to sections 8 to 10A, inclusive, of chapter 12C and any other
402	402	382available information that the commission considers necessary to fulfill its duties under this
403	403	383section, as further defined in regulations promulgated by the commission. To the extent
404	404	384practicable, the report shall not contain any data that is likely to compromise the financial,
405	405	385competitive or proprietary nature of the information. The report shall be submitted to the chairs
406	406	386of the house and senate committees on ways and means and the chairs of the joint committee on
407	407	387health care financing and shall be published and made available to the public annually, not later
408	408	388than December 31, of each year. The report shall include recommendations for strategies to
409	409	389increase the efficiency of the health care system and promote affordability for individuals and
410	410	390families and analysis of specific spending trends that may impede the commonwealth’s ability to
411	411	391meet the health care cost growth benchmark, together with any drafts of legislation language
412	412	392necessary to implement said recommendations. 20 of 119
413	413	393 SECTION 27. Said chapter 6D is hereby further amended by striking out sections 9 and
414	414	39410, as so appearing, and inserting in place thereof the following 3 sections:-
415	415	395 Section 9. (a) Not later than April 15 of every year, the board shall establish the health
416	416	396care cost growth benchmark for a benchmark cycle consisting of the 2 calendar years beginning
417	417	397after the year in which the April 15 date occurs.
418	418	398 (b) The health care cost growth benchmark shall be equal to the average of the growth
419	419	399rate of potential gross state product established under section 7H½ of chapter 29 for each of the 2
420	420	400calendar years that comprise the benchmark cycle. The commission shall establish procedures to
421	421	401prominently publish the health care cost growth benchmark on the commission’s website.
422	422	402 (c) For all benchmark cycles through the cycle containing the calendar years 2039 and
423	423	4032040, if the commission determines that an adjustment in the health care cost growth benchmark
424	424	404is reasonably warranted, having first considered any testimony at a public hearing as required
425	425	405under subsection (d), the board of the commission may recommend a modification of the health
426	426	406care cost growth benchmark, in any amount as determined by the commission. The board shall
427	427	407submit notice of its recommendation for any modification to the joint committee on health care
428	428	408financing. Within 30 days of such filing, the joint committee may hold a public hearing on the
429	429	409board's proposed modification to the health care cost growth benchmark. Within 30 days of the
430	430	410public hearing, the joint committee may report its findings and proposed legislation, including its
431	431	411recommendation on whether to affirm or reject the boards’ recommendation, to the general court
432	432	412and provide a copy of its findings and proposed legislation to the board.
433	433	413 (d) Prior to making any recommended modification to the health care cost growth
434	434	414benchmark under subsection (c), the board shall hold a public hearing on any such recommended 21 of 119
435	435	415modification. The public hearing shall be based on the report submitted by the center pursuant to
436	436	416section 16 of chapter 12C comparing the average of the annual growth in total health care
437	437	417expenditures during each year of the most recently concluded benchmark cycle to the health care
438	438	418cost growth benchmark, any other data provided by the center and such other pertinent
439	439	419information or data as may be available to the board. The hearing shall examine the costs, prices
440	440	420and cost trends of health care provider, provider organization and private and public health care
441	441	421payer and any relevant impact of private equity firms, real estate investment trusts, management
442	442	422services organizations, pharmaceutical manufacturing companies and pharmacy benefit
443	443	423managers on such costs, prices and cost trends, with particular attention to factors that contribute
444	444	424to cost growth within the commonwealth’s health care system and whether, based on the
445	445	425testimony, information and data presented at the hearing, a modification in the health care cost
446	446	426growth benchmark is appropriate. The commission shall provide public notice of such hearing
447	447	427not less than 45 days prior to the date of the hearing, including notice to the joint committee on
448	448	428health care financing. The joint committee on health care financing may participate in the
449	449	429hearing. The commission shall identify as witnesses for the public hearing a representative
450	450	430sample of providers, provider organizations, payers, private equity firms, real estate investment
451	451	431trusts, management services organizations, pharmaceutical manufacturing companies, pharmacy
452	452	432benefit managers and such other interested parties as the commission may determine. Any other
453	453	433interested parties may testify at the hearing.
454	454	434 (e) Any recommendation of the commission to modify the health care cost growth
455	455	435benchmark under subsection (c) of this section shall be approved by a two-thirds vote of the
456	456	436board. 22 of 119
457	457	437 Section 9A. Not later than April 15 of every year, the board shall establish a health care
458	458	438affordability benchmark for the following calendar year. The commission shall establish
459	459	439procedures to prominently publish the annual affordability benchmark on the commission's
460	460	440website.
461	461	441 Section 10. (a) For the purpose of this section, “Health care entity” shall mean any health
462	462	442care entity identified by the center pursuant to section 18 of chapter 12C.
463	463	443 (b) The commission shall provide notice to a health care entity that the commission may
464	464	444analyze the health care spending performance of such health care entity and that such health care
465	465	445entity shall perform certain actions as provided in subsection (c); provided, however, that at the
466	466	446discretion of the commission, the commission may publicly identify the identities and
467	467	447performance results of such health care entity.
468	468	448 (c) The commission may require a performance improvement plan to be filed with the
469	469	449commission for a health care entity that is identified by the center under section 18 of chapter
470	470	45012C.
471	471	451 (d) In addition to the notice provided under subsection (b), the commission shall provide
472	472	452written notice to a health care entity that it determines must file a performance improvement
473	473	453plan. Within 45 days of receipt of such written notice, the health care entity shall either:
474	474	454 (1) file a performance improvement plan with the commission; or
475	475	455 (2) file an application with the commission to waive or extend the requirement to file a
476	476	456performance improvement plan. 23 of 119
477	477	457 (e) The health care entity may file documentation or supporting evidence with the
478	478	458commission to support the health care entity’s application to waive or extend the requirement to
479	479	459file a performance improvement plan. The commission shall require the health care entity to
480	480	460submit any other relevant information it deems necessary in considering the waiver or extension
481	481	461application; provided, however, that such information shall be made public at the discretion of
482	482	462the commission.
483	483	463 (f) The commission may waive or delay the requirement for a health care entity to file a
484	484	464performance improvement plan in response to a waiver or extension request filed under
485	485	465subsection (d) in light of all information received from the health care entity, based on a
486	486	466consideration of the following factors:
487	487	467 (1) the spending, price and utilization trends of the health care entity over time,
488	488	468independently and as compared to similar entities, and any demonstrated improvement to reduce
489	489	469spending or total medical expenses;
490	490	470 (2) any ongoing strategies or investments that the health care entity is implementing to
491	491	471improve future long-term efficiency and reduce spending growth;
492	492	472 (3) whether the factors that led to increased spending for the health care entity can
493	493	473reasonably be considered to be unanticipated and outside of the control of the entity. Such factors
494	494	474may include, but shall not be limited to, age and other health status adjusted factors and other
495	495	475cost inputs such as pharmaceutical expenses, medical device expenses and labor costs;
496	496	476 (4) the overall financial condition of the health care entity; 24 of 119
497	497	477 (5) a significant difference between the growth rate of potential gross state product and
498	498	478the growth rate of actual gross state product, as determined under section 7H½ of chapter 29; and
499	499	479 (6) any other factors the commission considers relevant.
500	500	480 (g) If the commission declines to waive or extend the requirement for the health care
501	501	481entity to file a performance improvement plan, the commission shall provide written notice to the
502	502	482health care entity that its application for a waiver or extension was denied and the health care
503	503	483entity shall file a performance improvement plan.
504	504	484 (h) A health care entity shall file a performance improvement plan: (A) within 45 days of
505	505	485receipt of a notice under subsection (d); (B) if the health care entity has requested a waiver or
506	506	486extension, within 45 days of receipt of a notice that such waiver or extension has been denied; or
507	507	487(C) if the health care entity is granted an extension, on the date given on such extension. The
508	508	488performance improvement plan shall identify the causes of the entity's excessive spending, and
509	509	489shall include, but not be limited to, specific strategies, adjustments and action steps the entity
510	510	490proposes to implement to improve spending performance. The proposed performance
511	511	491improvement plan shall include specific identifiable and measurable expected outcomes and a
512	512	492timetable for implementation. The timetable for a performance improvement plan shall not
513	513	493exceed 18 months.
514	514	494 (i) The commission shall approve any performance improvement plan that it determines
515	515	495is reasonably likely to address the underlying cause of the health care entity’s excessive spending
516	516	496and has a reasonable expectation for successful implementation. 25 of 119
517	517	497 (j) If the board determines that the performance improvement plan is unacceptable or
518	518	498incomplete, the commission may provide consultation on the criteria that have not been met and
519	519	499may allow an additional time period of not more than 30 calendar days, for resubmission.
520	520	500 (k) Upon approval of the proposed performance improvement plan, the commission shall
521	521	501notify the health care entity to begin implementation of the performance improvement plan.
522	522	502Public notice shall be provided by the commission on its website, identifying that the health care
523	523	503entity is implementing a performance improvement plan. Health care entities implementing an
524	524	504approved performance improvement plan shall be subject to additional reporting requirements
525	525	505and compliance monitoring, as determined by the commission. The commission shall assist the
526	526	506health care entity with the successful implementation of the performance improvement plan.
527	527	507 (l) Health care entities subject to a performance improvement plan shall, in good faith,
528	528	508work to implement such plan and may file amendments to the performance improvement plan at
529	529	509any point during the implementation of the performance improvement plan, subject to approval
530	530	510of the commission.
531	531	511 (m) At the conclusion of the timetable established in the performance improvement plan,
532	532	512the health care entity shall report to the commission regarding the outcome of the performance
533	533	513improvement plan. If the commission finds that the performance improvement plan was
534	534	514unsuccessful, the commission shall either: (i) extend the implementation timetable of the existing
535	535	515performance improvement plan; (ii) approve amendments to the performance improvement plan
536	536	516as proposed by the health care entity; (iii) require the health care entity to submit a new
537	537	517performance improvement plan under subsection (c), including requiring specific elements for 26 of 119
538	538	518approval; or (iv) waive or delay the requirement to file any additional performance improvement
539	539	519plans.
540	540	520 (n) Upon the successful completion of the performance improvement plan, the identity of
541	541	521the health care entity shall be removed from the list of entities currently implementing a
542	542	522performance improvement plan on the commission’s website.
543	543	523 (o) The commission may submit a recommendation for proposed legislation to the joint
544	544	524committee on health care financing if the commission determines that further legislative
545	545	525authority is needed to achieve the commonwealth’s health care quality and spending
546	546	526sustainability objectives, assist health care entities with the implementation of performance
547	547	527improvement plans or otherwise ensure compliance with the provisions of this section.
548	548	528 (p)(1) If the commission determines that a health care entity has: (i) willfully neglected to
549	549	529file a performance improvement plan with the commission within 45 days as required under
550	550	530subsection (d); (ii) failed to file an acceptable performance improvement plan in good faith with
551	551	531the commission; (iii) failed to implement the performance improvement plan in good faith; or
552	552	532(iv) knowingly failed to provide or falsified information required by this section to the
553	553	533commission, the commission may: (A) assess a civil penalty to the health care entity of not more
554	554	534than $500,000 for a first violation, not more than $750,000 for a second violation and not more
555	555	535than $1,000,000 for a third or subsequent violation; provided, however, that a civil penalty
556	556	536assessed pursuant to one of the above clauses shall be a first offense if a previously assessed
557	557	537penalty was assessed pursuant to a different clause; (B) stay consideration of any material change
558	558	538notice submitted under section 13 of this chapter by the health care entity or any affiliates until
559	559	539the commission determines that the health care entity is in compliance with this section; and (C) 27 of 119
560	560	540notify the department of public health that the health care entity, if applying for a notice of
561	561	541determination of need, is not in compliance with this section. A civil penalty assessed under this
562	562	542subsection shall be deposited into the Healthcare Payment Reform Fund established under
563	563	543section 100 of chapter 194 of the acts of 2011. Except as otherwise expressly authorized under
564	564	544this section, the commission shall seek to promote compliance with this section and shall only
565	565	545impose a civil penalty as a last resort.
566	566	546 (2) In lieu of requiring a performance improvement plan pursuant to this section, the
567	567	547commission may assess a civil penalty on a health care entity identified by the center pursuant to
568	568	548section 18 of chapter 12C if the commission determines that a performance improvement plan is
569	569	549not an appropriate remedial measure. The civil penalty may amount to not more than the amount
570	570	550of spending attributable to the health care entity that is in excess of the health care cost growth
571	571	551benchmark and shall be deposited into the Healthcare Payment Reform Fund established under
572	572	552section 100 of chapter 194 of the acts of 2011. Prior to assessing the civil penalty, the
573	573	553commission shall provide the health care entity with written notice of its intent to assess the
574	574	554penalty; provided, however, that the commission shall provide the health care entity not less than
575	575	55510 days to respond to said written notice with a written request for a hearing; provided further,
576	576	556that, if the health care entity requests a hearing, the commission shall hold the hearing within 30
577	577	557days of the commission’s receipt of the request; and provided further, that if the health care
578	578	558entity does not request a hearing, the commission shall provide the health care entity with not
579	579	559less than 30 days to respond in writing to said written notice.
580	580	560 (q) The commission shall promulgate regulations necessary to implement this section;
581	581	561provided, however, that notice of any proposed regulations shall be filed with the joint 28 of 119
582	582	562committee on state administration and regulatory oversight and the joint committee on health
583	583	563care financing not less than180 days before adoption.
584	584	564 SECTION 28. Section 11 of said chapter 6D, as so appearing, is hereby amended by
585	585	565striking out, in line 3, the words “2 years” and inserting in place thereof the following words:- 1
586	586	566year.
587	587	567 SECTION 29. Said section 11 of said chapter 6D, as so appearing, is hereby further
588	588	568amended by striking out subsection (b) and inserting in place thereof the following subsection:-
589	589	569 (b) The commission shall require that all provider organizations report information
590	590	570detailed in section 9 of chapter 12C. The commission may specify additional data elements in a
591	591	571given reporting year to support the development of the state health plan or the focused
592	592	572assessments defined in section 22 of chapter 6D.
593	593	573 SECTION 30. Said section 11 of said chapter 6D, as so appearing, is hereby further
594	594	574amended by striking out subsection (d) and inserting in place thereof the following subsection:-
595	595	575 (d) The commission may enter into interagency agreements with the center and other
596	596	576state agencies to effectuate the goals of this section.
597	597	577 SECTION 31. Said chapter 6D is hereby further amended by striking out sections 12 and
598	598	57813, as so appearing, and inserting in place thereof the following 2 sections:-
599	599	579 Section 12. (a) The commission shall ensure the timely reporting of information required
600	600	580under section 11. The commission shall notify provider organizations of any applicable reporting
601	601	581deadlines; provided, that the commission shall notify, in writing, a provider organization that has
602	602	582failed to meet a reporting deadline and that failure to respond within 2 weeks of the receipt of the 29 of 119
603	603	583notice may result in penalties. The commission may assess a penalty against a provider
604	604	584organization that fails, without just cause, to provide the requested information within 2 weeks
605	605	585following receipt of the written notice required under this subsection of up to $10,000 per week
606	606	586for each week of delay after the 2-week period following provider organization's receipt of the
607	607	587written notice; provided, however, that the maximum annual penalty against a provider
608	608	588organization under this section shall be $500,000 per registration cycle. Amounts collected under
609	609	589this section shall be deposited in the Healthcare Payment Reform Fund established under section
610	610	590100 of chapter 194 of the Acts of 2011.
611	611	591 (b) Notwithstanding any general or special law to the contrary, any material change
612	612	592notice submitted under section 13 and any determination of need application submitted under
613	613	593sections 25B to 25G, inclusive, of chapter 111 by a provider organization that has failed to
614	614	594provide required information pursuant to section 11 and section 9 of chapter 12C shall be
615	615	595incomplete until such time as the provider organization has provided such required information.
616	616	596 (c) Nothing in this chapter shall require a provider organization which represents
617	617	597providers who collectively receive, less than $25,000,000 in annual net patient service revenue to
618	618	598be registered if such provider or provider organization is not a risk-bearing provider organization
619	619	599or is not owned or controlled, whether fully or partially, directly or indirectly, by a private equity
620	620	600firm.
621	621	601 Section 13. (a)(1) Every provider or provider organization shall, before making any
622	622	602material change to its operations or governance structure, submit notice to the commission, the
623	623	603center and the attorney general of such change not less than 60 days before the date of the
624	624	604proposed change, provided, however, that material changes shall include, but not be limited to: 30 of 119
625	625	605(i) significant expansions in a provider or provider organization’s capacity; (ii) a corporate
626	626	606merger, acquisition or affiliation of a provider or provider organization and a carrier; (iii)
627	627	607mergers or acquisitions of hospitals or hospital systems; (iv) acquisition of insolvent provider
628	628	608organizations; (v) significant new for-profit investment in, acquisitions of the assets of or
629	629	609ownership or direct or indirect control of a provider or provider organization by for-profit
630	630	610entities, including, but not limited to, private equity firms and management services
631	631	611organizations; (vi) substantial acquisition or sale of assets for an ownership share or for the
632	632	612purposes of a lease-back arrangement; (vii) conversion of a provider or provider organization
633	633	613from a non-profit entity to a for-profit entity; and (viii) mergers or acquisitions of provider
634	634	614organizations which will result in a provider organization having a dominant market share in a
635	635	615given service or region.
636	636	616 Within 30 days of receipt of a completed notice filed under the commission’s regulations,
637	637	617the commission shall conduct a preliminary review to determine whether the material change is
638	638	618likely to result in a significant impact on the commonwealth’s ability to meet the health care cost
639	639	619growth benchmark established in section 9, or on the competitive market. If the commission
640	640	620finds that the material change is likely to have a significant impact on the commonwealth’s
641	641	621ability to meet the health care cost growth benchmark, or on the competitive market, the
642	642	622commission may conduct a cost and market impact review under this section.
643	643	623 (2) If the commission determines that a proposed material change is likely to have a
644	644	624significant negative impact on health care consumers in the commonwealth, including through
645	645	625significantly increased costs, significantly reduced quality, or significantly impaired access to
646	646	626health care services, including for at-risk, underserved and government payer patient
647	647	627populations, the commission may recommend modifications to the proposed material change to 31 of 119
648	648	628mitigate such impacts. Notwithstanding any general or special law to the contrary, failure to
649	649	629modify the proposed material change to substantially address such impacts identified by the
650	650	630commission shall constitute an unfair business practice under chapter 93A subject to challenge
651	651	631pursuant to section 4 of said chapter 93A but not pursuant to sections 9 or 11 of said chapter
652	652	63293A. The commission shall notify the office of the attorney general of any provider or provider
653	653	633organization’s failure to modify the proposed material change to substantially address such
654	654	634impacts.
655	655	635 (b) In addition to the grounds for a cost and market impact review set forth in subsection
656	656	636(a), if the commission finds, based on the center’s benchmark cycle report under section 16 of
657	657	637chapter 12C, that the average of the annual percentage changes in total health care expenditures
658	658	638during each year of the benchmark cycle exceeded the health care cost growth benchmark for
659	659	639that benchmark cycle, the commission may conduct a cost and market impact review of any
660	660	640provider organization identified by the center under section 18 of said chapter 12C.
661	661	641 (c)(1) The commission shall initiate a cost and market impact review by sending the
662	662	642provider or provider organization notice of a cost and market impact review, which shall explain
663	663	643the basis for the review and the particular factors that the commission seeks to examine through
664	664	644the review. The provider or provider organization shall submit to the commission, within 21 days
665	665	645of the commission’s notice, a written response to the notice, including, but not limited to, any
666	666	646information or documents sought by the commission that are described in the commission’s
667	667	647notice. The commission may require that any provider, provider organization, payer, investor or
668	668	648other party associated with a given transaction submit documents and information in connection
669	669	649with a notice of material change or a cost and market impact review under this section. The
670	670	650commission may also require, for a period of 5 years following the completion of a material 32 of 119
671	671	651change, that any provider or provider organization submit data and information to assess the
672	672	652post-transaction impacts of a material change and compliance with any commitments or
673	673	653conditions agreed to by the parties. The commission shall keep confidential all nonpublic
674	674	654information and documents obtained under this section and shall not disclose the information or
675	675	655documents to any person without the consent of the provider or payer that produced the
676	676	656information or documents, except in a preliminary report or final report under this section if the
677	677	657commission believes that such disclosure should be made in the public interest after taking into
678	678	658account any privacy, trade secret or anti-competitive considerations. The confidential
679	679	659information and documents shall not be public records and shall be exempt from disclosure
680	680	660under clause Twenty-sixth of section 7 of chapter 4 or section 10 of chapter 66.
681	681	661 (2) For any material change involving significant new for-profit investment in,
682	682	662acquisitions of the assets of or ownership or direct or indirect control of a provider or provider
683	683	663organization by a for-profit entity, the for-profit entity, and the parent company or person or
684	684	664persons controlling the for-profit entity, if any, will be required to submit, at a minimum, the
685	685	665following information to complete the notice: (i) information regarding the capital structure,
686	686	666general financial condition, ownership and management of the for-profit entity and any person
687	687	667controlling the for-profit entity; (ii) the identity and relationship of every member of the for-
688	688	668profit entity; (iii) fully audited financial information for the preceding 5 fiscal years or for such
689	689	669lesser period as the for-profit entity and any predecessors thereof shall have been in existence;
690	690	670(iv) any plans or proposals to liquidate such provider or provider organization, to sell its assets or
691	691	671merge or consolidate it with any person, or to make any other material change in its business or
692	692	672corporate structure or management; (v) fully audited financial information of all health care
693	693	673entities acquired by the for-profit entity, the parent company and person or persons controlling 33 of 119
694	694	674the for-profit entity, for the preceding 5 fiscal years or for such lesser period as the for-profit
695	695	675entity and any predecessors thereof shall have been in existence as well as other financial
696	696	676information the commission deems relevant, including, but not limited to, bankruptcy filings,
697	697	677sales of non-clinical assets and dividend recapitalizations; (vi) operational information regarding
698	698	678health care entities acquired by the acquiring party or person or persons controlling the acquiring
699	699	679party for the preceding 10 fiscal years or for such lesser period as such acquiring party and any
700	700	680predecessors thereof shall have been in existence, including, but not limited to, reduction or
701	701	681closure of health care services; and (vii) such additional information as the commission may
702	702	682deem necessary or appropriate for the protection of essential health services or to evaluate the
703	703	683material change notice.
704	704	684 (d) A cost and market impact review may examine factors relating to the provider or
705	705	685provider organization’s business and its relative market position, including, but not limited to: (i)
706	706	686the provider or provider organization’s size and market share within its primary service areas by
707	707	687major service category and within its dispersed service areas; (ii) the provider or provider
708	708	688organization’s prices for services, including its relative price compared to other providers for the
709	709	689same services in the same market; (iii) the provider or provider organization’s health status
710	710	690adjusted total medical expense, including its health status adjusted total medical expense
711	711	691compared to similar providers; (iv) the quality of the services provided by the provider or
712	712	692provider organization, including patient experience; (v) provider cost and cost trends in
713	713	693comparison to total health care expenditures statewide; (vi) the availability and accessibility of
714	714	694services similar to those provided, or proposed to be provided, through the provider or provider
715	715	695organization within its primary service areas and dispersed service areas; (vii) the provider or
716	716	696provider organization’s impact on competing options for the delivery of health care services 34 of 119
717	717	697within its primary service areas and dispersed service areas, including, if applicable, the impact
718	718	698on existing service providers of a provider or provider organization’s expansion, affiliation,
719	719	699merger or acquisition, to enter a primary or dispersed service area in which it did not previously
720	720	700operate; (viii) the methods used by the provider or provider organization to attract patient volume
721	721	701and recruit or acquire health care professionals or facilities; (ix) the role of the provider or
722	722	702provider organization in serving at-risk, underserved and government payer patient populations,
723	723	703including individuals with behavioral, substance use disorder and mental health conditions,
724	724	704within its primary service areas and dispersed service areas; (x) the role of the provider or
725	725	705provider organization in providing low margin or negative margin services within its primary
726	726	706service areas and dispersed service areas; (xi) consumer concerns, including, but not limited to,
727	727	707complaints or other allegations that the provider or provider organization has engaged in any
728	728	708unfair method of competition or any unfair or deceptive act or practice; (xii) the cumulative
729	729	709impact of mergers, acquisitions, affiliations or joint ventures on the health care market over a
730	730	710reasonable period of time, as defined by the commission; (xiii) alignment with the state health
731	731	711plan and any focused assessments conducted pursuant to section 22; and (xiv) any other factors
732	732	712that the commission determines to be in the public interest.
733	733	713 (e) The commission shall make factual findings and issue a preliminary report on the cost
734	734	714and market impact review. In the report, the commission shall identify any provider or provider
735	735	715organization that meets all of the following: (i) the provider or provider organization has, or
736	736	716likely will have as a result of the proposed material change, a dominant market share for the
737	737	717services it provides; (ii) the provider or provider organization charges, or likely will charge as a
738	738	718result of the proposed material change, prices for services that are materially higher than the
739	739	719median prices charged by all other providers for the same services in the same market; and (iii) 35 of 119
740	740	720the provider or provider organization has, or likely will have as a result of the proposed material
741	741	721change, a health status adjusted total medical expense that is materially higher than the median
742	742	722total medical expense of comparable providers in the same area.
743	743	723 (f) Within 30 days after issuance of a preliminary report, the provider or provider
744	744	724organization may respond in writing to the findings in the report. The commission shall then
745	745	725issue its final report. The commission shall refer to the attorney general its report on any provider
746	746	726or provider organization that meets all 3 criteria under subsection (e). The commission shall
747	747	727issue its final report on the cost and market impact review within 185 days from the date that the
748	748	728provider or provider organization has submitted a completed notice to the commission under the
749	749	729commission’s regulations; provided, however, that the provider or provider organization has
750	750	730certified substantial compliance with the commission’s requests for data and information
751	751	731pursuant to subsection (c) within 21 days of the commission’s notice or by a later date set by
752	752	732mutual agreement of the provider or provider organization and the commission.
753	753	733 (g) Nothing in this section shall prohibit a proposed material change under subsection (a);
754	754	734provided, however, that any proposed material change shall not be completed: (i) until not later
755	755	735than 30 days after the commission has issued its final report; or (ii) if the attorney general brings
756	756	736an action as described in paragraph (2) of subsection (a) or subsection (h), while such action is
757	757	737pending and prior to a final judgment being issued by a court of competent jurisdiction,
758	758	738whichever is later.
759	759	739 (h) A provider or provider organization that meets the criteria in subsection (e) has
760	760	740engaged, or through a material change will engage, in an unfair method of competition or unfair
761	761	741and deceptive trade practice subject to challenge pursuant to section 4 of chapter 93A, but not 36 of 119
762	762	742sections 9 or 11 of said chapter 93A. The attorney general may take action under said chapter
763	763	74393A or any other law to protect consumers in the health care market, including by bringing an
764	764	744action seeking to restrain such violation of said chapter 93A. The commission’s final report may
765	765	745be evidence in any such action brought by the attorney general.
766	766	746 (i) Nothing in this section shall limit the authority of the attorney general to protect
767	767	747consumers in the health care market under any other law.
768	768	748 (j) The commission shall adopt regulations for conducting cost and market impact
769	769	749reviews and for administering this section. These regulations shall include definitions of material
770	770	750change and non-material change, primary service areas, dispersed service areas, dominant market
771	771	751share, materially higher prices, materially higher health status adjusted total medical expenses
772	772	752and any other terms as necessary to provide market participants with appropriate notice. These
773	773	753regulations may identify filing thresholds in connection with this section; provided, however,
774	774	754that the commission shall determine that multiple mergers, acquisitions or affiliations over time
775	775	755may together meet such thresholds. All regulations promulgated by the commission shall comply
776	776	756with chapter 30A.
777	777	757 (k) Nothing in this section shall limit the application of other laws or regulations that may
778	778	758be applicable to a provider or provider organization, including laws and regulations governing
779	779	759insurance.
780	780	760 (l) Upon issuance of its final report pursuant to subsection (f), the commission shall
781	781	761provide a copy of said final report to the department of public health. The final report shall be
782	782	762included in the written record and considered by the department of public health during its
783	783	763review of an application for determination of need under section 25C of chapter 111 and 37 of 119
784	784	764considered where relevant in connection with licensure or other regulatory actions involving the
785	785	765provider or provider organization.
786	786	766 SECTION 32. Said chapter 6D is hereby further amended by adding the following 2
787	787	767sections:-
788	788	768 Section 22. (a)(1) Not less than once every 5 years, the commission shall develop a state
789	789	769health plan in consultation with the executive office of health and human services, the
790	790	770department of public health, the office of Medicaid, the department of mental health, the division
791	791	771of insurance, the executive office of elder affairs, the center for health information and analysis
792	792	772and other state agencies as appropriate.
793	793	773 (2) The state health plan shall identify: (i) the current and anticipated needs of the
794	794	774commonwealth for health care services, providers, programs and facilities; (ii) the existing health
795	795	775care resources available to meet those needs; (iii) recommendations for the appropriate supply
796	796	776and distribution of resources, workforce, programs, capacities, technologies and services on a
797	797	777statewide and regional basis; (iv) major barriers preventing communities and residents from
798	798	778accessing needed health care; (v) priorities for addressing those barriers; and (vi)
799	799	779recommendations for any further legislative or other state action to assist the commonwealth in
800	800	780achieving the recommendations identified in the plan.
801	801	781 (3) The state health plan shall be based on data from all available sources, including data
802	802	782collected by the commission, the center for health information and analysis, the executive office
803	803	783of health and human services, the department of public health, the office of Medicaid, the
804	804	784department of mental health, the division of insurance, the executive office of elder affairs, the
805	805	785board of registration in medicine, the bureau of health professions licensure, the office of the 38 of 119
806	806	786attorney general and other state agencies as appropriate. All such agencies shall provide data and
807	807	787information necessary for the commission to create the plan.
808	808	788 (4) The state health plan shall include recommendations across a range of health care
809	809	789services, including, but not limited to: (i) acute care; (ii) non-acute care; (iii) specialty care,
810	810	790including, but not limited to, burn, coronary care, cancer care, neonatal care, post-obstetric and
811	811	791post-operative recovery care, pulmonary care, renal dialysis and surgical, including trauma and
812	812	792intensive care units; (iv) skilled nursing facilities; (v) assisted living facilities; (vi) long-term care
813	813	793facilities; (vii) ambulatory surgical centers; (viii) office-based surgical centers; (ix) urgent care
814	814	794centers; (x) home health; (xi) adult and pediatric behavioral health and mental health services
815	815	795and supports; (xii) substance use disorder treatment and recovery services; (xiii) emergency care;
816	816	796(xiv) ambulatory care services; (xv) primary care resources; (xvi) pediatric care services; (xvii)
817	817	797pharmacy and pharmacological services; (xviii) family planning services; (xix) obstetrics and
818	818	798gynecology and maternal health services; (xx) allied health services, including, but not limited
819	819	799to, optometric care, chiropractic services, oral health care and midwifery services; (xxi) federally
820	820	800qualified health centers and free clinics; (xxii) technologies or equipment defined as innovative
821	821	801services or new technologies by the department of public health pursuant to section 25B of
822	822	802chapter 111; (xxiii) hospice and palliative care service; (xxiv) health screening and early
823	823	803intervention services; and (xxv) any other service or resource identified by the commission.
824	824	804 (5) The goal of the state health plan shall be to promote the appropriate and equitable
825	825	805distribution of health care resources across geographic regions of the commonwealth based on
826	826	806the needs of the population on a statewide basis and the needs of particular geographic and
827	827	807demographic groups. The state health plan shall seek to support the commonwealth's goals of: (i)
828	828	808maintaining and improving the quality of and access to health care services; (ii) ensuring a stable 39 of 119
829	829	809and adequate health care workforce; (iii) meeting the health care cost growth benchmark
830	830	810established pursuant to section 9; (iv) supporting innovative health care delivery and alternative
831	831	811payment models as identified by the commission; (v) reducing unnecessary duplication of health
832	832	812care resources; (vi) advancing health equity and addressing disparities in the health care system
833	833	813based on the needs of particular demographic factors, including, but not limited to, race,
834	834	814ethnicity, immigration status, sexual orientation, gender identity, geographic location, age,
835	835	815language spoken, ability and socioeconomic status; (vii) integrating oral health, mental health,
836	836	816behavioral and substance use disorder treatment services with overall medical care; (viii)
837	837	817aligning housing, health care and home care to improve overall health outcomes and reduce
838	838	818costs; (ix) tracking trends in utilization and promoting the best standards of care; and (x)
839	839	819ensuring equitable access to health care resources across geographic regions of the
840	840	820commonwealth.
841	841	821 (6) The commission shall consult with the advisory council established pursuant to
842	842	822section 4 in the development of the state health plan.
843	843	823 (7) In developing the state health plan, the commission, in consultation with the
844	844	824department of public health, shall conduct at least 1 public hearing seeking input on the state
845	845	825health plan and shall give interested persons an opportunity to submit their views orally and in
846	846	826writing. In addition, the commission may create and maintain a website to allow members of the
847	847	827public to submit comments electronically and review comments submitted by others.
848	848	828 (8) The commission may require the submission of data and documents from providers,
849	849	829provider organizations and payers to support creation of the state health plan; provided, that the
850	850	830information is not already required to be reported to another state agency and accessible to the 40 of 119
851	851	831commission. Nonpublic clinical, financial, strategic or operational documents or information
852	852	832provided to the commission in connection with this section shall be subject to section 2A.
853	853	833 (b)(1) In addition to the state health plan, the commission shall conduct regular, focused
854	854	834assessments of provider supply and distribution in relation to projected need in at least 1 specific
855	855	835service line. Each assessment shall be conducted in consultation with other state agencies as
856	856	836appropriate, including, but not limited to, the executive office of health and human services, the
857	857	837department of public health, the department of mental health, the office of Medicaid, the division
858	858	838of insurance, the center for health information and analysis, the executive office of elder affairs,
859	859	839the board of registration in medicine, the bureau of health professions licensure and the office of
860	860	840the attorney general. All such agencies shall provide data and information necessary for the
861	861	841commission to conduct the assessment. The commission shall consider available state and
862	862	842national data and academic research on health service supply and need and relevant community
863	863	843health needs assessments by non-profit hospitals and other organizations and other individual
864	864	844and community statements of need.
865	865	845 (2) Each focused assessment shall examine at least 1 specific service line and at least 1
866	866	846relevant region and may examine other factors in the public interest, such as populations served,
867	867	847as appropriate. The service lines and regions shall be identified and prioritized for assessment by
868	868	848the commission in consultation with the above-referenced agencies, as consistent with available
869	869	849resources. In prioritizing service lines and regions, the commission may consider factors
870	870	850including, but not limited to: (i) services with limited alternatives or substitutions; (ii) services
871	871	851where supply has been shown to be misaligned with need nationally or in academic research; (iii)
872	872	852services or regions undergoing significant changes in ownership, supply, or distribution; (iv)
873	873	853services or regions with evidence of access challenges or barriers, particularly for vulnerable 41 of 119
874	874	854populations; (v) input from the advisory council established pursuant to section 4; and (vi)
875	875	855requests for analysis from the executive office of health and human services or other agencies;
876	876	856provided, that prioritized service lines under this paragraph shall include primary care and
877	877	857behavioral health.
878	878	858 (3) Each assessment may include findings that include, but are not limited to: (i) the
879	879	859extent to which supply of a given service line aligns with projected need at the statewide or
880	880	860regional level; (ii) health system factors driving any documented health disparities; (iii) services
881	881	861or providers, including in a specific geographic area, that are critical to the proper functioning of
882	882	862the health care system; (iv) estimates of where and how many additional units of service would
883	883	863be needed in the state or in a specific geographic area to meet projected need; (v) identification
884	884	864of barriers impacting accessibility of available supply by specific populations; and (vi) policy
885	885	865recommendations to address the drivers of disparities, access barriers and areas of misalignment
886	886	866of need and supply.
887	887	867 (4) The commission shall consult with the advisory council established pursuant to
888	888	868section 4 in the development of such focused assessments.
889	889	869 (5) The commission, in consultation with the department of public health, shall conduct
890	890	870at least 1 public hearing seeking input on each focused assessment and shall give interested
891	891	871persons an opportunity to submit testimony orally and in writing.
892	892	872 (6) The commission may require the submission of data and documents from payers,
893	893	873providers or provider organizations that offer a service that is the subject of an assessment
894	894	874conducted under this section; provided, that the information is not already reported to another
895	895	875state agency and made accessible to the commission. Nonpublic clinical, financial, strategic or 42 of 119
896	896	876operational documents or information provided to the commission in connection with this section
897	897	877shall be subject to section 2A.
898	898	878 (c) The commission shall publish analyses, reports and interpretations of information
899	899	879collected pursuant to this section to promote awareness of the distribution and nature of health
900	900	880care resources in the commonwealth.
901	901	881 (d) Biennially, not later than January 1, the commission shall file a report with the joint
902	902	882committee on health care financing , which shall include, but not be limited to: (i) a summary of
903	903	883the current state health plan and a description of focused assessments conducted during the past 2
904	904	884years; (ii) a summary of actions taken by the commission and progress made toward developing
905	905	885the state health plan and focused assessments during the past 2 years; and (iii) recommendations
906	906	886for further legislative action to assist the commission in its implementation of this section.
907	907	887 Section 23. (a) A provider or a provider organization in which a private equity firm has a
908	908	888financial interest shall not: (i) meet or exceed the maximum adjusted debt to adjusted EBITDA
909	909	889ratio; (ii) otherwise become highly leveraged, as determined by the commission; (iii) transact
910	910	890with an unsafe financial actor; (iv) for the period during which the private equity firm has a
911	911	891financial interest in the provider or provider organization, (A) provide capital distributions,
912	912	892including, but not limited, to cash dividends, stock dividends that are not strictly dilutive or any
913	913	893other similar distributions, (B) perform stock buybacks, stock redemptions or similar transactions
914	914	894or (C) pay to a private equity firm management fees or similar fees or costs; or (v) perform any
915	915	895other action or exceed any other metric the commission determines may cause a provider or
916	916	896provider organization to become financially distressed. 43 of 119
917	917	897 (b) Within 30 days of the commission receiving a referral from the center pursuant to
918	918	898paragraph (4) of subsection (e) of section 9 of chapter 12C or the commission becoming aware of
919	919	899a potential violation of subsection (a) pursuant to the filing of a completed notice of material
920	920	900change under section 13, the commission shall make a determination of whether there has been a
921	921	901violation. If the commission determines a violation has occurred, the commission shall require
922	922	902the provider to come into compliance with said subsection (a) and may set conditions that the
923	923	903provider or provider organization shall follow to come into compliance. The commission shall
924	924	904notify the provider or provider organization in writing of its determination, conditions, if any,
925	925	905and reasoning. The provider or provider organization shall have not less than 30 days to respond
926	926	906in writing and 10 days to request a hearing from the date of notification. If a hearing is requested,
927	927	907the hearing shall be held within 30 days of the commission’s receipt of the request. Within 10
928	928	908days of receiving written comments or holding any requested hearing, whichever is later, the
929	929	909commission shall notify the provider or provider organization in writing that the provider or
930	930	910provider organization is required to come into compliance with section (a) and which conditions,
931	931	911if any, shall go into effect. Upon providing notice, such requirements and conditions, if any, shall
932	932	912go into effect.
933	933	913 In making the determinations pursuant to subsection (a), the commission may consider all
934	934	914publicly available data and documents, including information submitted to the commission and
935	935	915the center under any authority. The commission may also solicit additional non-public
936	936	916information from providers to the extent necessary to achieve the purposes of this section. The
937	937	917commission shall keep confidential all nonpublic information and documents obtained under this
938	938	918section, and such information shall not be public records and shall be exempt from disclosure
939	939	919under clause Twenty-sixth of section 7 of chapter 4 or section 10 of chapter 66. 44 of 119
940	940	920 (c)(1) Within 3 months, or a shorter reasonable time as determined by the commission,
941	941	921the commission shall determine whether the provider or provider organization has substantially
942	942	922complied with its conditions or if no conditions were set, whether the provider or provider
943	943	923organization has come into compliance with subsection (a). The commission shall notify the
944	944	924provider or provider organization of its determination and reasoning, and the provider or
945	945	925provider organization shall have not less than 30 days to respond in writing and 10 days to
946	946	926request a hearing from the date of notification. If a hearing is requested, the hearing shall be held
947	947	927within 30 days of the commission’s receipt of the request. Within 10 days of receiving written
948	948	928comments and holding any requested hearing, whichever is later, the commission shall make a
949	949	929final determination and notify the provider or provider organization of the determination in
950	950	930writing.
951	951	931 (2) If the commission makes a final determination that the provider or provider
952	952	932organization has failed to substantially implement the commission’s conditions, or, if no
953	953	933conditions were set, to come in compliance with subsection (a), the department of public health
954	954	934may collect the bond deposited. The commission shall notify the department of public health of
955	955	935its determination and refer the provider or provider organization to the attorney general.
956	956	936 (3) Failure to substantially implement the commission’s conditions, or, if no conditions
957	957	937are set, failure to come in compliance with subsection (a) shall constitute a violation of said
958	958	938chapter 93A. Only the attorney general, or an organization representing workers who: (i) worked
959	959	939for the provider or provider organization; (ii) worked in the provider or provider organization’s
960	960	940facilities, if any; or (iii) contracted with the provider or provider organization, may bring an
961	961	941action under chapter 93A for such a violation. The commission’s final determination may be
962	962	942used as prima facie evidence of a violation of said chapter 93A. 45 of 119
963	963	943 (d) A private equity firm shall deposit, upon submission of a notice of material change
964	964	944pursuant to section 13 of chapter 6D, a bond with the department of public health ensuring that
965	965	945the provisions of subsection (a) shall not be violated; provided, however, that the private equity
966	966	946firm shall not use any of the provider or provider organization’s assets or property as security for
967	967	947the bond, pay for the bond by placing debt on the provider or provider organization or otherwise
968	968	948permit the provider or provider organization to pay the bond on the private equity firm’s behalf
969	969	949or allow the provider or provider organization to be liable for the bond.
970	970	950 SECTION 33. Section 5A of chapter 12 of the General Laws, as so appearing, is hereby
971	971	951amended by striking out, in line 26, the words “or ‘knowingly’” and inserting in place thereof the
972	972	952following words:- , “knowingly” or “knows”.
973	973	953 SECTION 34. Said section 5A of said chapter 12, as so appearing, is hereby further
974	974	954amended by inserting after the definition of “Overpayment” the following definition:-
975	975	955 “Ownership or investment interest”, any: (1) direct or indirect possession of equity in the
976	976	956capital, stock or profits totaling more than 10 per cent of an entity; (2) interest held by an
977	977	957investor or group of investors who engages in the raising or returning of capital and who invests,
978	978	958develops or disposes of specified assets; (3) interest held by a pool of funds by investors,
979	979	959including a pool of funds managed or controlled by private limited partnerships, if those
980	980	960investors or the management of that pool or private limited partnership employ investment
981	981	961strategies of any kind to earn a return on that pool of funds; or (4) interest held by a real estate
982	982	962investment trust.
983	983	963 SECTION 35. Section 5B of said chapter 12, as so appearing, is hereby amended by
984	984	964striking out, in line 29, the word “or”, the second time it appears. 46 of 119
985	985	965 SECTION 36. Said section 5B of said chapter 12, as so appearing, is hereby further
986	986	966amended by inserting after the word “applicable”, in lines 38 and 39, the following words:- ; or
987	987	967(11) has an ownership or investment interest in any person who violates clauses (1) to (10),
988	988	968inclusive, knows about the violation, and fails to disclose the violation to the commonwealth or a
989	989	969political subdivision thereof within 60 days of identifying the violation.
990	990	970 SECTION 37. Section 11N of said chapter 12, as so appearing, is hereby amended by
991	991	971striking out, in line 7, the words “or provider organization” and inserting in place thereof the
992	992	972following words:- , provider organization, private equity firm, real estate investment trust,
993	993	973management services organization, pharmaceutical manufacturing company and pharmacy
994	994	974benefit manager.
995	995	975 SECTION 38. Said section 11N of said chapter 12, as so appearing, is hereby further
996	996	976amended by striking out subsection (b) and inserting in place thereof the following subsection:-
997	997	977 (b) The attorney general may investigate any provider organization referred to the
998	998	978attorney general by the health policy commission under chapter 6D to determine whether the
999	999	979provider organization engaged in unfair methods of competition or anti-competitive behavior in
1000	1000	980violation of chapter 93A or any other law, and, if appropriate, take action under said chapter 93A
1001	1001	981or any other law to protect consumers in the health care market, including, but not limited to, an
1002	1002	982action for injunctive relief.
1003	1003	983 SECTION 39. Section 1 of chapter 12C of the General Laws, as so appearing, is hereby
1004	1004	984amended by inserting after the definition of “Ambulatory surgical center services” the following
1005	1005	985definition:- 47 of 119
1006	1006	986 “Benchmark cycle”, a period of 2 consecutive calendar years during which the projected
1007	1007	987annualized growth rate in total health care expenditures in the commonwealth is calculated
1008	1008	988pursuant to section 9 of chapter 6D and monitored pursuant to section 10 of said chapter 6D.
1009	1009	989 SECTION 40. Said section 1 of said chapter 12C, as so appearing, is hereby further
1010	1010	990amended by inserting after the definition of “Fee-for-service” the following definition:-
1011	1011	991 “Financial interest”, when a private equity firm or its corporate affiliate has a direct or
1012	1012	992indirect ownership share of, or controlling interest in, or is a holder of significant debt from a
1013	1013	993provider or provider organization or the provider or provider organization’s corporate affiliates
1014	1014	994 SECTION 41. Said section 1 of said chapter 12C, as so appearing, is hereby further
1015	1015	995amended by striking out the definition of “Health care cost growth benchmark” and inserting in
1016	1016	996place thereof the following 2 definitions:-
1017	1017	997 “Health care cost growth benchmark”, the projected annualized growth rate in total health
1018	1018	998care expenditures in the commonwealth during a benchmark cycle as established in section 9 of
1019	1019	999chapter 6D.
1020	1020	1000 “Health care entity”, as defined in section 1 of chapter 6D.
1021	1021	1001 SECTION 42. Said section 1 of said chapter 12C, as so appearing, is hereby further
1022	1022	1002amended by inserting after the definition of “Health care services” the following 2 definitions:-
1023	1023	1003 “Health disparities”, preventable differences in the burden of disease, injury, violence or
1024	1024	1004opportunities to achieve optimal health that are experienced by socially disadvantaged
1025	1025	1005populations. 48 of 119
1026	1026	1006 “Health equity”, the state in which a health system offers the infrastructure, facilities,
1027	1027	1007services, geographic coverage, affordability and all other relevant features, conditions and
1028	1028	1008capabilities that will provide all people with the opportunity and reasonable expectation that they
1029	1029	1009can reach their full health potential and well-being and are not disadvantaged in access to health
1030	1030	1010care by their race, ethnicity, language, disability, age, gender, gender identity, sexual orientation,
1031	1031	1011social class, intersections among these communities or identities or their socially determined
1032	1032	1012circumstances.
1033	1033	1013 SECTION 43. Said section 1 of said chapter 12C, as so appearing, is hereby further
1034	1034	1014amended by inserting after the definition of “Major service category” the following 2
1035	1035	1015definitions:-
1036	1036	1016 “Management services organization”, a business that provides management or
1037	1037	1017administrative services to a provider or provider organization for compensation. “Maximum
1038	1038	1018adjusted debt to adjusted EBITDA ratio”, the highest ratio of total adjusted debt to adjusted
1039	1039	1019earnings before interest, taxes, depreciation and amortization the commission determines that a
1040	1040	1020provider or provider organization can have without becoming financially unstable; provided
1041	1041	1021further, that the commission, in consultation with the center, shall establish a standard method of
1042	1042	1022calculating and reporting total adjusted debt and adjusted earnings before interest, taxes,
1043	1043	1023depreciation and amortization; and provided further, that the methodology and reporting shall
1044	1044	1024include capitalized lease obligations.
1045	1045	1025 SECTION 44. Said section 1 of said chapter 12C, as so appearing, is hereby further
1046	1046	1026amended by inserting after the definition of “Patient-centered medical home” the following 3
1047	1047	1027definitions:- 49 of 119
1048	1048	1028 “Payer”, any entity, other than an individual, that pays providers for the provision of
1049	1049	1029health care services; provided, that “payer” shall include both governmental and private entities;
1050	1050	1030provided further, that “payer” shall include self-insured plans to the extent allowed under the
1051	1051	1031federal Employee Retirement Income Security Act of 1974.
1052	1052	1032 “Pharmaceutical manufacturing company”, an entity engaged in the: (i) production,
1053	1053	1033preparation, propagation, compounding, conversion or processing of prescription drugs, directly
1054	1054	1034or indirectly, by extraction from substances of natural origin, independently by means of
1055	1055	1035chemical synthesis or by a combination of extraction and chemical synthesis; or (ii) packaging,
1056	1056	1036repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
1057	1057	1037“pharmaceutical manufacturing company” shall not include a wholesale drug distributor licensed
1058	1058	1038under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said
1059	1059	1039chapter 112.
1060	1060	1040 “Pharmacy benefit manager”, a person, business or other entity, however organized, that,
1061	1061	1041directly or through a subsidiary, provides pharmacy benefit management services for prescription
1062	1062	1042drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self-
1063	1063	1043insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit
1064	1064	1044management services shall include, but not be limited to: (i) the processing and payment of
1065	1065	1045claims for prescription drugs; (ii) the performance of drug utilization review; (iii) the processing
1066	1066	1046of drug prior authorization requests; (iv) pharmacy contracting; (v) the adjudication of appeals or
1067	1067	1047grievances related to prescription drug coverage contracts; (vi) formulary administration; (vii)
1068	1068	1048drug benefit design; (viii) mail and specialty drug pharmacy services; (ix) cost containment; (x)
1069	1069	1049clinical, safety and adherence programs for pharmacy services; and (xi) managing the cost of
1070	1070	1050covered prescription drugs; provided further, that “pharmacy benefit manager” shall include a 50 of 119
1071	1071	1051health benefit plan sponsor that does not contract with a pharmacy benefit manager and manages
1072	1072	1052its own prescription drug benefits unless specifically exempted by the commission.
1073	1073	1053 SECTION 45. Said section 1 of said chapter 12C, as so appearing, is hereby further
1074	1074	1054amended by inserting after the definition of “Primary service area” the following definition:-
1075	1075	1055 “Private equity firm”, a publicly traded or non-publicly traded company that collects
1076	1076	1056capital investments from individuals or entities and purchases, as a parent company or through
1077	1077	1057another entity that it completely or partially owns or controls, a direct or indirect ownership share
1078	1078	1058of or controlling interest in, or otherwise obtains a financial interest in, a provider, provider
1079	1079	1059organization or management services organization; provided, however, that “private equity firm”
1080	1080	1060shall not include venture capital firms exclusively funding startups or other early-stage
1081	1081	1061businesses.
1082	1082	1062 SECTION 46. Said section 1 of said chapter 12C, as so appearing, is hereby further
1083	1083	1063amended by striking out the definition of “Provider organization” and inserting in place thereof
1084	1084	1064the following definition:-
1085	1085	1065 “Provider organization”, any corporation, partnership, business trust, association or
1086	1086	1066organized group of persons, which is in the business of health care delivery or management,
1087	1087	1067whether incorporated or not, that represents at least 1 health care providers in contracting with
1088	1088	1068carriers, third party administrators or public payers for the payments of health care services;
1089	1089	1069provided, that ''provider organization'' shall include, but not be limited to, physician
1090	1090	1070organizations, physician-hospital organizations, independent practice associations, provider
1091	1091	1071networks, accountable care organizations, management services organizations, providers that are
1092	1092	1072owned or controlled, fully or partially, by for-profit entities, including, but not limited to, private 51 of 119
1093	1093	1073equity firms, and any other organization that contracts with carriers, third party administrators or
1094	1094	1074public payers for payment for health care services; and provided, further that “provider
1095	1095	1075organization” shall not include any integrated care network that is owned and directed by a long-
1096	1096	1076term care providers.
1097	1097	1077 SECTION 47. Said section 1 of said chapter 12C, as so appearing, is hereby further
1098	1098	1078amended by inserting after the definition of “Quality measures” the following definition:-
1099	1099	1079 “Real estate investment trust”, a real estate investment trust as defined in 26 U.S.C. 856.
1100	1100	1080 SECTION 48. Said section 1 of said chapter 12C, as so appearing, is hereby further
1101	1101	1081amended by inserting after the definition of “Total health care expenditures” the following 2
1102	1102	1082definitions:-
1103	1103	1083 “Total medical expenses”, the total cost of care for the patient population associated with
1104	1104	1084a provider organization based on allowed claims for all categories of medical expenses and all
1105	1105	1085non-claims related payments to providers.
1106	1106	1086 “Unsafe financial actor”, a private equity firm or real estate investment trust that had a
1107	1107	1087financial interest in a provider or provider organization closing, declaring bankruptcy or
1108	1108	1088otherwise discontinuing its operations within 15 years of the private equity firm or real estate
1109	1109	1089investment trust’s financial interest in the provider or provider organization.
1110	1110	1090 SECTION 49. Section 2A of said chapter 12C, as so appearing, is hereby amended by
1111	1111	1091inserting after the word “cybersecurity”, in line 9, the following words:- and 1 of whom shall
1112	1112	1092have experience in health equity advocacy. 52 of 119
1113	1113	1093 SECTION 50. Section 3 of said chapter 12C, as so appearing, is hereby amended by
1114	1114	1094striking out, in line 11, the word “benchmark” and inserting in place thereof the following
1115	1115	1095words:- and affordability benchmarks.
1116	1116	1096 SECTION 51. Said section 3 of said chapter 12C, as so appearing, is hereby further
1117	1117	1097amended by striking out, in line 12, the words “section 9” and inserting in place thereof the
1118	1118	1098following words:- sections 9 and 9A.
1119	1119	1099 SECTION 52. The first paragraph of section 7 of said chapter 12C, as so appearing, is
1120	1120	1100hereby amended by adding the following sentence:-
1121	1121	1101 Each pharmaceutical manufacturing company and pharmacy benefit manager shall pay to
1122	1122	1102the commonwealth an amount for the estimated expenses of the center and for the other purposes
1123	1123	1103described in this chapter.
1124	1124	1104 SECTION 53. Said section 7 of said chapter 12C, as so appearing, is hereby further
1125	1125	1105amended by striking out, in lines 8 and 42, the figure “33” and inserting in place thereof, in each
1126	1126	1106instance, the following figure:- “25”.
1127	1127	1107 SECTION 54. Said section 7 of said chapter 12C, as so appearing, is hereby further
1128	1128	1108amended by adding following 3 paragraphs:- To the maximum extent under federal law,
1129	1129	1109provided that such assessment shall not result in any reduction of federal financial participation
1130	1130	1110in Medicaid, the assessed amount for pharmaceutical manufacturing companies shall be not less
1131	1131	1111than 25 per cent of the amount appropriated by the general court for the expenses of the center
1132	1132	1112minus amounts collected from: (i) filing fees; (ii) fees and charges generated by the center's
1133	1133	1113publication or dissemination of reports and information; and (iii) federal matching revenues
1134	1134	1114received for these expenses or received retroactively for expenses of predecessor agencies. 53 of 119
1135	1135	1115Pharmaceutical manufacturing companies shall pay such assessed amount multiplied by the ratio
1136	1136	1116of the pharmaceutical manufacturing company’s gross sales of outpatient prescription drugs
1137	1137	1117dispensed in the commonwealth or similar measure determined by the center consistent with
1138	1138	1118applicable federal requirements.
1139	1139	1119 To fund the operations of the licensure of pharmacy benefit managers to the maximum
1140	1140	1120extent allowed by federal law and to the extent that the assessment will not result in any
1141	1141	1121reduction of federal financial participation in Medicaid, the assessed amount for pharmacy
1142	1142	1122benefit managers shall be not less than 25 per cent of the amount appropriated by the general
1143	1143	1123court for the expenses of the center minus amounts collected from: (i) filing fees; (ii) fees and
1144	1144	1124charges generated by the center's publication or dissemination of reports and information; and
1145	1145	1125(iii) federal matching revenues received for these expenses or received retroactively for expenses
1146	1146	1126of predecessor agencies. Pharmacy benefit managers shall pay such assessed amount multiplied
1147	1147	1127by the ratio of the pharmacy benefit manager’s gross revenue related to outpatient prescription
1148	1148	1128drugs dispensed in the commonwealth or similar measure determined by the center consistent
1149	1149	1129with applicable federal requirements. In no event may this assessment, when combined with the
1150	1150	1130assessment of pharmacy benefit managers in section 6 of chapter 6D and the pharmacy benefit
1151	1151	1131manager licensing fee in section 2 of chapter 176Y, exceed the commonwealth’s estimated
1152	1152	1132expense in operating the pharmacy benefit manager licensure program. Each pharmaceutical
1153	1153	1133manufacturing company and each pharmacy benefit manager shall make a preliminary payment
1154	1154	1134to the center on October 1 of each year in an amount equal to 1/2 of the initial year’s and,
1155	1155	1135subsequently, the previous year's total assessment. Thereafter, each pharmaceutical
1156	1156	1136manufacturing company and each pharmacy benefit manager shall pay, within 30 days’ notice 54 of 119
1157	1157	1137from the center, the balance of the total assessment for the current year as determined by the
1158	1158	1138center.
1159	1159	1139 SECTION 55. Section 8 of said chapter 12C, as so appearing, is hereby amended by
1160	1160	1140inserting after the word “entities”, in line 5, the following words:- , including, but not limited to,
1161	1161	1141private equity firms, real estate investment trusts and management services organizations.
1162	1162	1142 SECTION 56. Said section 8 of said chapter 12C, as so appearing, is hereby further
1163	1163	1143amended by inserting after the word “statements”, in line 23, the following words:- , including
1164	1164	1144the audited financial statements of the parent organization’s out-of-state operations, private
1165	1165	1145equity firms, real estate investment trusts and management services organizations,.
1166	1166	1146 SECTION 57. Said section 8 of said chapter 12C, as so appearing, is hereby further
1167	1167	1147amended by striking out, in line 49, the words “and (6)” and inserting in place thereof the
1168	1168	1148following words:- (6) investments; and (7) information on any relationships with private equity
1169	1169	1149firms, real estate investment trusts and management services organizations; and (8).
1170	1170	1150 SECTION 58. Said chapter 12C is hereby further amended by striking out section 9, as so
1171	1171	1151appearing, and inserting in place thereof the following section:-
1172	1172	1152 Section 9. (a) The center, in consultation with the commission, shall promulgate
1173	1173	1153regulations to require that provider organizations registered under section 11 of chapter 6D
1174	1174	1154annually report the data as the center considers necessary to better protect the public interest in
1175	1175	1155monitoring the financial conditions, organizational structure, business practices, clinical services
1176	1176	1156and market share of each registered provider organization. The center may assess administrative
1177	1177	1157fees on provider organizations in an amount to help defray the center's costs in complying with 55 of 119
1178	1178	1158this section. The center may specify in regulations uniform reporting standards and reporting
1179	1179	1159thresholds as it determines necessary.
1180	1180	1160 (b) The center shall require registered provider organizations to report information
1181	1181	1161necessary to achieve the goals described in subsection (a), which may include, but shall not be
1182	1182	1162limited to: (i) organizational charts showing the ownership, governance and operational structure
1183	1183	1163of the provider organization, including any clinical affiliations and community advisory boards;
1184	1184	1164(ii) the number of affiliated health care professional full-time equivalents by license type,
1185	1185	1165specialty, name and address of practice locations and whether the professional is employed by
1186	1186	1166the organization; (iii) the name and address of licensed facilities by license number, license type
1187	1187	1167and capacity in each major service category; (iv) the name, address and capacity of all other
1188	1188	1168locations where the provider organization, or any of its affiliates, delivers health care services,
1189	1189	1169including those services listed in paragraph (4) of subsection (a) of section 22 of chapter 6D; (v)
1190	1190	1170counts and capacity estimates of health care equipment as defined by the center, including
1191	1191	1171imaging equipment; (vi) a comprehensive financial statement, including information on parent
1192	1192	1172entities, including their out-of-state operations, and corporate affiliates, including private equity
1193	1193	1173firms, real estate investment trusts and management services organizations, as applicable, and
1194	1194	1174including details regarding annual costs, annual receipts, realized capital gains and losses,
1195	1195	1175accumulated surplus and accumulated reserves; (vii) information on stop-loss insurance and any
1196	1196	1176non-fee-for-service payment arrangements; (viii) information on clinical quality, care
1197	1197	1177coordination and patient referral practices; (ix) information regarding expenditures and funding
1198	1198	1178sources for payroll, teaching, research, advertising, taxes or payments-in-lieu-of-taxes and other
1199	1199	1179non-clinical functions; (x) information regarding charitable care and community benefit
1200	1200	1180programs; (xi) for any risk-bearing provider organization, a certificate from the division of 56 of 119
1201	1201	1181insurance under chapter 176U; (xii) information regarding other assets and liabilities that may
1202	1202	1182affect the financial condition of the provider organization or the provider organization’s
1203	1203	1183facilities, including, but not limited to, real estate sale-leaseback arrangements with real estate
1204	1204	1184investment trusts; and (xiii) such other information as the center considers appropriate as set
1205	1205	1185forth in the center's regulations; provided, however, that the center shall coordinate with the
1206	1206	1186commission and the division of insurance to obtain information directly from the commission;
1207	1207	1187provided further, that the center shall consider the administrative burden of reporting when
1208	1208	1188developing reporting requirements. The center may, in consultation with the division of
1209	1209	1189insurance and the commission, merge similar reporting requirements where appropriate. The
1210	1210	1190center, in its discretion, may specify additional data elements in a given reporting year to support
1211	1211	1191the development of the state health plan or the focused assessments defined in said section 22 of
1212	1212	1192said chapter 6D.
1213	1213	1193 (c) Annual reporting shall be in a form provided by the center. The center shall
1214	1214	1194promulgate regulations that define criteria for waivers from certain annual reporting
1215	1215	1195requirements under this section. Criteria for waivers may include operational size of the provider
1216	1216	1196organization, the provider organization's annual net patient service revenue, the degree of risk
1217	1217	1197assumed by the provider organization and other criteria as the center considers appropriate.
1218	1218	1198 (d) Notwithstanding the annual reporting requirements under this section, the center may
1219	1219	1199require in writing, at any time, additional information that is reasonable and necessary to
1220	1220	1200determine the financial condition, organizational structure, business practices, clinical services or
1221	1221	1201market share of a registered provider organization. 57 of 119
1222	1222	1202 (e) The center shall develop and maintain an inventory of health care resources on its
1223	1223	1203website in a form usable by the public; provided, that the extracts must include information on
1224	1224	1204the geographic distribution of clinicians, facilities, equipment or any other health care resources.
1225	1225	1205Such inventory shall be derived from all available data, including, but not limited to, data
1226	1226	1206collected under this section and data collected by other state agencies. Agencies that license,
1227	1227	1207register, regulate or otherwise collect cost, quality or other data concerning health care resources
1228	1228	1208shall provide the center and the commission such data and information necessary to develop and
1229	1229	1209maintain the inventory required by this this section.
1230	1230	1210 (f) The center may enter into interagency agreements with the commission and other state
1231	1231	1211agencies to effectuate the goals of this section.
1232	1232	1212 (g)(1) The center shall also collect and analyze such data as it considers necessary to
1233	1233	1213protect the public interest in monitoring financial conditions of registered provider organizations
1234	1234	1214and compliance with subsection (a) of section 23 of chapter 6D by registered provider
1235	1235	1215organizations with private equity investment. To effectuate this subsection, the center may: (i)
1236	1236	1216modify uniform reporting requirements; (ii) require registered provider organizations with
1237	1237	1217private equity investment to report required information quarterly; (iii) require relevant
1238	1238	1218information from private equity firms and their affiliates; and (iv) communicate confidentially
1239	1239	1219with registered provider organizations as the center deems necessary.
1240	1240	1220 (2) The information shall be analyzed on an industry-wide and provider-specific basis
1241	1241	1221and shall include, but not be limited to: (i) gross and net patient service revenues; (ii) sources of
1242	1242	1222revenue; (iii) total payroll as a per cent of operating expenses and the salary and benefits of the 58 of 119
1243	1243	1223top 10 highest compensated employees, identified by position description and specialty; and (iv)
1244	1244	1224other relevant measures of financial health or distress.
1245	1245	1225 (3) The center shall publish annual reports and establish a continuing program of
1246	1246	1226investigation and study of financial trends among registered provider organizations, including an
1247	1247	1227analysis of systemic instabilities or inefficiencies that contribute to financial distress. The reports
1248	1248	1228shall include an identification and examination of: (i) registered provider organizations that the
1249	1249	1229center considers to be in financial distress, including any at risk of closing or discontinuing
1250	1250	1230essential health services, as defined by the department of public health under section 51G of
1251	1251	1231chapter 111, as a result of financial distress; and (ii) registered provider organizations with
1252	1252	1232private equity investment that have violated subsection (a) of section 23 of chapter 6D. The
1253	1253	1233center may provide this information in the report it produces pursuant to subsection (c) of section
1254	1254	12348.
1255	1255	1235 (4) The center shall refer to the commission any provider in which a private equity firm
1256	1256	1236has a financial interest that has violated subsection (a) of section 23 of chapter 6D.
1257	1257	1237 SECTION 59. Section 10 of said chapter 12C, as so appearing, is hereby amended by
1258	1258	1238inserting after the word “of”, in line 21, the following words:- communities and purchaser.
1259	1259	1239 SECTION 60. Subsection (b) of said section 10 of chapter 12C, as so appearing, is
1260	1260	1240hereby further amended by striking out clause (8) and inserting in place thereof the following
1261	1261	1241clause:-
1262	1262	1242 (8) relative prices paid to every hospital or physician group in the payer’s network, by
1263	1263	1243type of provider, with hospital inpatient and outpatient prices listed separately and product type,
1264	1264	1244including health maintenance organization and preferred provider organization products. 59 of 119
1265	1265	1245 SECTION 61. Said subsection (b) of said section 10 of said chapter 12C, as so appearing,
1266	1266	1246is hereby further amended by striking out, in lines 56 to 61, inclusive, the words “and (11) a
1267	1267	1247comparison of relative prices for the payer’s participating health care providers by provider type
1268	1268	1248which shows the average relative price, the extent of variation in price, stated as a percentage,
1269	1269	1249and identifies providers who are paid more than 10 per cent, 15 per cent and 20 per cent above
1270	1270	1250and more than 10 per cent, 15 per cent and 20 per cent below the average relative price” and
1271	1271	1251inserting in place thereof the following words:- (11) information about prescription drug
1272	1272	1252utilization and spending for all covered drugs, including for generic drugs, brand-name drugs and
1273	1273	1253specialty drugs provided in an inpatient or outpatient setting or sold in a retail setting, including,
1274	1274	1254but not limited to, information sufficient to show the: (i) highest utilization drugs, (ii) drugs with
1275	1275	1255the greatest increases in utilization, (iii) drugs that are most impactful on plan spending, net of
1276	1276	1256rebates, (iv) drugs with the highest year-over-year price increases, net of rebates, and (v) drugs
1277	1277	1257with the highest cost per prescription both gross and net of rebates; (12) information on clinical
1278	1278	1258quality, care coordination and patient referral practices; and (13) a comparison of relative prices
1279	1279	1259for the payer’s participating health care providers by provider type, which shows the average
1280	1280	1260relative price and the extent of variation in price and identifies providers who are paid more than
1281	1281	126110 per cent, 15 per cent and 20 per cent above and more than 10 per cent, 15 per cent and 20 per
1282	1282	1262cent below the average relative price.
1283	1283	1263 SECTION 62. Subsection (c) of said section 10 of said chapter 12C, as so appearing. is
1284	1284	1264hereby amended by striking out clause (8) and inserting in place thereof the following clause:-
1285	1285	1265 (8) relative prices paid to every hospital or physician group in the payer’s network, by
1286	1286	1266type of provider, with hospital inpatient and outpatient prices listed separately and product type,
1287	1287	1267including health maintenance organization and preferred provider organization products. 60 of 119
1288	1288	1268 SECTION 63. Said subsection (c) of said section 10 of said chapter 12C, as so appearing,
1289	1289	1269is hereby further amended by striking out, in lines 99 to 104, inclusive, the words “and (11) a
1290	1290	1270comparison of relative prices for the payer’s participating health care providers by provider type
1291	1291	1271which shows the average relative price, the extent of variation in price, stated as a percentage and
1292	1292	1272identifies providers who are paid more than 10 per cent, 15 per cent and 20 per cent above and
1293	1293	1273more than 10 per cent, 15 per cent and 20 per cent below the average relative price” and inserting
1294	1294	1274in place thereof the following words:- (11) information about prescription drug utilization and
1295	1295	1275spending for all covered drugs, including for generic drugs, brand-name drugs and specialty
1296	1296	1276drugs provided in an inpatient or outpatient setting or sold in a retail setting, including, but not
1297	1297	1277limited to, information sufficient to show the: (i) highest utilization drugs, (ii) drugs with the
1298	1298	1278greatest increases in utilization, (iii) drugs that are most impactful on plan spending, net of
1299	1299	1279rebates, (v) drugs with the highest year-over-year price increases, net of rebates, and (v) drugs
1300	1300	1280with the highest cost per prescription, both gross and net of rebates; (12) information on clinical
1301	1301	1281quality, care coordination and patient referral practices; and (13) a comparison of relative prices
1302	1302	1282for the payer’s participating health care providers by provider type, which shows the average
1303	1303	1283relative price and the extent of variation in price and identifies providers who are paid more than
1304	1304	128410 per cent, 15 per cent and 20 per cent above and more than 10 per cent, 15 per cent and 20 per
1305	1305	1285cent below the average relative price.
1306	1306	1286 SECTION 64. Said chapter 12C is hereby amended by inserting after section 10 the
1307	1307	1287following section:-
1308	1308	1288 Section 10A. (a) The center shall promulgate regulations necessary to ensure the uniform
1309	1309	1289annual reporting of information from pharmacy benefit managers certified under chapter 176Y,
1310	1310	1290including, but not limited to, data from the most recent calendar year detailing: (i) all discounts, 61 of 119
1311	1311	1291including the total dollar amount and percentage discount and rebates received from a
1312	1312	1292manufacturer for each drug on the pharmacy benefit manager's formularies; (ii) the total dollar
1313	1313	1293amount of all discounts and rebates that are retained by the pharmacy benefit manager for each
1314	1314	1294drug on the pharmacy benefit manager's formularies; (iii) actual total reimbursement amounts for
1315	1315	1295each drug the pharmacy benefit manager pays retail pharmacies after all direct and indirect
1316	1316	1296administrative and other fees that have been retrospectively charged to the pharmacies are
1317	1317	1297applied; (iv) the negotiated price health plans pay the pharmacy benefit manager for each drug
1318	1318	1298on the pharmacy benefit manager's formularies; (v) the amount, terms and conditions relating to
1319	1319	1299copayments, reimbursement options and other payments or fees associated with a prescription
1320	1320	1300drug benefit plan; and (vi) disclosure of any ownership interest the pharmacy benefit manager
1321	1321	1301has in a pharmacy or health plan with which it conducts business or any corporate affiliation
1322	1322	1302between the pharmacy benefit manager and the pharmacy or health plan with which it conducts
1323	1323	1303business; provided, however, that the center may examine or audit the financial records of a
1324	1324	1304pharmacy benefit manager for purposes of ensuring the information submitted pursuant to
1325	1325	1305regulations promulgated under this section is accurate.
1326	1326	1306 (b) The center shall analyze the information and data collected under subsection (a) and
1327	1327	1307shall publish an annual report summarizing, at minimum, the information collected under said
1328	1328	1308subsection (a) and comparing the information as it relates to pharmacy benefit managers certified
1329	1329	1309under chapter 176Y with respect to drugs provided to residents of the commonwealth.
1330	1330	1310 (c) Except as specifically provided otherwise by the center or under this chapter,
1331	1331	1311pharmacy benefit manager data collected by the center under this section shall not be a public
1332	1332	1312record under clause Twenty-sixth of section 7 of chapter 4 or chapter 66. The center may 62 of 119
1333	1333	1313confidentially provide pharmacy benefit manager data collected by the center under this section
1334	1334	1314to the health policy commission.
1335	1335	1315 SECTION 65. Said chapter 12C is hereby further amended by striking out section 11, as
1336	1336	1316appearing in the 2022 Official Edition, and inserting in place thereof the following section:-
1337	1337	1317 Section 11. The center shall ensure the timely reporting of information required under
1338	1338	1318sections 8 to 10, inclusive. The center shall notify entities required to submit data under this
1339	1339	1319chapter of any applicable reporting deadlines. The center shall notify, in writing, an entity, other
1340	1340	1320than a public payer required to submit data under this chapter, which has failed to meet a
1341	1341	1321reporting deadline and that failure to respond within 2 weeks of the receipt of the notice may
1342	1342	1322result in penalties. The center may assess a penalty against an entity other than a public health
1343	1343	1323care payer required to submit data under this chapter that fails, without just cause, to provide the
1344	1344	1324requested information within 2 weeks following receipt of the written notice required under this
1345	1345	1325paragraph, of not more than $25,000 per week for each week of delay after the 2-week period
1346	1346	1326following the reporting entity’s receipt of the written notice. Amounts collected under this
1347	1347	1327section shall be deposited in the Healthcare Payment Reform Fund, established under section 100
1348	1348	1328of 194 of the acts of 2011. The center shall notify the commission and the department of public
1349	1349	1329health if a provider or provider organization fails to timely report in accordance with this section,
1350	1350	1330or if the center has assessed a penalty under this section. Such notification shall be considered by
1351	1351	1331the commission in a cost and market impact review under section 13 of chapter 6D, and by the
1352	1352	1332department in determining licensure and suitability in accordance with section 51 of chapter 111
1353	1353	1333and for a determination of need under section 25C of said chapter 111. 63 of 119
1354	1354	1334 SECTION 66. Section 12 of said chapter 12C, as so appearing, is hereby amended by
1355	1355	1335adding the following subsection:-
1356	1356	1336 (c) Notwithstanding any general or special law to the contrary, a provider, private health
1357	1357	1337care payer, public health care payer, agency, department, division, commission, board, authority
1358	1358	1338or other public or quasi-public entity in the commonwealth that collects patient information,
1359	1359	1339including personal data as defined in section 1 of chapter 66A, shall, upon a request from the
1360	1360	1340center, provide such data to the center for any purpose consistent with this chapter; provided,
1361	1361	1341however, that the disclosure of such information shall be in compliance with federal law.
1362	1362	1342 SECTION 67. Said chapter 12C is hereby further amended by striking out section 14, as
1363	1363	1343so appearing, and inserting in place thereof the following section:-
1364	1364	1344 Section 14. (a)(1) Not later than March 1 in each even-numbered year, the center, in
1365	1365	1345consultation with the statewide advisory committee established pursuant to subsection (c), shall
1366	1366	1346establish a standard set of measures of health care provider quality and health system
1367	1367	1347performance, hereinafter referred to as the “standard quality measure set”, for use in: (i) contracts
1368	1368	1348between payers, including between the commonwealth and carriers and between health care
1369	1369	1349providers, provider organizations and accountable care organizations, which incorporate quality
1370	1370	1350measures into payment terms, including the designation of a set of core measures and a set of
1371	1371	1351non-core measures; (ii) assigning tiers to health care providers in the design of any health plan;
1372	1372	1352(iii) consumer transparency websites and other methods of providing consumer information; (iv)
1373	1373	1353monitoring system-wide performance; and (v) reducing provider administrative burden related to
1374	1374	1354quality measure reporting. 64 of 119
1375	1375	1355 (2) The standard quality measure set shall designate: (i) core measures that shall be used
1376	1376	1356in contracts that incorporate quality measures into payment terms between payers, including the
1377	1377	1357commonwealth and carriers, and health care providers, including provider organizations and
1378	1378	1358accountable care organizations, and shall meet the core criteria set by the statewide advisory
1379	1379	1359committee pursuant to paragraph (3) of subsection (c); and (ii) a menu of non-core measures that
1380	1380	1360may be used in such contracts. The standard quality measure set shall allow for innovation and
1381	1381	1361the development of outcome measures for quality and safety. If the standard quality measure set
1382	1382	1362established by the center differs from the recommendations of the statewide advisory committee,
1383	1383	1363the center shall issue a written report detailing each area of disagreement and the rationale for the
1384	1384	1364center’s decision.
1385	1385	1365 (b) The center shall develop uniform reporting requirements for the standard quality
1386	1386	1366measure set for each health care provider facility, medical group or provider group in the
1387	1387	1367commonwealth; provided, however, that the center shall prioritize the development of uniform
1388	1388	1368reporting requirements for primary care and behavioral health providers; and provided further,
1389	1389	1369that the uniform reporting requirements shall not increase provider administrative burden related
1390	1390	1370to quality measure reporting.
1391	1391	1371 (c)(1) The center shall convene a statewide advisory committee which shall make
1392	1392	1372recommendations for the standard quality measure set to: (i) ensure consistency in the use of
1393	1393	1373quality and safety measures in contracts between payers, including the commonwealth and
1394	1394	1374carriers, and health care providers in the commonwealth; (ii) ensure consistency in methods for
1395	1395	1375the assignment of tiers to providers in the design of any health plan; (iii) improve quality and
1396	1396	1376safety of care; (iv) improve transparency for consumers and employers; (v) improve health 65 of 119
1397	1397	1377system monitoring and oversight by relevant state agencies; and (vi) reduce administrative
1398	1398	1378burdens.
1399	1399	1379 (2) The statewide advisory committee shall consist of commissioner of insurance or a
1400	1400	1380designee, who shall serve as co-chair; the executive director of the health policy commission, or
1401	1401	1381their designee, who shall serve as co-chair; the executive director of the center; the executive
1402	1402	1382director of the Betsy Lehman center for patient safety and medical error reduction; the executive
1403	1403	1383director of the group insurance commission; the secretary of elder affairs; the assistant secretary
1404	1404	1384for MassHealth; the commissioner of the department of public health; the commissioner of the
1405	1405	1385department of mental health; and 11 members who shall be appointed by the governor, 1 of
1406	1406	1386whom shall be a representative of Massachusetts Health and Hospital Association, Inc., 1 of
1407	1407	1387whom shall be a representative of the Massachusetts League of Community Health Centers, Inc.,
1408	1408	13881 of whom shall be a representative the Massachusetts Medical Society, 1 of whom shall be a
1409	1409	1389registered nurse licensed to practice in the commonwealth who practices in a patient care setting,
1410	1410	13901 of whom shall be a representative of a labor organization representing health care workers, 1 of
1411	1411	1391whom shall be a behavioral health provider, 1 of whom shall be a long-term supports and
1412	1412	1392services provider, 1 of whom shall be a representative of Blue Cross and Blue Shield of
1413	1413	1393Massachusetts, Inc., 1 of whom shall be a representative of Massachusetts Association of Health
1414	1414	1394Plans, Inc., 1 of whom shall be a representative of a specialty pediatric provider and 1 of whom
1415	1415	1395shall be a representative of consumers. Members appointed to the statewide advisory committee
1416	1416	1396shall have experience with and expertise in health care quality measurement.
1417	1417	1397 (3) The statewide advisory committee shall meet quarterly to develop recommendations
1418	1418	1398for the core measure and non-core measures to be adopted in the standard quality measure set for
1419	1419	1399use in: (i) contracts between payers, including the commonwealth and carriers, and health care 66 of 119
1420	1420	1400providers, provider organizations and accountable care organizations, including the designation
1421	1421	1401of a set of core measures and a set of non-core measures; (ii) assigning tiers to health care
1422	1422	1402providers in the design of any health plan; (iii) consumer transparency websites and other
1423	1423	1403methods of providing consumer information; (iv) monitoring system-wide performance; and (v)
1424	1424	1404reducing provider administrative burdens related to quality measure reporting.
1425	1425	1405 (4) In developing its recommendations for the standard quality measure set, the statewide
1426	1426	1406advisory committee shall incorporate recognized quality and safety measures including, but not
1427	1427	1407limited to, measures used by the Centers for Medicare and Medicaid Services, the group
1428	1428	1408insurance commission, carriers and providers and provider organizations in the commonwealth
1429	1429	1409and other states, as well as other valid measures of health care provider performance and
1430	1430	1410outcomes, including patient-reported outcomes and functional status, patient experience, health
1431	1431	1411disparities and population health. The statewide advisory committee shall consider measures
1432	1432	1412applicable to primary care providers, specialists, hospitals, provider organizations, accountable
1433	1433	1413care organizations, oral health providers and other types of providers and measures applicable to
1434	1434	1414different patient populations.
1435	1435	1415 (5) Not later than January 1 in each even-numbered year, the statewide advisory
1436	1436	1416committee shall submit to the center its recommendations on the core measures and non-core
1437	1437	1417measures to be adopted, changed or updated by the center in the standard quality measure set,
1438	1438	1418along with a report in support of its recommendations.
1439	1439	1419 SECTION 68. Section 15 of said chapter 12C, as so appearing, is hereby amended by
1440	1440	1420striking out, in line 4, the word “injury” and inserting in place thereof the following word:- harm. 67 of 119
1441	1441	1421 SECTION 69. Said section 15 of said chapter 12C, as so appearing, is hereby further
1442	1442	1422amended by striking out the definition of “Board” and inserting in place thereof the following 3
1443	1443	1423definitions:-
1444	1444	1424 “Agency”, an agency of the executive branch of the commonwealth including, but not
1445	1445	1425limited to, a constitutional or other office, executive office, department, division, bureau, board,
1446	1446	1426commission or committee thereof, or any authority created by the general court to serve a public
1447	1447	1427purpose, having either statewide or local jurisdiction.
1448	1448	1428 “Board”, the patient safety and medical errors reduction board.
1449	1449	1429 “Healthcare-associated infection”, an infection that a patient acquires during the course of
1450	1450	1430receiving treatment for other conditions within a health care setting.
1451	1451	1431 SECTION 70. Said section 15 of said chapter 12C, as so appearing, is hereby further
1452	1452	1432amended by inserting after the definition of “Patient safety” the following definition:-
1453	1453	1433 “Patient safety information”, data and information related to patient safety, including
1454	1454	1434adverse events, incidents, medical errors or health care-associated infections, that is collected or
1455	1455	1435maintained by agencies.
1456	1456	1436 SECTION 71. Said section 15 of said chapter 12C, as so appearing, is hereby further
1457	1457	1437amended by striking out subsection (f) and inserting in place thereof the following 3
1458	1458	1438subsections:-
1459	1459	1439 (f) Notwithstanding any general or special law to the contrary, the Lehman center and
1460	1460	1440any agency, provider organization, department, division, commission, board, authority or other
1461	1461	1441public or quasi-public entity in the commonwealth that collects or maintains patient safety 68 of 119
1462	1462	1442information may transmit such information, including personal data as defined in section 1 of
1463	1463	1443chapter 66A, to each other, and shall transmit such information to the Lehman center upon
1464	1464	1444request from the Lehman center; provided, however, that transmission of such information shall
1465	1465	1445be governed by an agreement, which may be an interagency service agreement, between the
1466	1466	1446party transmitting the information and the Lehman center; provided further, that such agreement
1467	1467	1447shall provide for any safeguards necessary to protect the privacy and security of the information;
1468	1468	1448and provided further, that the transmission of such information shall be in compliance with
1469	1469	1449federal law.
1470	1470	1450 (g) The Lehman center may adopt rules and regulations necessary to carry out the
1471	1471	1451purpose of this section. The Lehman center may contract with any federal, state or municipal
1472	1472	1452entity or other public institution or with any private individual, partnership, firm, corporation,
1473	1473	1453association or other entity to manage its affairs or carry out the purpose of this section.
1474	1474	1454 (h) The Lehman center shall report annually to the joint committee on health care
1475	1475	1455financing regarding the progress made in improving patient safety and medical error reduction.
1476	1476	1456The Lehman center may seek federal and foundation support to supplement state resources to
1477	1477	1457carry out the Lehman center’s patient safety and medical error reduction goals.
1478	1478	1458 SECTION 72. Section 16 of said chapter 12C, as so appearing, is hereby amended by
1479	1479	1459inserting after the word “publish”, in line 1, the following words:- , for the most recently
1480	1480	1460concluded benchmark cycle, .
1481	1481	1461 SECTION 73. Said section 16 of said chapter 12C, as so appearing, is hereby further
1482	1482	1462amended by inserting after the word “submitted”, in line 2, the following words:- for that
1483	1483	1463benchmark cycle . 69 of 119
1484	1484	1464 SECTION 74. Said section 16 of said chapter 12C, as so appearing, is hereby further
1485	1485	1465amended by striking out, in line 7, the word “benchmark” and inserting in place thereof the
1486	1486	1466following words:- and affordability benchmarks.
1487	1487	1467 SECTION 75. Said section 16 of said chapter 12C, as so appearing, is hereby further
1488	1488	1468amended by striking out, in line 8, the words “section 9” and inserting in place thereof the
1489	1489	1469following words:- sections 9 and 9A.
1490	1490	1470 SECTION 76. Said section 16 of said chapter 12C, as so appearing, is hereby further
1491	1491	1471amended by striking out, in line 43, the words “and (12)” and inserting in place thereof the
1492	1492	1472following words:- (12) a standard set of measures of health care affordability in the
1493	1493	1473commonwealth, including family health care expenditures and an annual index of how such
1494	1494	1474health care costs compare to the health care affordability benchmark set under section 9A of
1495	1495	1475chapter 6D; and (13).
1496	1496	1476 SECTION 77. Said chapter 12C of the General Laws is hereby amended by striking out
1497	1497	1477sections 17 and 18, as so appearing, and inserting in place thereof the following 2 sections:-
1498	1498	1478 Section 17. The attorney general may review and analyze any information submitted to
1499	1499	1479the center by a provider, provider organization, private equity firm, real estate investment trust,
1500	1500	1480management services organization, pharmaceutical manufacturing company, pharmacy benefit
1501	1501	1481manager or payer pursuant to sections 8, 9 and 10 of this chapter, and to the commission under
1502	1502	1482section 8 of chapter 6D. The attorney general may require that such entities produce documents,
1503	1503	1483answer interrogatories and provide testimony under oath related to health care costs and cost
1504	1504	1484trends, factors that contribute to cost growth within the commonwealth’s health care system and
1505	1505	1485the relationship between provider costs and payer premium rates. The attorney general shall keep 70 of 119
1506	1506	1486confidential all nonpublic information and documents obtained under this section and shall not
1507	1507	1487disclose the information or documents to any person without the consent of the entity that
1508	1508	1488produced the information or documents; provided, however, that the attorney general may
1509	1509	1489disclose such information or documents during (i) the annual hearing conducted under section 8
1510	1510	1490of chapter 6D, (ii) a rate hearing before the health insurance bureau, or (iii) in a case brought by
1511	1511	1491the attorney general, if the attorney general believes that such disclosure will promote the health
1512	1512	1492care cost containment goals of the commonwealth and that the disclosure would be in the public
1513	1513	1493interest after taking into account any privacy, trade secret or anti-competitive considerations. The
1514	1514	1494confidential information and documents shall not be public records and shall be exempt from
1515	1515	1495disclosure under clause Twenty-sixth of section 7 of chapter 4 or section 10 of chapter 66.
1516	1516	1496 Section 18. (a) The center shall perform ongoing analysis of data it receives under this
1517	1517	1497chapter to identify any health care entity whose: (1) contribution to health care spending levels
1518	1518	1498and growth, including but not limited to, spending levels and growth as measured by health-
1519	1519	1499status adjusted total medical expense or total medical expense, is considered excessive and who
1520	1520	1500threaten the ability of the state to meet the health care cost growth benchmark established by the
1521	1521	1501commission under section 9 of chapter 6D; provided further, that the center shall identify cohorts
1522	1522	1502for similar health care entities and establish differential standards for excessive growth rates
1523	1523	1503within the health care cost growth benchmark established by the commission under section 9 of
1524	1524	1504chapter 6D, based on factors which may include, but are not limited to, a health care entity’s
1525	1525	1505spending, pricing levels and payer mix; or (2) data is not submitted to the center in a proper,
1526	1526	1506timely or complete manner.
1527	1527	1507 (b) The center shall confidentially provide a list of the health care entities to the
1528	1528	1508commission such that the commission may pursue further action under section 10 of chapter 6D. 71 of 119
1529	1529	1509Confidential referrals under this section shall not preclude the center from using its authority to
1530	1530	1510assess penalties for noncompliance under section 11.
1531	1531	1511 SECTION 78. Section 10 of chapter 13 of the General Laws, as so appearing, is hereby
1532	1532	1512amended by striking out the last paragraph and inserting in place thereof the following
1533	1533	1513paragraph:-
1534	1534	1514 The board may: (i) adopt, amend and rescind such rules and regulations as it deems
1535	1535	1515necessary to carry out this chapter subject to the approval of the commissioner of public health;
1536	1536	1516(ii) make contracts and arrangements for the performance of administrative and similar services
1537	1537	1517required or appropriate in the performance of the duties of the board; and (iii) adopt and make
1538	1538	1518public rules of procedure and other regulations not inconsistent with other provisions of the
1539	1539	1519General Laws. The commissioner of public health shall appoint an executive director and a legal
1540	1540	1520counsel for the board.
1541	1541	1521 SECTION 79. Said chapter 13 is hereby further amended by striking out section 10A, as
1542	1542	1522so appearing, and inserting in place thereof the following section:-
1543	1543	1523 Section 10A. The commissioner of public health shall review and approve any rule or
1544	1544	1524regulation proposed by the board of registration in medicine pursuant to section 10. Such rule or
1545	1545	1525regulation shall be deemed disapproved unless approved within 60 days of submission to the
1546	1546	1526commissioner pursuant to said section 10.
1547	1547	1527 SECTION 80. Chapter 26 of the General Laws is hereby amended by striking out section
1548	1548	15287A, as so appearing, and inserting in place thereof the following section:- 72 of 119
1549	1549	1529 Section 7A. (a) As used in this section, the following words shall, unless the context
1550	1550	1530clearly requires otherwise, have the following meanings:-
1551	1551	1531 “Bureau”, health insurance bureau.
1552	1552	1532 “Deputy commissioner”, the deputy commissioner of the health insurance bureau.
1553	1553	1533 “Health benefit plan”, any individual, general, blanket or group policy of health, accident
1554	1554	1534and sickness insurance issued by an insurer licensed under chapter 175; an individual or group
1555	1555	1535hospital service plan issued by a non-profit hospital service corporation under chapter 176A; an
1556	1556	1536individual or group medical service plan issued by a nonprofit medical service corporation under
1557	1557	1537chapter 176B; an individual or group health maintenance contract issued by a health maintenance
1558	1558	1538organization under chapter 176G, and a dental service plan offered by a dental service
1559	1559	1539corporation under chapter 176E. Health benefit plans shall not include: (i) accident only, credit
1560	1560	1540only, limited scope vision if offered separately; (ii) hospital indemnity insurance policies that
1561	1561	1541provide a benefit to be paid to an insured or a dependent, including the spouse of an insured, on
1562	1562	1542the basis of a hospitalization of the insured or a dependent, that are sold as a supplement and not
1563	1563	1543as a substitute for a health benefit plan and that meet any requirements set by the commissioner
1564	1564	1544by regulation; (iii) disability income insurance; (iv) coverage issued as a supplement to liability
1565	1565	1545insurance; (v) specified disease insurance that is purchased as a supplement and not as a
1566	1566	1546substitute for a health plan and meets any requirements the commissioner by regulation may set;
1567	1567	1547(vi) insurance arising out of a workers' compensation law or similar law; (vii) automobile
1568	1568	1548medical payment insurance; (viii) insurance under which benefits are payable with or without
1569	1569	1549regard to fault and which is statutorily required to be contained in a liability insurance policy or
1570	1570	1550equivalent self-insurance; (ix) long-term care if offered separately; (x) coverage supplemental to 73 of 119
1571	1571	1551the coverage provided under 10 U.S.C. 55 if offered as a separate insurance policy; (xi) travel
1572	1572	1552insurance; or (xii) any policy subject to chapter 176K or any similar policies issued on a group
1573	1573	1553basis, Medicare Advantage plans or Medicare Prescription drug plans. A health plan issued,
1574	1574	1554renewed or delivered within or without the commonwealth to an individual who is enrolled in a
1575	1575	1555qualifying student health insurance program under section 18 of chapter 15A shall not be
1576	1576	1556considered a health plan for the purposes of this chapter and shall be governed by said chapter
1577	1577	155715A; provided, however, that travel insurance for the purpose of this chapter is insurance
1578	1578	1558coverage for personal risks incident to planned travel, including, but not limited to: (A)
1579	1579	1559interruption or cancellation of trip or event; (B) loss of baggage or personal effects; (C) damages
1580	1580	1560to accommodations or rental vehicles; or (D) sickness, accident, disability or death occurring
1581	1581	1561during travel, provided, however, that the health benefits are not offered on a stand-alone basis
1582	1582	1562and are incidental to other coverages; and provided further, that the term “travel insurance” shall
1583	1583	1563not include major medical plans, which provide comprehensive medical protection for travelers
1584	1584	1564with trips lasting 6 months or longer, including for example, those working overseas as ex-patriot
1585	1585	1565or military personnel being deployed.
1586	1586	1566 “Rate review”, any examination performed by the deputy commissioner of the aggregate
1587	1587	1567rates of payment pursuant to sections 5, 6 and 10 of chapter 176A; section 4 of chapter 176B;
1588	1588	1568section 16 of chapter 176G; section 6 of chapter 176J; and section 7 of chapter 176K.
1589	1589	1569 (b) There shall be within the division of insurance a health insurance bureau overseen by
1590	1590	1570a deputy commissioner, whose duties shall include, but not be limited to, rate review of premium
1591	1591	1571rates for health benefit plans offered, issued or renewed in the commonwealth, administration of
1592	1592	1572the division's statutory and regulatory authority for oversight of the small group and individual
1593	1593	1573health insurance market, oversight of affordable health plans, including coverage for young 74 of 119
1594	1594	1574adults, as well as the dissemination of appropriate information to consumers about health
1595	1595	1575insurance coverage and access to affordable products. The deputy commissioner shall: (i) protect
1596	1596	1576the interests of consumers of health insurance; (ii) encourage fair treatment of health care
1597	1597	1577providers by health insurers; (iii) enhance equity, access, quality and affordability in the health
1598	1598	1578care system; (iv) guard the solvency of health insurers; (v) work cooperatively with the health
1599	1599	1579policy commission and the center for health information and analysis to monitor health care
1600	1600	1580spending; and (vi) consider affordability of health insurance products during rate review.
1601	1601	1581 (c) The deputy commissioner shall develop affordability standards to consider during rate
1602	1602	1582review; provided, however, that the deputy commissioner’s review of a carrier’s rates shall
1603	1603	1583adhere to principles of solvency and actuarial soundness. Such standards shall consider factors
1604	1604	1584including, but not limited to: (i) affordability for consumers, including the totality of costs paid
1605	1605	1585by consumers of health insurance for covered benefits including, but not limited to, the enrollee’s
1606	1606	1586share of premium, out-of-pocket maximum amounts, deductibles, copays, coinsurance and other
1607	1607	1587forms of cost sharing for health insurance coverage; (ii) affordability for purchasers, including
1608	1608	1588the totality of costs paid by purchasers of health insurance including, but not limited to, premium
1609	1609	1589costs, actuarial value of coverage for covered benefits and the value delivered on health care
1610	1610	1590spending in terms of improved quality and cost efficiency; and (iii) the impact of proposed rates
1611	1611	1591on the commonwealth’s performance against the health care cost growth benchmark established
1612	1612	1592in section 9 of chapter 6D and the affordability benchmark established in section 9A of said
1613	1613	1593chapter 6D.
1614	1614	1594 (d) The deputy commissioner shall review data and documents submitted to the division,
1615	1615	1595including, but not limited to, any materials submitted as part of rate reviews, to examine the
1616	1616	1596causes of premium rate increases and excessive provider price variation. 75 of 119
1617	1617	1597 (e) The commissioner shall appoint, at a minimum, the following employees to the
1618	1618	1598bureau: a deputy commissioner, a general counsel, a chief health economist, a chief actuary, a
1619	1619	1599chief research analyst and a chief examiner. The appointed employees shall devote their full time
1620	1620	1600to the duties of their offices, shall be exempt from chapters 30 and 31 and shall serve at the
1621	1621	1601pleasure of the commissioner. The commissioner may appoint and remove additional employees,
1622	1622	1602including, but not limited to, a first deputy, economists, analysts, examiners, assistant actuaries,
1623	1623	1603inspectors, clerks and other assistants as the work of the division may require. Such additional
1624	1624	1604employees shall perform such duties as the commissioner may prescribe.
1625	1625	1605 (f) The commissioner shall make and collect an assessment against the carriers licensed
1626	1626	1606under chapters 175, 176A, 176B, 176E, 176F and 176G to pay for the expenses of the bureau.
1627	1627	1607The assessment shall be at a rate sufficient to produce $1,000,000 annually. In addition to that
1628	1628	1608amount, the assessment shall include an amount to be credited to the General Fund which shall
1629	1629	1609be equal to the total amount of funds estimated by the secretary of administration and finance to
1630	1630	1610be expended from the General Fund for indirect and fringe benefit costs attributable to the
1631	1631	1611personnel costs of the bureau. The assessment shall be allocated on a fair and reasonable basis
1632	1632	1612among all carriers licensed under said chapters. The funds produced by the assessments shall be
1633	1633	1613expended by the bureau, in addition to any other funds which may be appropriated, to assist in
1634	1634	1614defraying the general operating expenses of the division and may be used to compensate
1635	1635	1615consultants retained by the bureau. A carrier licensed under said chapters shall pay the amount
1636	1636	1616assessed against it within 30 days after the date of the notice of assessment from the
1637	1637	1617commissioner.
1638	1638	1618 (g) Notwithstanding any general or special law to the contrary, carriers offering health
1639	1639	1619benefit plans, including carriers licensed under chapter 175, 176A, 176B or 176G, shall annually 76 of 119
1640	1640	1620file a summary of negotiated rate increases for their largest providers, by provider group to the
1641	1641	1621bureau. The deputy commissioner shall confidentially provide such information to the health
1642	1642	1622policy commission.
1643	1643	1623 Rates of reimbursement or rate increases submitted for review by the bureau under this
1644	1644	1624section shall be deemed confidential and exempt from the definition of public records in clause
1645	1645	1625Twenty-sixth of section 7 of chapter 4 or section 10 of chapter 66. The deputy commissioner
1646	1646	1626shall adopt regulations to carry out this section.
1647	1647	1627 SECTION 81. Subsection (b) of section 7H½ of chapter 29 of the General Laws, as so
1648	1648	1628appearing, is hereby amended by striking out the first sentence and inserting in place thereof the
1649	1649	1629following sentence:- Annually, not later than January 15, the secretary of administration and
1650	1650	1630finance shall meet with the house and senate committees on ways and means and shall jointly
1651	1651	1631develop a growth rate of potential gross state product for the calendar year that will begin 2 years
1652	1652	1632following the calendar year in which the January 15 date occurs, which shall be agreed to by the
1653	1653	1633secretary and the committees.
1654	1654	1634 SECTION 82. Section 9-609 of chapter 106 of the General Laws, as so appearing, is
1655	1655	1635hereby amended by adding the following subsection:-
1656	1656	1636 (d) Notwithstanding subsection (a), in the case of a debtor that is a hospital licensed by
1657	1657	1637the department of public health under section 51 of chapter 111 and collateral that is a medical
1658	1658	1638device, a secured party shall send notice to the debtor and the department of public health not
1659	1659	1639less than 90 days prior to taking possession of the collateral, rendering equipment unusable or
1660	1660	1640disposing of the collateral on the debtor’s premises pursuant to subsection (a). For the purposes 77 of 119
1661	1661	1641of this subsection, “medical device” shall have the same meaning as that term is defined in
1662	1662	1642section 1 of chapter 111N.
1663	1663	1643 SECTION 83. Section 1 of chapter 111 of the General Laws, as so appearing, is hereby
1664	1664	1644amended by inserting after the definition “Nuclear reactor” the following definition:-
1665	1665	1645 “Party of record”, during the pendency of an application for a determination of need, an
1666	1666	1646applicant for a determination of need, the attorney general, the center for health information and
1667	1667	1647analysis, the health policy commission, any government agency with relevant oversight or
1668	1668	1648licensure authority over the proposed project or components therein or any 10 taxpayers of the
1669	1669	1649commonwealth organized as a group.
1670	1670	1650 SECTION 84. Section 25A of said chapter 111, as so appearing, is hereby amended by
1671	1671	1651striking out the first 5 paragraphs.
1672	1672	1652 SECTION 85. Section 25C of said chapter 111, as so appearing, is hereby amended by
1673	1673	1653striking out subsections (g) to (j), inclusive, and inserting in place thereof the following 4
1674	1674	1654subsections:-
1675	1675	1655 (g) The department, in making any determination of need, shall: (i) assess both the
1676	1676	1656applicant and the proposed project; (ii) be guided by the state health plan and focused health
1677	1677	1657assessments pursuant to section 22 of chapter 6D and the health care resources inventory
1678	1678	1658pursuant to section 9 of chapter 12C; (iii) encourage appropriate allocation of private and public
1679	1679	1659health care resources and the development of alternative or substitute methods of delivering
1680	1680	1660health care services so that adequate health care services will be made reasonably available to
1681	1681	1661every person within the commonwealth at the lowest reasonable aggregate cost; (iv) be guided
1682	1682	1662by the commonwealth’s cost containment and affordability goals; (v) assess the impacts on the 78 of 119
1683	1683	1663applicant’s patients and on other residents of the commonwealth, including, but not limited to,
1684	1684	1664considerations of health equity and the workforce of surrounding health care providers; and (vi)
1685	1685	1665take into account any comments and relevant data from the center for health information and
1686	1686	1666analysis, the health policy commission, including, but not limited to, any cost and market impact
1687	1687	1667review report pursuant to subsection (f) of section 13 of chapter 6D, and any other state agency
1688	1688	1668or entity. The department may impose reasonable terms and conditions on the approval of a
1689	1689	1669determination of need as the department determines are necessary to achieve the purposes and
1690	1690	1670intent of this section, including, but not limited to, conditions intended to address health care
1691	1691	1671disparities and better align a project with community needs. The department may recognize the
1692	1692	1672special needs and circumstances of projects that: (i) are essential to the conduct of research in
1693	1693	1673basic biomedical or health care delivery areas or to the training of health care personnel; (ii) are
1694	1694	1674unlikely to result in any increase in the clinical bed capacity or outpatient load capacity of the
1695	1695	1675facility; and (iii) are unlikely to cause an increase in the total patient care charges of the facility
1696	1696	1676to the public for health care services, supplies and accommodations, as such charges shall be
1697	1697	1677defined from time to time in accordance with section 5 of chapter 409 of the acts of 1976. The
1698	1698	1678department may also recognize the special needs and circumstances of projects that may address
1699	1699	1679a lack of supply for a specific region, population or service line that has been identified in the
1700	1700	1680state health plan or focused assessments pursuant to section 22 of chapter 6D.
1701	1701	1681 (h) Applications for such determination shall be filed with the department, together with
1702	1702	1682other forms and information as shall be prescribed by, or acceptable to, the department. No
1703	1703	1683provider or provider organization may apply for a notice of determination of need until a
1704	1704	1684material change notice, if required, has been submitted to the health policy commission under
1705	1705	1685section 13 of chapter 6D. A duplicate copy of any application together with supporting 79 of 119
1706	1706	1686documentation for such application, shall be a public record and kept on file in the department.
1707	1707	1687The department may require a public hearing on any application at its discretion or at the request
1708	1708	1688of the attorney general. The attorney general may intervene in any hearing under this section. A
1709	1709	1689reasonable fee, established by the department, shall be paid upon the filing of such application;
1710	1710	1690provided, however, that such fee shall not exceed 0.2 per cent of the capital expenditures, if any,
1711	1711	1691proposed by the applicant. The department may adapt the information required and fees required
1712	1712	1692for applications if it determines a project or class of projects may address a lack of supply for a
1713	1713	1693specific region, population or service line that has been identified in the state health plan or
1714	1714	1694focused assessments pursuant to section 22 of chapter 6D. The department may also require an
1715	1715	1695independent cost analysis be conducted, at the expense of the applicant, by an entity selected and
1716	1716	1696overseen by the department, including, but not limited to, another state agency, to demonstrate
1717	1717	1697that the application is consistent with the commonwealth's efforts to meet the health care cost
1718	1718	1698containment goals established by the commission. Such entity may request, and the applicant
1719	1719	1699may not unreasonably withhold, confidential data and documents necessary to conduct an
1720	1720	1700independent cost analysis pursuant to such section; provided, however, that any confidential data
1721	1721	1701and documents so requested shall be provided to the entity conducting the independent cost
1722	1722	1702analysis, the department, the health policy commission and the attorney general, but shall not be
1723	1723	1703disclosed to any other person without the consent of the applicant, except in summary form, or
1724	1724	1704when the department, health policy commission or attorney general determines that such
1725	1725	1705disclosure should be made in the public interest after taking into account any privacy, trade
1726	1726	1706secret or anticompetitive considerations; and provided further, that any confidential data and
1727	1727	1707documents so provided shall not be public records and shall be exempt from disclosure under
1728	1728	1708clause Twenty-sixth of section 7 of chapter 4 or section 10 of chapter 66. 80 of 119
1729	1729	1709 (i) Except in the case of an emergency situation determined by the department as
1730	1730	1710requiring immediate action to prevent further damage to the public health or to a health care
1731	1731	1711facility, the department shall not act upon an application for such determination unless: (i) the
1732	1732	1712application has been on file with the department for not less than 30 days; (ii) the center for
1733	1733	1713health information and analysis, the health policy commission, the office of the attorney general,
1734	1734	1714the state and appropriate regional comprehensive health planning agencies and, in the case of
1735	1735	1715long-term care facilities only, the department of elder affairs, or in the case of any facility
1736	1736	1716providing inpatient services for individuals with intellectual or developmentally disabilities, the
1737	1737	1717departments of mental health or developmental services, respectively, have been provided copies
1738	1738	1718of such application and supporting documents and given reasonable opportunity to supply
1739	1739	1719required information and comment on such application; and (iii) a public hearing has been held
1740	1740	1720on such application when requested by the applicant, the state or appropriate regional
1741	1741	1721comprehensive health planning agency, any 10 taxpayers of the commonwealth or any other
1742	1742	1722party of record. If, in any filing period, an individual application is filed that would implicitly
1743	1743	1723decide any other application filed during such period, the department shall not act only upon an
1744	1744	1724individual application.
1745	1745	1725 (j) The department shall so approve or disapprove, in whole or in part, each such
1746	1746	1726application for a determination of need not more than 6 months after filing with the department;
1747	1747	1727provided, however, that the department may, on not more than 1 occasion, delay the action for up
1748	1748	1728to 2 months after the applicant has provided information which the department has reasonably
1749	1749	1729requested during the 8-month period; provided further, that: (i) the period for review of an
1750	1750	1730application for which an independent cost analysis is conducted pursuant to subsection (h) shall
1751	1751	1731be stayed until a completed independent cost analysis is received and accepted by the 81 of 119
1752	1752	1732department: (ii) the period of review of an application for which the commission conducts a cost
1753	1753	1733and market impact review shall be stayed until a final cost and market impact review has been
1754	1754	1734issued: and (iii) the period of review of an application for which the applicant is subject to a
1755	1755	1735performance improvement plan pursuant to section 10 of chapter 6D shall be stayed until the
1756	1756	1736commission determines that the applicant is implementing or has implemented said performance
1757	1757	1737improvement plan in good faith; and provided further, that the commission may rescind its
1758	1758	1738determination that the applicant is implementing a performance improvement plan in good faith
1759	1759	1739at any time prior to successful completion of the performance improvement plan. Applications
1760	1760	1740remanded to the department by the health facilities appeals board under section 25E shall be
1761	1761	1741acted upon by the department within the same time limits provided in this section for the
1762	1762	1742department to approve or disapprove applications for a determination of need. If an application
1763	1763	1743has not been acted upon by the department within such time limits, the applicant may, within a
1764	1764	1744reasonable period of time, bring an action in the nature of mandamus in the superior court to
1765	1765	1745require the department to act upon the application.
1766	1766	1746 SECTION 86. Said section 25C of said chapter 111, as so appearing, is hereby further
1767	1767	1747amended by adding the following 2 subsections:-
1768	1768	1748 (o) Notwithstanding sections (a) through (d), the department may create a process under
1769	1769	1749which persons or entities proposing a project that would normally require a determination of
1770	1770	1750need may apply for a waiver of such requirement. Such waiver shall be granted only in cases in
1771	1771	1751which the person or entity demonstrates the project will address a lack of supply for a specific
1772	1772	1752region, population or service line that has been identified in the state health plan or focused
1773	1773	1753assessments pursuant to section 22 of chapter 6D. The department may require a waiver request
1774	1774	1754be accompanied by forms and information as shall be prescribed by, or acceptable to, the 82 of 119
1775	1775	1755department. A duplicate copy of any waiver request together with supporting documentation for
1776	1776	1756such application shall be a public record and kept on file in the department.
1777	1777	1757 (p) A party of record may review an application for determination of need and provide
1778	1778	1758written comment or specific recommendations for consideration by the department. Whenever a
1779	1779	1759party of record submits written materials concerning an application for determination of need,
1780	1780	1760the department shall provide copies of such materials to all other parties of record.
1781	1781	1761 SECTION 87. Section 25F of said chapter 111, as so appearing, is hereby amended by
1782	1782	1762inserting after the word “care”, in line 7, the following word:- financing.
1783	1783	1763 SECTION 88. Paragraph (4) of subsection (d) of section 51G of said chapter 111, as so
1784	1784	1764appearing, is hereby further amended by inserting, after the third sentence, the following
1785	1785	1765sentence:-
1786	1786	1766 The department may seek an analysis of the impact of the closure from the health policy
1787	1787	1767commission.
1788	1788	1768 SECTION 89. Said subsection (d) of said section 51G of said chapter 111, as so
1789	1789	1769appearing, is hereby further amended by adding the following 2 paragraphs:-
1790	1790	1770 (7) No original license shall be granted or renewed, to establish or maintain an acute-care
1791	1791	1771hospital unless: (i) all documents related to any lease, master lease, sublease, license or any other
1792	1792	1772agreement for the use, occupancy or utilization of the premises occupied by the acute-care
1793	1793	1773hospital are disclosed to the department upon application for licensure; and (ii) the department
1794	1794	1774has reviewed such documentation and determined the applicant is suitable for licensure. 83 of 119
1795	1795	1775 (8) No original license shall be granted, nor renewed, to establish or maintain an acute-
1796	1796	1776care hospital, as defined in section 25B, unless the applicant is in compliance with the reporting
1797	1797	1777requirements established in sections 8 to 10, inclusive, of chapter 12C.
1798	1798	1778 SECTION 90. Section 51H of said chapter 111, as so appearing, is hereby amended by
1799	1799	1779striking out the definition of “Facility” and inserting in place thereof the following definition:
1800	1800	1780 “Facility”, a hospital, institution for the care of unwed mothers, clinic providing
1801	1801	1781ambulatory surgery as defined in section 25B, limited-service clinic licensed pursuant to section
1802	1802	178251J, office-based surgical center licensed pursuant to section 51M or urgent care center licensed
1803	1803	1783pursuant to section 51N.
1804	1804	1784 SECTION 91. Said section 51H of said chapter 111, as so appearing, is hereby further
1805	1805	1785amended by inserting after the definition of “Healthcare-associated infection” the following
1806	1806	1786definition:-
1807	1807	1787 “Operational impairment event”, any action, or notice of impending action, including a
1808	1808	1788notice of financial delinquency, concerning the repossession of medical equipment or supplies
1809	1809	1789necessary for the provision of patient care.
1810	1810	1790 SECTION 92. Subsection (b) of said section 51H of said chapter 111, as so appearing, is
1811	1811	1791hereby amended by adding the following paragraph:-
1812	1812	1792 An operational impairment event shall be reported by a facility to the department not later
1813	1813	1793than 1 calendar day after it occurs. Notwithstanding any general or special law to the contrary, no
1814	1814	1794contract between a facility and a lessor of medical equipment shall authorize the repossession of
1815	1815	1795medical equipment or supplies unless the lessor provides a notice of financial delinquency to the 84 of 119
1816	1816	1796department not less than 90 days prior to repossession of any medical equipment or supplies
1817	1817	1797necessary for the provision of patient care. Any provision of any contract or other document
1818	1818	1798between a lessor of medical equipment and a facility which does not comply with this paragraph
1819	1819	1799shall be void.
1820	1820	1800 SECTION 93. Said chapter 111 is hereby further amended by inserting after section 51L
1821	1821	1801the following 2 sections:-
1822	1822	1802 Section 51M. (a) As used in this section, the following words shall, unless the context
1823	1823	1803clearly requires otherwise, have the following meanings:-
1824	1824	1804 “Deep sedation”, a drug-induced depression of consciousness during which: (i) the
1825	1825	1805patient cannot be easily awakened but responds purposefully following repeated painful
1826	1826	1806stimulation; (ii) the patient’s ability to maintain independent ventilatory function may be
1827	1827	1807impaired; (iii) the patient may require assistance in maintaining a patent airway and spontaneous
1828	1828	1808ventilation may be inadequate; and (iv) the patient’s cardiovascular function is usually
1829	1829	1809maintained without assistance.
1830	1830	1810 “General anesthesia”, a drug-induced depression of consciousness during which: (i) the
1831	1831	1811patient is not able to be awakened, even by painful stimulation; (ii) the patient’s ability to
1832	1832	1812maintain independent ventilatory function is often impaired; (iii) the patient, in many cases, often
1833	1833	1813requires assistance in maintaining a patent airway and positive pressure ventilation may be
1834	1834	1814required because of depressed spontaneous ventilation or drug-induced depression of
1835	1835	1815neuromuscular function; and (iv) the patient’s cardiovascular function may be impaired. 85 of 119
1836	1836	1816 “Minimal sedation”, a drug-induced state during which: (i) patients respond normally to
1837	1837	1817verbal commands; (ii) cognitive function and coordination may be impaired; and (iii) ventilatory
1838	1838	1818and cardiovascular functions are unaffected.
1839	1839	1819 “Minor procedures”, (i) procedures that can be performed safely with a minimum of
1840	1840	1820discomfort where the likelihood of complications requiring hospitalization is minimal; (ii)
1841	1841	1821procedures performed with local or topical anesthesia; or (iii) liposuction with removal of less
1842	1842	1822than 500cc of fat under un-supplemented local anesthesia.
1843	1843	1823 “Moderate sedation”, a drug-induced depression of consciousness during which: (i) the
1844	1844	1824patient responds purposefully to verbal commands, either alone or accompanied by light tactile
1845	1845	1825stimulation; (ii) no interventions are required to maintain a patent airway; (iii) spontaneous
1846	1846	1826ventilation is adequate; and (iv) the patient’s cardiovascular function is usually maintained
1847	1847	1827without assistance.
1848	1848	1828 “Office-based surgical center”, an office, group of offices, a facility or any portion
1849	1849	1829thereof owned, leased or operated by 1 or more practitioners engaged in a solo or group practice,
1850	1850	1830however organized, whether conducted for profit or not for profit, which is advertised,
1851	1851	1831announced, established or maintained for the purpose of providing office-based surgical services;
1852	1852	1832provided, however, that “office-based surgical center” shall not include: (i) a hospital licensed
1853	1853	1833under section 51 or by the federal government; (ii) an ambulatory surgical center as defined
1854	1854	1834pursuant to section 25B and licensed under said section 51; or (iii) a surgical center performing
1855	1855	1835services in accordance with section 12M of chapter 112.
1856	1856	1836 “Office-based surgical services”, an ambulatory surgical or other invasive procedure
1857	1857	1837requiring: (i) general anesthesia; (ii) moderate sedation; or (iii) deep sedation and any liposuction 86 of 119
1858	1858	1838procedure, excluding minor procedures and procedures requiring minimal sedation, where such
1859	1859	1839surgical or other invasive procedure or liposuction is performed by a practitioner at an office-
1860	1860	1840based surgical center.
1861	1861	1841 (b) The department shall establish rules, regulations and practice standards for the
1862	1862	1842licensing of office-based surgical centers. In determining rules, regulations and practice
1863	1863	1843standards necessary for licensure as an office-based surgical center, the department may, at its
1864	1864	1844discretion, determine which regulations applicable to an ambulatory surgical center, as defined in
1865	1865	1845section 25B, shall apply to an office-based surgical center. The department shall consult with the
1866	1866	1846board of registration in medicine prior to promulgating regulations or establishing rules or
1867	1867	1847practice standards pursuant to this section.
1868	1868	1848 (c) The department shall issue for a term of 2 years and renew for a like term, a license to
1869	1869	1849maintain an office-based surgical center to an entity or organization that demonstrates to the
1870	1870	1850department that it is responsible and suitable to maintain such a center. An office-based surgical
1871	1871	1851center license shall list the specific locations on the premises where surgical services are
1872	1872	1852provided. In the case of the transfer of ownership of an office-based surgical center, the
1873	1873	1853application of the new owner for a license, when filed with the department on the date of transfer
1874	1874	1854of ownership, shall have the effect of a license for a period of 3 months.
1875	1875	1855 (d) An office-based surgical center license shall be subject to suspension, revocation or
1876	1876	1856refusal to issue or to renew for cause if, in its reasonable discretion, the department determines
1877	1877	1857that the issuance of such license would be inconsistent with the best interests of the public health,
1878	1878	1858welfare or safety. Nothing in this subsection shall limit the authority of the department to require 87 of 119
1879	1879	1859a fee, impose a fine, conduct surveys and investigations or to suspend, revoke or refuse to renew
1880	1880	1860a license issued pursuant to subsection (c).
1881	1881	1861 (e) Initial application and renewal fees for the license shall be established pursuant to
1882	1882	1862section 3B of chapter 7.
1883	1883	1863 (f) The department may impose a fine of up to $10,000 on a person or entity that
1884	1884	1864advertises, announces, establishes or maintains an office-based surgical center without a license
1885	1885	1865granted by the department. The department may impose a fine of not more than $10,000 on a
1886	1886	1866licensed office-based surgical center for violations of this section or any rule or regulation
1887	1887	1867promulgated pursuant to this section. Each day during which a violation continues shall
1888	1888	1868constitute a separate offense. The department may conduct surveys and investigations to enforce
1889	1889	1869compliance with this section.
1890	1890	1870 (g) Notwithstanding any general or special law or rule to the contrary, the department
1891	1891	1871may issue a 1-time provisional license to an applicant for an office-based surgical center licensed
1892	1892	1872pursuant to this section if such office-based surgical center holds: (i) a current accreditation from
1893	1893	1873the Accreditation Association for Ambulatory Health Care, American Association for
1894	1894	1874Accreditation of Ambulatory Surgery Facilities, Inc., or the Joint Commission On Accreditation
1895	1895	1875of Healthcare Organizations; or (ii) a current certification for participation in either Medicare or
1896	1896	1876Medicaid. The department may approve such a provisional application upon a finding of
1897	1897	1877responsibility and suitability and that the office-based surgical center meets all other licensure
1898	1898	1878requirements as determined by the department. Such provisional license issued to an office-based
1899	1899	1879surgical center shall not be extended or renewed. 88 of 119
1900	1900	1880 Section 51N. (a) As used in this section, the following words shall have the following
1901	1901	1881meanings unless the context clearly requires otherwise:-
1902	1902	1882 “Emergency services”, as defined in section 1 of chapter 6D.
1903	1903	1883 “Urgent care center”, a clinic owned or operated by an entity that is not corporately
1904	1904	1884affiliated with a hospital licensed under section 51, however organized, whether conducted for
1905	1905	1885profit or not for profit, that is advertised, announced, established or maintained for the purpose of
1906	1906	1886providing urgent care services in an office or a group of offices, or any portion thereof, or an
1907	1907	1887entity that is advertised, announced, established or maintained under a name that includes the
1908	1908	1888words “urgent care” or that suggests that urgent care services are provided therein and is not
1909	1909	1889corporately affiliated with a hospital licensed under 51; provided, however, that an urgent care
1910	1910	1890center shall not include: (i) a hospital licensed under said section 51 or operated by the federal
1911	1911	1891government or by the commonwealth; (ii) a clinic licensed under said section 51; (iii) a limited
1912	1912	1892service clinic licensed under section 51J; or (iv) a community health center receiving a grant
1913	1913	1893under 42 U.S.C. 254b.
1914	1914	1894 “Urgent care services”, a model of episodic care for the diagnosis, treatment,
1915	1915	1895management or monitoring of acute and chronic disease or injury that is: (i) for the treatment of
1916	1916	1896illness or injury that is immediate in nature but does not require emergency services; (ii)
1917	1917	1897provided on a walk-in basis without a prior appointment; (iii) available to the general public
1918	1918	1898during times of the day, weekends or holidays when primary care provider offices are not
1919	1919	1899customarily open; and (iv) not intended, and should not be used for, preventative or routine
1920	1920	1900services. 89 of 119
1921	1921	1901 (b) The department shall establish rules, regulations and practice standards for the
1922	1922	1902licensing of urgent care centers. In determining regulations and practice standards necessary for
1923	1923	1903licensure as an urgent care center, the department may, at its discretion, determine which
1924	1924	1904regulations applicable to a clinic licensed under section 51, shall apply to an urgent care center.
1925	1925	1905 (c) The department shall issue for a term of 2 years and renew for a like term, a license to
1926	1926	1906maintain an urgent care center to an entity or organization that demonstrates to the department
1927	1927	1907that it is responsible and suitable to maintain such an urgent care center. In the case of the
1928	1928	1908transfer of ownership of an urgent care center, the application of the new owner for a license,
1929	1929	1909when filed with the department on the date of transfer of ownership, shall have the effect of a
1930	1930	1910license for a period of 3 months.
1931	1931	1911 (d) An urgent care center license shall be subject to suspension, revocation or refusal to
1932	1932	1912issue or to renew for cause if, in its reasonable discretion, the department determines that the
1933	1933	1913issuance of such license would be inconsistent with or opposed to the best interests of the public
1934	1934	1914health, welfare or safety. Nothing in this subsection shall limit the authority of the department to
1935	1935	1915require a fee, impose a fine, conduct surveys and investigations or to suspend, revoke or refuse to
1936	1936	1916renew a license issued pursuant to subsection (c).
1937	1937	1917 (e) Initial application and renewal fees for the license shall be established pursuant to
1938	1938	1918section 3B of chapter 7.
1939	1939	1919 (f) The department may impose a fine of up to $10,000 on a person or entity that
1940	1940	1920advertises, announces, establishes or maintains an urgent care center without a license granted by
1941	1941	1921the department. The department may impose a fine of not more than $10,000 on a licensed
1942	1942	1922urgent care center for violations of this section or any rule or regulation promulgated pursuant to 90 of 119
1943	1943	1923this section. Each day during which a violation continues shall constitute a separate offense. The
1944	1944	1924department may conduct surveys and investigations to enforce compliance with this section.
1945	1945	1925 (g) Notwithstanding any general or special law or rule to the contrary, the department
1946	1946	1926may issue a 1-time provisional license to an applicant for an urgent care center if such urgent
1947	1947	1927care center holds: (i) a current accreditation from the Accreditation Association for Ambulatory
1948	1948	1928Health Care, Urgent Care Association of America or the Joint Commission On Accreditation of
1949	1949	1929Healthcare Organizations; or (ii) a current certification for participation in either Medicare or
1950	1950	1930Medicaid. The department may approve such provisional application upon a finding of
1951	1951	1931responsibility and suitability and that the urgent care center meets all other licensure
1952	1952	1932requirements as determined by the department. Such provisional license issued to an urgent care
1953	1953	1933center shall not be extended or renewed.
1954	1954	1934 SECTION 94. Said section 218 of said chapter 111, as so appearing, is hereby further
1955	1955	1935amended by striking out, in line 28, the words “Maintenance Organizations” and inserting in
1956	1956	1936place thereof the following word:- Plans.
1957	1957	1937 SECTION 95. Said chapter 111, as so appearing, is hereby further amended by inserting
1958	1958	1938after section 244 the following section:-
1959	1959	1939 Section 245. (a) Pursuant to section 23 of chapter 6D, a private equity firm shall deposit,
1960	1960	1940upon submission of a notice of material change pursuant to section 13 of chapter 6D, a bond with
1961	1961	1941the department of public health.
1962	1962	1942 (b) Until such bond has been deposited, the department of public health shall not issue a
1963	1963	1943license to such provider or provider organization under this chapter, the department of mental
1964	1964	1944health shall not issue a license to such provider or provider organization under chapter 19, and 91 of 119
1965	1965	1945any determination of need application submitted under sections 25B to 25G, inclusive, of said
1966	1966	1946chapter 111 or material change notice submitted under section 13 of chapter 6D shall be deemed
1967	1967	1947incomplete. Notwithstanding any general or special law to the contrary, if the bond has not been
1968	1968	1948deposited, but the department of public health would otherwise be eligible to collect the bond,
1969	1969	1949the department shall be permitted to collect from the private equity firm the amount it would
1970	1970	1950have been able to collect had the bond been deposited.
1971	1971	1951 (c) The health policy commission shall determine the amount of the bond, which shall
1972	1972	1952equal 1 year of the provider or provider organization’s average or estimated operating expenses,
1973	1973	1953plus the estimated cost of hiring an independent supervisor and reasonable staff to supervise and
1974	1974	1954facilitate collecting and spending the bond. The private equity firm shall maintain the bond for as
1975	1975	1955long as it has a financial interest in the provider or provider organization, and for 7 years
1976	1976	1956thereafter.
1977	1977	1957 (d) The department of public health may collect the bond if the health policy commission
1978	1978	1958provides the department of public health with notification pursuant to subsection (c) of section
1979	1979	195923 of chapter 6D, or if the provider or provider organization in which the private equity firm has
1980	1980	1960or had a financial interest declares bankruptcy. The department of public health, in consultation
1981	1981	1961with the health policy commission and the center for health information and analysis, shall use
1982	1982	1962the bond proceeds to support the continued provision of health services to patients served by the
1983	1983	1963provider or provider organization. Prior to spending the bond, the department of public health
1984	1984	1964shall seek input from the public, including, but not limited to, providers, provider organizations
1985	1985	1965and patients in the affected region, regarding how to spend the bond. The department of public
1986	1986	1966health may, in consultation with the health policy commission and center for health information 92 of 119
1987	1987	1967and analysis, select an independent supervisor and reasonable staff to supervise and facilitate
1988	1988	1968collecting and spending the bond.
1989	1989	1969 SECTION 96. Section 1 of chapter 112 of the General Laws, as so appearing, is hereby
1990	1990	1970amended by inserting after the third paragraph the following paragraph:-
1991	1991	1971 The commissioner of occupational licensure and the commissioner of public health shall
1992	1992	1972by regulation define the words “good moral character”, establish a standardized assessment of
1993	1993	1973“good moral character” for applicants for certification or licensure. Each of the boards of
1994	1994	1974registration and examination under supervision of the commissioner of occupational licensure
1995	1995	1975and the commissioner of public health shall apply said standard definition and assessment of
1996	1996	1976“good moral character” for applicants of certification or licensure. The commissioners shall hold
1997	1997	1977at least 1 public hearing seeking input on the standard definition and assessment of “good moral
1998	1998	1978character” for applicants of certification or licensure. In developing the standard definition and
1999	1999	1979assessment of “good moral character”, the commissioners shall consider factors including, but
2000	2000	1980not limited to: (i) the nature and gravity of any conduct that would cause concerns about an
2001	2001	1981applicant’s moral character, including whether the conduct demonstrates a disregard for the
2002	2002	1982welfare, safety or rights of another or disregard for honesty, integrity or trustworthiness; (ii) the
2003	2003	1983nature of the job; (iii) the length of time that has passed since the conduct; (iv) the circumstances
2004	2004	1984surrounding the conduct, including the age of the offender and contributing social conditions and
2005	2005	1985biases; (v) evidence of rehabilitation, including subsequent work history and character
2006	2006	1986references; and (vi) racial, ethnic and other inequities in the criminal justice system.
2007	2007	1987 SECTION 97. The sixth paragraph of section 2 of said chapter 112, as so appearing, is
2008	2008	1988hereby amended by striking out the last sentence and inserting in place thereof the following 93 of 119
2009	2009	1989sentence:- The renewal application shall be accompanied by a fee determined under the
2010	2010	1990aforementioned provision and shall include the physician’s name, license number, home address,
2011	2011	1991office address, specialties, the principal setting of their practice and whether they are an active or
2012	2012	1992inactive practitioner.
2013	2013	1993 SECTION 98. Said chapter 112 is hereby further amended by inserting after section 4 the
2014	2014	1994following 2 sections:-
2015	2015	1995 Section 4A. (a) For the purposes of this section and section 4B, the following words shall
2016	2016	1996have the following meanings unless the context clearly requires otherwise:
2017	2017	1997 “Clinician”, a physician, nurse, physician assistant, psychologist or independent clinical
2018	2018	1998social worker, who is licensed to provide health services and registered in the commonwealth
2019	2019	1999pursuant to this chapter to provide such services, and any other individual who is licensed to
2020	2020	2000provide health services and registered in the commonwealth pursuant to this chapter to provide
2021	2021	2001such services.
2022	2022	2002 “Clinician with independent practice authority”, a physician registered to practice
2023	2023	2003medicine in the commonwealth or a nurse practitioner, psychiatric nurse mental health clinical
2024	2024	2004specialist or nurse anesthetist who is registered to practice nursing in the commonwealth and
2025	2025	2005who has independent practice authority pursuant to sections 80E, 80H and 80J.
2026	2026	2006 “Health care practice”, a business, regardless of form, through which a clinician with
2027	2027	2007independent practice authority licensed by the board of registration in medicine or the board of
2028	2028	2008registration in nursing offers health services; provided, however, that “health care practice” shall
2029	2029	2009not include any entity that holds a license issued by the department of public health pursuant to
2030	2030	2010sections 51, 51M, 51N or 52 of chapter 111. 94 of 119
2031	2031	2011 “Management services organization”, a business that provides management or
2032	2032	2012administrative services to a provider or provider organization for compensation.
2033	2033	2013 “Nurse anesthetist”, an advanced practice registered nurse who is authorized advanced
2034	2034	2014nursing practice in the commonwealth pursuant to sections 80B and 80H.
2035	2035	2015 “Nurse practitioner”, an advanced practice registered nurse who is authorized in
2036	2036	2016advanced nursing practice in the commonwealth pursuant to sections 80B and 80E.
2037	2037	2017 “Physician”, a doctor of medicine or doctor of osteopathy who is registered to practice
2038	2038	2018medicine in the commonwealth pursuant to section 2.
2039	2039	2019 “Provider”, shall have the same definition as in section 1 of chapter 6D.
2040	2040	2020 “Provider organization”, shall have the same definition as in section 1 of chapter 6D;
2041	2041	2021provided, however, that for the purposes of this section, “provider organization” shall not include
2042	2042	2022a management services organization.
2043	2043	2023 “Psychiatric nurse mental health clinical specialist”, an advanced practice registered
2044	2044	2024nurse who is authorized in advanced nursing practice in the commonwealth pursuant to sections
2045	2045	202580B, 80E and 80J.
2046	2046	2026 (b) A clinician with independent practice authority may practice medicine or nursing at a
2047	2047	2027health care practice that is: (i) wholly owned and controlled by 1 or more clinicians with
2048	2048	2028independent practice authority who hold a certificate of registration that: (1) is issued by the
2049	2049	2029board of registration in medicine or the board of registration in nursing pursuant to the
2050	2050	2030requirements of sections 2 and 80B of this chapter; and (2) has not been suspended or revoked;
2051	2051	2031or (ii) conducted through a business organization, a majority share of which is owned by 95 of 119
2052	2052	2032clinicians with independent practice authority or a provider or provider organization, and which
2053	2053	2033is formed as: (1) a professional corporation pursuant to chapter 156A; (2) a nonprofit
2054	2054	2034organization, a nonprofit hospital services corporation organized under chapter 176A or a
2055	2055	2035nonprofit medical services corporation organized under chapter 176B; (3) a limited liability
2056	2056	2036company organized under chapter 156C; provided, however, that there are no limited liability
2057	2057	2037company’s provisions limiting or eliminating the licensee's liability for intentional tort or
2058	2058	2038negligence; (4) a partnership organized under chapter 108A, including, but not limited to, a
2059	2059	2039registered limited liability partnership; provided, however, that the partnership has no provisions
2060	2060	2040limiting or eliminating the licensee's liability for intentional torts or negligence; or (5) an
2061	2061	2041organization similar to those organizations described in clauses (i) to (iv), inclusive, and
2062	2062	2042organized under a comparable law of any other jurisdiction within the United States; provided,
2063	2063	2043however, that a majority share of the organization shall be owned by clinicians with independent
2064	2064	2044practice authority or a provider organization.
2065	2065	2045 (c) It shall constitute the unauthorized practice of medicine in violation of section 6 for
2066	2066	2046any person or entity, on their own or in combination with another person or entity, to own a
2067	2067	2047majority share in a health care practice other than provider or provider organization that is
2068	2068	2048substantially engaged in delivering health care to patients in the commonwealth or a clinician
2069	2069	2049with independent practice authority who: (i) holds a certificate of registration that is issued by
2070	2070	2050the board of registration in medicine or the board of registration in nursing pursuant to the
2071	2071	2051requirements of sections 2 or 80B and has not been suspended or revoked; and (ii) is
2072	2072	2052substantially engaged in delivering health care to patients in the commonwealth through the
2073	2073	2053practice or managing of the health care practice. This section shall not apply to a health care 96 of 119
2074	2074	2054facility or entity that holds a license issued by the department of public health pursuant to
2075	2075	2055sections 51, 51M, 51N or 52 of chapter 111.
2076	2076	2056 (d)(1) Nothing in this section shall prohibit a clinician with independent practice
2077	2077	2057authority from practicing medicine or nursing as an employee of a health care facility or entity
2078	2078	2058that holds a license issued by the department of public health pursuant to sections 51, 51M, 51N
2079	2079	2059or 52 of chapter 111.
2080	2080	2060 (2) Health care facilities or entities that hold a license issued by the department of public
2081	2081	2061health pursuant to sections 51, 51M, 51N or 52 of chapter 111, providers and provider
2082	2082	2062organizations shall not, themselves or through a management services organization that the
2083	2083	2063provider organization fully or partially owns or controls, directly or indirectly interfere with,
2084	2084	2064control or otherwise direct the professional judgment or clinical decisions of clinicians with
2085	2085	2065independent practice authority who receive compensation, including, but not limited to, as
2086	2086	2066employees or independent contractors, from the health care facility, provider, provider
2087	2087	2067organization or an entity that the provider organization fully or partially owns or controls.
2088	2088	2068Conduct prohibited under this paragraph shall include, but not be limited to, controlling, either
2089	2089	2069directly or indirectly, through discipline, punishment, threats, adverse employment actions,
2090	2090	2070coercion, retaliation or excessive pressure, regarding: (i) the amount of time spent with patients,
2091	2091	2071including the time permitted to triage patients in the emergency department or evaluate admitted
2092	2092	2072patients; (ii) the time period within which a patient must be discharged; (iii) decisions involving
2093	2093	2073the patient’s clinical status, including, but not limited to, whether the patient should be kept in
2094	2094	2074observation status, whether the patient should receive palliative care and where the patient
2095	2095	2075should be placed upon discharge; (iv) the diagnosis, diagnostic terminology or codes that are
2096	2096	2076entered into the medical record; or (v) any other conduct the department of public health 97 of 119
2097	2097	2077determines by regulation would interfere with, control or otherwise direct the professional
2098	2098	2078judgement or clinical decisions of clinicians with independent practice authority. Such health
2099	2099	2079care facilities or entities shall not limit the range of clinical orders available to clinicians either
2100	2100	2080directly or by configuring the medical record to prohibit or significantly limit the clinical order
2101	2101	2081options available. Nondisclosure or non-disparagement agreements regarding subsections (i)
2102	2102	2082through (v), inclusive, between clinicians with independent practice authority and health care
2103	2103	2083facilities or entities that hold a license issued by the department of public health pursuant to
2104	2104	2084sections 51, 51M, 51N or 52 of chapter 111, providers, provider organizations or their corporate
2105	2105	2085affiliates shall be considered void and unenforceable. If a court of competent jurisdiction finds a
2106	2106	2086policy, contract or contract provision void and unenforceable pursuant to this section, the court
2107	2107	2087shall award the plaintiff reasonable attorney’s fees and costs. Nothing in this section shall limit
2108	2108	2088the ability of any person to bring any action relating to defamation, disclosure of confidential or
2109	2109	2089proprietary information or trade secrets or similar torts.
2110	2110	2090 (e) All health care practices shall provide written certification that the health care practice
2111	2111	2091meets the requirements in this section to the board of registration in medicine or the board of
2112	2112	2092registration in nursing at the time of formation and on a biennial basis thereafter. If a health care
2113	2113	2093practice’s owners consist of individuals registered solely with the board of registration in
2114	2114	2094medicine or the board of registration in nursing, the health care practice shall provide the
2115	2115	2095certification to the applicable board. If the practice’s owners consist of individuals registered
2116	2116	2096with both boards, the health care practice shall provide the certification to the board of
2117	2117	2097registration in medicine, which shall transmit a copy to the board of registration in nursing.
2118	2118	2098Health care practices shall, at the time that such clinicians with independent practice authority
2119	2119	2099are hired or affiliated with the practice and within 30 days of providing certification to the 98 of 119
2120	2120	2100applicable board pursuant to this section, provide a copy of the most recent certification to all
2121	2121	2101clinicians with independent practice authority who: (i) engage in providing health services at the
2122	2122	2102health center practice; and (ii) do not hold any ownership interest in the health center practice.
2123	2123	2103 (f) Health care practices shall file with the applicable board a registration application
2124	2124	2104containing such information as the board may reasonably require, including, but not limited to:
2125	2125	2105(i) the identity of the applicant and of the clinicians with independent practice authority which
2126	2126	2106constitute the practice; (ii) any management services organization under contract with the health
2127	2127	2107care practice; (iii) a certified copy of the health care practice’s certificate of organization, if any,
2128	2128	2108as filed with the secretary of the commonwealth, or any applicable partnership agreement; (iv)
2129	2129	2109the address of the health care practice; (v) the services provided by the health care practice; and
2130	2130	2110(vi) any information the board, in consultation with the health policy commission and the center
2131	2131	2111for health information and analysis, deems relevant for the state health plan and focused
2132	2132	2112assessments pursuant to section 22 of chapter 6D and the health care resources inventory
2133	2133	2113pursuant to section 9 of chapter 12C. The application shall be accompanied by a fee in an amount
2134	2134	2114to be determined pursuant to section 3B of chapter 7. All health care practices registered in the
2135	2135	2115commonwealth shall renew their certificates of registration with the applicable board every 2
2136	2136	2116years. The board shall share information relevant to the state health plan and focused
2137	2137	2117assessments pursuant to section 22 of chapter 6D with the commission and information relevant
2138	2138	2118to the health care resources inventory pursuant to section 9 of section 12C with the center.
2139	2139	2119 (g) All health care practices with more than 1 clinician with independent practice
2140	2140	2120authority that constitutes the practice shall designate a clinician with independent practice
2141	2141	2121authority at the practice to serve as health care director; provided, however, that the designated
2142	2142	2122clinician shall hold a certificate of registration that: (i) is issued by the board of registration in 99 of 119
2143	2143	2123medicine or the board of registration in nursing pursuant to the requirements of sections 2 or
2144	2144	212480B; and (ii) has not been suspended or revoked. The director shall be responsible for
2145	2145	2125implementing policies and procedures to ensure compliance with local ordinances and state and
2146	2146	2126federal laws and regulations governing the practice of medicine or the practice of nursing,
2147	2147	2127including regulations promulgated and policies established by the applicable board. The board
2148	2148	2128may impose discipline against the licenses of the director and clinicians with independent
2149	2149	2129practice authority who own and control the health care practice for failure of the health care
2150	2150	2130practice to comply with local ordinances and state and federal laws and regulations governing the
2151	2151	2131practice of medicine or the practice of nursing, including regulations promulgated and policies
2152	2152	2132established by the applicable board.
2153	2153	2133 (h) The board of registration in medicine and board of registration in nursing may
2154	2154	2134promulgate regulations to establish minimum requirements for the conduct of a health care
2155	2155	2135practice, including, but not limited to: (i) compliance with section 4A; (ii) maintenance and
2156	2156	2136access to medical records; and (iii) in the event of a planned closure of the health care practice or
2157	2157	2137an unplanned event that prevents the health care practice from continuing operations, the
2158	2158	2138development of a continuity plan to: (1) ensure access to medical records, (2) provide notice to
2159	2159	2139patients; and (3) assist patients with transitioning to a new provider. If a practice’s owners
2160	2160	2140consist of individuals registered solely with the board of registration in medicine or the board of
2161	2161	2141registration in nursing, the practice shall comply with the applicable board’s regulations. If the
2162	2162	2142practice’s owners consist of individuals registered with both boards, the practice shall comply
2163	2163	2143with the regulations issued by the board of registration in medicine. Each board shall consult
2164	2164	2144with the other when promulgating regulations. 100 of 119
2165	2165	2145 Section 4B. (a) It shall be a violation of this section for a management services
2166	2166	2146organization to exercise control over clinical decisions. A management services organization, or
2167	2167	2147any other organization that is not a health care practice, that does any of the following shall be
2168	2168	2148considered to have control over the clinical decisions of the health care practice: (i) managing,
2169	2169	2149supervising, evaluating or recommending promotion or discipline of any owner of or clinician
2170	2170	2150with independent practice authority associated with the health care practice; (ii) negotiating with
2171	2171	2151third-party payers on behalf of a health care practice without first obtaining informed consent
2172	2172	2152from the health care practice’s owners; (iii) advertising or otherwise presenting as a health care
2173	2173	2153practice or provider of health care services; or (iv) performing any other functions that the
2174	2174	2154department of public health determines, by regulation, confers to a management services
2175	2175	2155organization or any other entity that is not a health care practice the ability to control the clinical
2176	2176	2156decisions of the health care practice or its clinicians with independent practice authority.
2177	2177	2157 (b) A health care practice shall maintain ultimate decision-making authority over: (i)
2178	2178	2158personnel decisions involving clinicians, including, but not limited to, employment status,
2179	2179	2159compensation, hours or working conditions; (ii) coding or billing decisions; (iii) the selection and
2180	2180	2160use of property, including, but not limited to, real property, medical equipment or medical
2181	2181	2161supplies; (iv) the number of patients seen in a given period of time or the amount of time spent
2182	2182	2162with each patient; (v) the appropriate diagnostic test for medical conditions; (vi) the use of
2183	2183	2163patient medical records; (vii) referral decisions; or (viii) any other function or decision that the
2184	2184	2164department of public health determines, by regulation, confers to a management services
2185	2185	2165organization or any other entity that is not a health care practice the ability to control the clinical
2186	2186	2166decisions of a health care practice or its clinicians with independent practice authority. 101 of 119
2187	2187	2167 (c) It shall be a violation of this section for a management services organization or any
2188	2188	2168other entity that is not a health care practice to include in an agreement with any health care
2189	2189	2169practice provisions that would: (i) restrict the ability of the health care practice or practice owner
2190	2190	2170to exercise complete, unfettered control and discretion over the finances or capital of the health
2191	2191	2171care practice, including, but not limited to, restricting the ability to create, buy or sell stock, issue
2192	2192	2172dividends or sell the health care practice; (ii) restrict the ability of a person who owns stock in
2193	2193	2173the health care practice to transfer, alienate or otherwise exercise unfettered discretion and
2194	2194	2174control over their stock; (iii) restrict in any way the ability of the health care practice or
2195	2195	2175clinicians with independent practice authority associated with the health care practice to provide
2196	2196	2176health care services in any place, for any entity or in any form otherwise permitted by law; (iv)
2197	2197	2177restrict the ability of the health care practice to contract with another management services
2198	2198	2178organization for management or administrative services upon expiration of the current contract;
2199	2199	2179(v) limit the ability of the health care practice or the practice’s owners, employees or agents to
2200	2200	2180publicly discuss the business relationship between the health care practice and the management
2201	2201	2181services organization; provided, however, that this provision shall not limit the ability of any
2202	2202	2182person to bring any action relating to defamation, disclosure of confidential or proprietary
2203	2203	2183information or trade secrets or similar torts; (vi) limit access to, take control from or otherwise
2204	2204	2184obscure from any clinicians providing services in connection with the health care practice, the
2205	2205	2185price, rate or amount of the charges for their services; (vii) establish, supervise, manage or
2206	2206	2186otherwise control the health care practice’s officers or directors; or (viii) create any other
2207	2207	2187situation the department of public health determines, by regulation, could create the possibility of
2208	2208	2188allowing the management services organization to control the clinical decisions of the health care
2209	2209	2189practice. 102 of 119
2210	2210	2190 (d) No management services organization shall have any ownership interest in or direct
2211	2211	2191or indirect control over health care practices for which the management services organization
2212	2212	2192provides services. No health care practice shall have any ownership interest in or direct or
2213	2213	2193indirect control over a management services organization unless the management services
2214	2214	2194organization is fully owned, alone or in combination, by: (i) health care practices substantially
2215	2215	2195engaged in delivering health care to patients in the commonwealth; (ii) clinicians with
2216	2216	2196independent practice authority who both: (1) hold a certificate of registration that is issued by the
2217	2217	2197board of registration in medicine or the board of registration in nursing pursuant to the
2218	2218	2198requirements of sections 2 and 80B and has not been suspended or revoked; and (2) are
2219	2219	2199substantially engaged in delivering health care to patients in the commonwealth; or (iii) provider
2220	2220	2200organizations. For the purposes of this subsection, a de minimis interest in a publicly traded
2221	2221	2201company held in a mutual fund, index fund or similar financial instrument shall not be
2222	2222	2202considered an ownership interest.
2223	2223	2203 (e) No person may serve as a director, officer, employee or contractor for both a
2224	2224	2204management services organization and a health care practice for which the management services
2225	2225	2205organization provides services; provided, however, that this subsection shall not apply when the
2226	2226	2206management services organization is fully owned, alone or in combination, by: (i) health care
2227	2227	2207practices substantially engaged in delivering health care to patients in the commonwealth; (ii)
2228	2228	2208clinicians with independent practice authority who both: (1) hold a certificate of registration that
2229	2229	2209is issued by the board of registration in medicine or the board of registration in nursing pursuant
2230	2230	2210to the requirements of sections 2 and 80B and has not been suspended or revoked; and (2) are
2231	2231	2211substantially engaged in delivering health care to patients in the commonwealth; or (iii) provider
2232	2232	2212organizations. 103 of 119
2233	2233	2213 (f) A violation of this section shall constitute the unauthorized practice of medicine in
2234	2234	2214violation of section 6 or the unauthorized practice of nursing in violation of section 80E, 80H or
2235	2235	221580J. Any provision of a contract or agreement that has the effect of violating this section shall be
2236	2236	2216void and unenforceable. If a court of competent jurisdiction finds a policy, contract or contract
2237	2237	2217provision void and unenforceable pursuant to this section, the court shall award the plaintiff
2238	2238	2218reasonable attorney’s fees and costs.
2239	2239	2219 (g) The department of public health, in consultation with the health policy commission,
2240	2240	2220shall promulgate regulations to effectuate the purposes of this section.
2241	2241	2221 SECTION 99. Section 1 of chapter 175 of the General Laws, as so appearing, is hereby
2242	2242	2222amended by inserting after the definition of “Foreign company” the following definition:-
2243	2243	2223 “Health insurance company”, a company that engages in the business of health insurance.
2244	2244	2224 SECTION 100. Said section 1 of said chapter 175, as so appearing, is hereby further
2245	2245	2225amended by inserting after the definition of “Net value of policies” the following definition:-
2246	2246	2226 “Party of record”, for the purpose of a review by the commissioner of a written
2247	2247	2227agreement for a merger or consolidation of 2 or more health insurance companies, the health
2248	2248	2228policy commission, the center for health information and analysis, the attorney general, the
2249	2249	2229center for health information and analysis and any government agency with relevant oversight or
2250	2250	2230licensure authority over the proposed project or components therein.
2251	2251	2231 SECTION 101. The fourth paragraph of section 5 of chapter 176A of the General Laws,
2252	2252	2232as so appearing, is hereby amended by inserting after the fourth sentence the following
2253	2253	2233sentence:- In determining whether rates of payment under this section are excessive, the 104 of 119
2254	2254	2234commissioner shall consider the affordability for consumers and purchasers of health insurance
2255	2255	2235products; provided, however, that the commissioner shall not disapprove a carrier’s rates solely
2256	2256	2236on the basis of the affordability standard.
2257	2257	2237 SECTION 102. The second paragraph of section 6 of said chapter 176A, as so appearing,
2258	2258	2238is hereby amended by adding the following sentence:- In determining whether the rates of
2259	2259	2239payment under a contract are excessive under this section, the commissioner shall consider the
2260	2260	2240affordability for consumers and purchasers of health insurance products; provided, however, that
2261	2261	2241the commissioner shall not disapprove a carrier’s rates solely on the basis of the affordability
2262	2262	2242standard.
2263	2263	2243 SECTION 103. The third paragraph of section 10 of said chapter 176A, as so appearing,
2264	2264	2244is hereby amended by inserting after the first sentence the following sentence:- In determining
2265	2265	2245whether the rates of payment under a contract are excessive under this section, the commissioner
2266	2266	2246shall consider the affordability for consumers and purchasers of health insurance products;
2267	2267	2247provided, however, that the commissioner shall not disapprove a carrier’s rates solely on the
2268	2268	2248basis of the affordability standard.
2269	2269	2249 SECTION 104. The second paragraph of section 4 of chapter 176B of the General Laws,
2270	2270	2250as so appearing, is hereby amended by inserting after the second sentence the following
2271	2271	2251sentence:- In determining whether the rates of payment under an agreement are excessive under
2272	2272	2252this section, the commissioner shall consider the affordability for consumers and purchasers of
2273	2273	2253health insurance products; provided, however, that the commissioner shall not disapprove a
2274	2274	2254carrier’s rates solely on the basis of the affordability standard. 105 of 119
2275	2275	2255 SECTION 105. The first paragraph of section 16 of chapter 176G of the General Laws,
2276	2276	2256as so appearing, is hereby amended by inserting after the second sentence the following
2277	2277	2257sentence:- In determining whether the rates of payment under a contract are excessive under this
2278	2278	2258section, the commissioner shall consider the affordability for consumers and purchasers of health
2279	2279	2259insurance products; provided, however, that the commissioner shall not disapprove a carrier’s
2280	2280	2260rates solely on the basis of the affordability standard.
2281	2281	2261 SECTION 106. Subsection (c) of section 6 of chapter 176J of the General Laws, as so
2282	2282	2262appearing, is hereby amended by inserting after the second sentence the following sentence:- In
2283	2283	2263determining whether the proposed changes to base rates of payment are excessive under this
2284	2284	2264section, the commissioner shall consider the affordability for consumers and purchasers of health
2285	2285	2265insurance products; provided, however, that the commissioner shall not disapprove a carrier’s
2286	2286	2266proposed changes to base rates solely on the basis of the affordability standard.
2287	2287	2267 SECTION 107. The second paragraph of subsection (g) of section 7 of chapter 176K of
2288	2288	2268the General Laws, as so appearing, is hereby amended by adding the following sentence:- In
2289	2289	2269determining whether rates of payment are excessive under this section, the commissioner shall
2290	2290	2270consider the affordability for consumers and purchasers of health insurance products; provided,
2291	2291	2271however, that the commissioner shall not disapprove a carrier’s rates solely on the basis of the
2292	2292	2272affordability standard.
2293	2293	2273 SECTION 108. Section 12 of chapter 176O of the General Laws, as so appearing, is
2294	2294	2274amended by adding the following subsections:-
2295	2295	2275 (g) For an insured member who is stable on a treatment, service or course of medication
2296	2296	2276as determined by a health care provider and approved for coverage by a previous carrier or health 106 of 119
2297	2297	2277benefit plan, a carrier or utilization review organization shall not restrict coverage of such
2298	2298	2278treatment, service or course of medication for at least 90 days upon the insured member’s
2299	2299	2279enrollment unless the previously approved admission, procedure, treatment, service or course of
2300	2300	2280medication is not a covered benefit under the insured member’s new plan; provided, however,
2301	2301	2281that a carrier may condition coverage of continued treatment by a provider under this subsection
2302	2302	2282upon the provider’s agreeing to accept reimbursement from the carrier at the average in-network
2303	2303	2283rate and not to impose cost sharing with respect to the insured in an amount that would exceed
2304	2304	2284the cost sharing imposed if the provider were in network.
2305	2305	2285 (h) Preauthorization approval issued by a carrier for a prescribed maintenance medication
2306	2306	2286shall be valid for the length of the prescription, as written by the prescriber, up to 1 year. For the
2307	2307	2287purposes of this section, “maintenance medication” shall mean a prescribed treatment services,
2308	2308	2288or course of medication intended for chronic disease management.
2309	2309	2289 SECTION 109. The General Laws are hereby amended by inserting after chapter 176X
2310	2310	2290the following chapter:-
2311	2311	2291 Chapter 176Y. LICENSING AND REGULATION OF PHARMACY BENEFIT
2312	2312	2292MANAGERS.
2313	2313	2293 Section 1. As used in this chapter, the following words shall have the following meanings
2314	2314	2294unless the context clearly requires otherwise:
2315	2315	2295 “Carrier”, an insurer licensed or otherwise authorized to transact accident or health
2316	2316	2296insurance under chapter 175, a nonprofit hospital service corporation organized under chapter
2317	2317	2297176A, a nonprofit medical service corporation organized under chapter 176B, a health
2318	2318	2298maintenance organization organized under chapter 176G or an organization entering into a 107 of 119
2319	2319	2299preferred provider arrangement under chapter 176I; provided, however, that “carrier” shall not
2320	2320	2300include an employer purchasing coverage or acting on behalf of its employees or the employees
2321	2321	2301of a subsidiary or affiliated corporation of the employer; and provided further, that unless
2322	2322	2302otherwise provided, “carrier” shall not include any entity to the extent it offers a policy,
2323	2323	2303certificate or contract that provides coverage solely for dental care services or vision care
2324	2324	2304services.
2325	2325	2305 “Center”, the center for health information and analysis established under chapter 12C.
2326	2326	2306 “Commissioner”, the commissioner of insurance.
2327	2327	2307 “Division”, the division of insurance.
2328	2328	2308 “Health benefit plan”, a contract, certificate or agreement entered into, offered or issued
2329	2329	2309by a carrier to provide, deliver, arrange for, pay for or reimburse any of the costs of health care
2330	2330	2310services; provided, however, that the commissioner may, by regulation, define other health
2331	2331	2311coverage as a “health benefit plan” for the purposes of this chapter.
2332	2332	2312 “Pharmacy”, a physical or electronic facility under the direction or supervision of a
2333	2333	2313registered pharmacist that is authorized to dispense prescription drugs and has entered into a
2334	2334	2314network contract with a pharmacy benefit manager or a carrier.
2335	2335	2315 “Pharmacy benefit manager”, a person, business or other entity, however organized, that
2336	2336	2316directly or through a subsidiary provides pharmacy benefit management services for prescription
2337	2337	2317drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self-
2338	2338	2318insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit
2339	2339	2319management services shall include, but not be limited to: (i) the processing and payment of 108 of 119
2340	2340	2320claims for prescription drugs; (ii) the performance of drug utilization review; (iii) the processing
2341	2341	2321of drug prior authorization requests; (iv) pharmacy contracting; (v) the adjudication of appeals or
2342	2342	2322grievances related to prescription drug coverage contracts; (vi) formulary administration; (vii)
2343	2343	2323drug benefit design; (viii) mail and specialty drug pharmacy services; (ix) cost containment; (x)
2344	2344	2324clinical, safety and adherence programs for pharmacy services; and (xi) management of the cost
2345	2345	2325of covered prescription drugs; and provided further, that “pharmacy benefit manager” shall not
2346	2346	2326include a health benefit plan sponsor unless otherwise specified by the division.
2347	2347	2327 Section 2. (a) No person, business or other entity shall establish or operate as a pharmacy
2348	2348	2328benefit manager without obtaining a license from the division pursuant to this section. A license
2349	2349	2329may be granted if the division is satisfied that the applicant possesses the necessary organization,
2350	2350	2330background expertise and financial integrity to supply the services sought to be offered. A
2351	2351	2331pharmacy benefit manager license shall be valid for a period of 3 years and shall be renewable
2352	2352	2332for additional 3-year periods. The commissioner shall charge application and renewal fees in the
2353	2353	2333amount of $25,000. In no event may these fees, when combined with the assessment of
2354	2354	2334pharmacy benefit managers in section 6 of chapter 6D and section 7 of chapter 12C, exceed the
2355	2355	2335commonwealth’s estimated operating expenses of the pharmacy benefit manager licensure
2356	2356	2336program.
2357	2357	2337 (b) A license granted pursuant to this section and any rights or interests therein shall not
2358	2358	2338be transferable.
2359	2359	2339 (c) A person, business or other entity licensed as a pharmacy benefit manager shall
2360	2360	2340submit data and reporting information to the center according to the standards and methods
2361	2361	2341specified by the center pursuant to section 10A of chapter 12C. 109 of 119
2362	2362	2342 (d) The division may issue or renew a license pursuant to this section, subject to
2363	2363	2343restrictions in order to protect the interests of consumers. Such restrictions may include: (i)
2364	2364	2344limiting the type of services that a license holder may provide; (ii) limiting the activities in which
2365	2365	2345the license holder may be engaged; or (iii) addressing conflicts of interest between pharmacy
2366	2366	2346benefit managers and health plan sponsors.
2367	2367	2347 (e) The division shall develop an application for the licensure of pharmacy benefit
2368	2368	2348managers that shall include, but not be limited to: (i) the name of the applicant or pharmacy
2369	2369	2349benefit manage; (ii) the address and contact telephone number for the applicant; (iii) the name
2370	2370	2350and address of the agent of the applicant or pharmacy benefit manager for service of process in
2371	2371	2351the commonwealth; (iv) the name and address of any person with management or control over
2372	2372	2352the applicant or pharmacy benefit manager; and (v) any audited financial statements specific to
2373	2373	2353the applicant or pharmacy benefit manager. An applicant or pharmacy benefit manager shall
2374	2374	2354inform the division any material change to the information contained in its application, certified
2375	2375	2355by an officer of the applicant, within 30 days of such a change; provided, however, that, once
2376	2376	2356licensed, a pharmacy benefit manager shall inform the division of any material change to the
2377	2377	2357information contained in its application, certified by an officer of the pharmacy benefit manager.
2378	2378	2358 (f) The division may suspend, revoke, refuse to issue or renew or place on probation an
2379	2379	2359application or pharmacy benefit manager license for cause, which shall include, but not be
2380	2380	2360limited to: (i) the applicant or pharmacy benefit manager engaging in fraudulent activity that is
2381	2381	2361found by a court of law to be a violation of state or federal law; (ii) the division receiving
2382	2382	2362consumer complaints that justify an action under this chapter to protect the health, safety and
2383	2383	2363interests of consumers; (iii) the applicant or pharmacy benefit manager failing to pay an
2384	2384	2364application or renewal fee for a license; (iv) the applicant or pharmacy benefit manager failing to 110 of 119
2385	2385	2365comply with reporting requirements of the center under section 10A of chapter 12C; or (v) the
2386	2386	2366applicant or pharmacy benefit manager failing to comply with a requirement of this chapter.
2387	2387	2367 The division shall provide written notice to the applicant or pharmacy benefit manager
2388	2388	2368and advise in writing of the reason for any suspension, revocation, refusal to issue or renew or
2389	2389	2369placement on probation of an application or pharmacy benefit manager license. A copy of the
2390	2390	2370notice shall be forwarded to the center. The applicant or pharmacy benefit manager may make a
2391	2391	2371written demand upon the division within 30 days of receipt of such notice for a hearing before
2392	2392	2372the division to determine the reasonableness of the division’s action. The hearing shall be held
2393	2393	2373pursuant to chapter 30A.
2394	2394	2374 The division shall not suspend or cancel a license unless the division has first afforded
2395	2395	2375the pharmacy benefit manager an opportunity for a hearing pursuant to said chapter 30A.
2396	2396	2376 (g) If a person, business or other entity performs the functions of a pharmacy benefit
2397	2397	2377manager in violation of this chapter, the person, business or other entity shall be subject to a fine
2398	2398	2378of $5,000 per day for each day that the person, business or other entity is found to be in violation.
2399	2399	2379 (h) A pharmacy benefit manager licensed under this section shall notify a health carrier
2400	2400	2380client in writing of any activity, policy, practice contract or arrangement of the pharmacy benefit
2401	2401	2381manager that directly or indirectly presents any conflict of interest to the pharmacy benefit
2402	2402	2382manager’s relationship with or obligation to the health carrier client.
2403	2403	2383 (i) The division shall promulgate regulations and adopt policies and procedures necessary
2404	2404	2384to implement this section. 111 of 119
2405	2405	2385 SECTION 110. There shall be a task force to: (i) study primary care access, delivery and
2406	2406	2386payment in the commonwealth; (ii) develop and issue recommendations to stabilize and
2407	2407	2387strengthen the primary care system and the primary care workforce; and (iii) increase the
2408	2408	2388financial investment in and patient access to primary care across the commonwealth.
2409	2409	2389 (b) The task force shall consist of: the secretary of health and human services or a
2410	2410	2390designee, who shall serve as co-chair; the executive director of the health policy commission or a
2411	2411	2391designee, who shall serve as co-chair; the assistant secretary for MassHealth or a designee; the
2412	2412	2392executive director of the center for health information and analysis or a designee; the
2413	2413	2393commissioner of insurance or a designee; the chairs of the joint committee on health care
2414	2414	2394financing or their designees; 1 member from the Massachusetts Academy of Family Physicians,
2415	2415	2395Inc.; 1 member from the Massachusetts Chapter of the American Academy of Pediatrics; 1
2416	2416	2396member from the Massachusetts Medical Society with expertise in primary care; 1 member from
2417	2417	2397the Massachusetts Coalition of Nurse Practitioners, Inc. with expertise in primary care or in
2418	2418	2398delivering care in a community health center; 1 member from the Massachusetts Association of
2419	2419	2399Physician Assistants, Inc. with expertise in primary care; 1 member from the National
2420	2420	2400Association of Social Workers, Inc. – Massachusetts Chapter with expertise in behavioral health
2421	2421	2401in a primary care setting; 1 member from the Massachusetts League of Community Health
2422	2422	2402Centers, Inc.; 1 member from the Massachusetts Health and Hospital Association, Inc.; 1
2423	2423	2403member from the Massachusetts Association of Health Plans, Inc.; 1 member from Blue Cross
2424	2424	2404and Blue Shield of Massachusetts, Inc.; 1 member from the Association Industries of
2425	2425	2405Massachusetts; 1 member from the Retailers Association of Massachusetts, Inc.; 1 member from
2426	2426	2406Health Care For All, Inc.; 1 member from the Massachusetts Chapter of the American College of 112 of 119
2427	2427	2407Physicians; 1 member from the Massachusetts Primary Care Alliance for Patients; and 1 member
2428	2428	2408from Massachusetts Health Quality Partners, Inc.
2429	2429	2409 (c) The task force shall develop recommendations to: (i) define primary care services,
2430	2430	2410codes and providers; (ii) develop a standardized set of data reporting requirements for private
2431	2431	2411and public health care payers, providers and provider organizations to enable the commonwealth
2432	2432	2412and private and public health care payers to track payments for primary care services, including,
2433	2433	2413but not limited to, fee-for-service, prospective payments, value-based payments and grants to
2434	2434	2414primary care providers, fees levied on a primary care provider by a provider organization or
2435	2435	2415hospital system of which the primary care provider is affiliated and provider spending on
2436	2436	2416primary care services; (iii) establish a primary care spending target for private and public health
2437	2437	2417care payers that reflects the cost to deliver evidence-based, equitable and culturally competent
2438	2438	2418primary care; (iv) propose payment models to increase private and public reimbursement for
2439	2439	2419primary care services; (v) assess the impact of health plan design on health equity and patient
2440	2440	2420access to primary care services; (vi) monitor and track the needs of and service delivery to
2441	2441	2421residents of the commonwealth; and (vii) create a short-term and long-term workforce
2442	2442	2422development plan to increase the supply and distribution of and improve working conditions of
2443	2443	2423primary care clinicians and other primary care workers. The task force may make additional
2444	2444	2424recommendations and propose legislation necessary to carry out its recommendations.
2445	2445	2425 (d) The task force shall, in consultation with the center for health information and
2446	2446	2426analysis, define the data required to satisfy the contents of this section. The center for health
2447	2447	2427information and analysis shall adopt regulations to require providers and private and public
2448	2448	2428health care payers to submit data or information necessary for the task force to fulfill its duties
2449	2449	2429with this section. Any data collected shall be public and available through the Massachusetts 113 of 119
2450	2450	2430Primary Care Dashboard maintained by the center and Massachusetts Health Quality Partners,
2451	2451	2431Inc.
2452	2452	2432 (e) Not later than March 15, 2025, the task force shall issue its report of the findings and
2453	2453	2433recommendations under clauses (i) and (ii) of subsection (c) with the clerks of the senate and the
2454	2454	2434house of representatives, the senate and house committees on ways and means, the joint
2455	2455	2435committee on health care financing, the center for health information and analysis, the health
2456	2456	2436policy commission and the division of insurance.
2457	2457	2437 (f) Not later than June 15, 2025, the task force shall issue its report of the findings and
2458	2458	2438recommendations under clause (iii) of subsection (c) with the clerks of the senate and the house
2459	2459	2439of representatives, the senate and house committees on ways and means, the joint committee on
2460	2460	2440health care financing, the center for health information and analysis, the health policy
2461	2461	2441commission and the division of insurance.
2462	2462	2442 (g) Not later than September 15, 2025, the task force shall issue its report of the findings
2463	2463	2443and recommendations under clauses (iv) and (v) of subsection (c) with the clerks of the senate
2464	2464	2444and the house of representatives, the senate and house committees on ways and means, the joint
2465	2465	2445committee on health care financing, the center for health information and analysis, the health
2466	2466	2446policy commission and the division of insurance.
2467	2467	2447 (h) Not later than December 15, 2025, the task force shall issue its report of the findings
2468	2468	2448and recommendations under clauses (vi) and (vii) of subsection (c) with the clerks of the senate
2469	2469	2449and the house of representatives, the senate and house committees on ways and means, the joint
2470	2470	2450committee on health care financing, the center for health information and analysis, the health
2471	2471	2451policy commission and the division of insurance. 114 of 119
2472	2472	2452 SECTION 111. (a) There shall be a task force to study the use of prior authorization for
2473	2473	2453health care services and its impact on overall costs in the health care system, and delivery of and
2474	2474	2454access to high quality health care. The task force shall consist of 11 members: the executive
2475	2475	2455director of the health policy commission or a designee, who shall serve as co-chair; the
2476	2476	2456commissioner of insurance or a designee, who shall serve as co-chair; the assistant secretary for
2477	2477	2457MassHealth; the executive director of the group insurance commission; 1 representative from the
2478	2478	2458Massachusetts Association of Health Plans, Inc.; 1 representative from Blue Cross and Blue
2479	2479	2459Shield of Massachusetts, Inc.; 1 representative from the Massachusetts Medical Society; 1
2480	2480	2460representative from the Massachusetts Health and Hospital Association, Inc.; 1 representative
2481	2481	2461from the Massachusetts Academy of Family Physicians, Inc.; 1 representative from the
2482	2482	2462Massachusetts League of Community Health Centers, Inc.; 1 representative from Massachusetts
2483	2483	2463Taxpayers Foundation, Inc.; 1 representative from Associated Industries of Massachusetts; and 1
2484	2484	2464representative from Health Care For All, Inc.
2485	2485	2465 (b) The task force shall analyze: (i) the services, treatments and medications that require
2486	2486	2466prior authorization by payers in Massachusetts; (ii) the factors used by payers to determine
2487	2487	2467whether a service, treatment or medication is appropriate for prior authorization, including
2488	2488	2468considerations of potential for provider abrasion, adverse impacts on health outcomes, the
2489	2489	2469availability, and comparative cost and effectiveness of alternative treatment options and risk of
2490	2490	2470provider overuse of the treatment; (iii) the processes used by payers to obtain prior authorization
2491	2491	2471for a service, treatment or medication; (iv) the potential for streamlining prior authorization
2492	2492	2472processes using automation, electronic submissions, gold carding or other means; (v) actuarial
2493	2493	2473analysis of the impact of prior authorization requirements on the commonwealth’s efforts to meet
2494	2494	2474the health care cost benchmark established under section 9 of chapter 6D; (vi) any state and 115 of 119
2495	2495	2475federal laws requiring or limiting prior authorization by public or private payers for a service,
2496	2496	2476treatment or medication; (vii) the feasibility of an easily accessible, publicly available website
2497	2497	2477with up-to-date information that provides information regarding utilization review requirements
2498	2498	2478for treatments; (viii) the services that have no or low prior authorization denial rates across
2499	2499	2479carriers; (ix) administrative barriers preventing active prior authorizations to continue for their
2500	2500	2480approved duration in instances where an insured individual transitions to a new plan with the
2501	2501	2481same carrier or to a new carrier; (x) expedited utilization review processes across carriers; and
2502	2502	2482(xi) barriers to and solutions for providing uniformity in processes or requirements among
2503	2503	2483different health care segments, including Medicaid, Medicare, fully-insured and self-insured
2504	2504	2484commercial plans.
2505	2505	2485 (c) The task force shall develop recommendations regarding: (i) simplifying and
2506	2506	2486standardizing prior authorization for evidence-based treatments, services or courses of
2507	2507	2487medication; (ii) improving access to medically necessary covered services for patients; (iii)
2508	2508	2488reducing the response time from a carrier or utilization review organization for prior
2509	2509	2489authorization approvals and denials; (iv) reducing administrative barriers and costs related to
2510	2510	2490prior authorization on health care providers; (v) limiting the recoupment and denial of claims for
2511	2511	2491medically necessary covered services; (vi) increasing transparency for covered benefits and prior
2512	2512	2492authorization requirements; (vii) standardizing prior authorization processes, forms and
2513	2513	2493requirements for use across health insurance carriers; (viii) eliminating prior authorization
2514	2514	2494requirements for services, treatments, procedures and prescription drugs that have low variation
2515	2515	2495in utilization across providers or low denial rates; (ix) eliminating prior authorization for or
2516	2516	2496reducing the prior authorization review process to 24 hours for emergency treatments, services or
2517	2517	2497courses of medication; (x) ensuring any physician or personnel under the supervision of a 116 of 119
2518	2518	2498physician that is reviewing a prior authorization request for a carrier has the clinical expertise to
2519	2519	2499treat the medical condition or disease that is the subject of the request; and (xi) removing prior
2520	2520	2500authorization for certain chronic disease management.
2521	2521	2501 (d) The task force shall develop a report of its findings and recommendations, including
2522	2522	2502any legislative or regulatory changes necessary to implement its recommendations. The task
2523	2523	2503force shall file its report with the clerks of the senate and the house of representatives, the senate
2524	2524	2504and house committees on ways and means and the joint committee on health care financing not
2525	2525	2505later than July 31, 2025.
2526	2526	2506 SECTION 112. Notwithstanding any general or special law to the contrary, the division
2527	2527	2507of insurance shall consider the recommendations issued by the task force established in section
2528	2528	2508111 in developing and implementing rules, regulations, bulletins or other guidance to simplify
2529	2529	2509health insurance prior authorization standards and processes.
2530	2530	2510 SECTION 113. (a) Notwithstanding any general or special law to the contrary, the
2531	2531	2511secretary of health and human services shall direct monthly payments to eligible hospitals in the
2532	2532	2512form of enhanced Medicaid payments, supplemental payments or other appropriate mechanisms.
2533	2533	2513Each payment made to an eligible hospital shall be allocated in direct proportion to each eligible
2534	2534	2514hospital’s average monthly Medicaid payments, as determined by the secretary, for inpatient and
2535	2535	2515outpatient acute hospital services for the preceding year or the most recent year for which data is
2536	2536	2516available; provided, however, that such enhanced Medicaid payments shall not be used in
2537	2537	2517subsequent years by the secretary to calculate an eligible hospital’s average monthly payment;
2538	2538	2518and provided further, that such payments shall not offset existing Medicaid payments for which
2539	2539	2519an eligible hospital may be qualified to receive. In any fiscal year, the total sum of all payments 117 of 119
2540	2540	2520made to eligible hospitals under this section shall not exceed $45,000,000. Eligible hospitals may
2541	2541	2521consider expending said payments to strengthen behavioral health supports and services.
2542	2542	2522 (b) The secretary may require as a condition of receiving payment any such reasonable
2543	2543	2523condition of payment that the secretary determines necessary to ensure the availability, to the
2544	2544	2524extent possible, of federal financial participation for the payments and the secretary may incur
2545	2545	2525expenses and the comptroller may certify amounts for payment in anticipation of expected
2546	2546	2526receipt of federal financial participation for the payments.
2547	2547	2527 (c) The executive office of health and human services may promulgate regulations as
2548	2548	2528necessary to carry out this section.
2549	2549	2529 (d) For the purposes of this section “eligible hospital” shall mean an acute care hospital
2550	2550	2530licensed under section 51 of chapter 111 of the General Laws that: (i) has a statewide relative
2551	2551	2531price less than 0.99, as calculated by the center for health information and analysis according to
2552	2552	2532data from the most recent available year; (ii) has a public payer mix greater than 63 per cent, as
2553	2553	2533calculated by the center for health information and analysis according to data from the most
2554	2554	2534recent available year; and (iii) is not owned by or financially consolidated or corporately
2555	2555	2535affiliated with a provider organization, as defined by section 1 of chapter 6D of the General
2556	2556	2536Laws and as reported by the center for health information and analysis in the fiscal year 2022
2557	2557	2537hospital cost report database: (1) owns or controls 4 or more acute care hospitals licensed under
2558	2558	2538said section 51 of said chapter 111; or (2) through which the total net assets of all affiliated acute
2559	2559	2539care hospitals within the provider organization is greater than $800,000,000. 118 of 119
2560	2560	2540 (e) For the purposes of subsection (d), a clinical affiliation with a provider organization,
2561	2561	2541absent ownership, financial consolidation or corporate affiliation, shall not disqualify an eligible
2562	2562	2542hospital from payments authorized under this section.
2563	2563	2543 SECTION 114. (a) Notwithstanding any general or special law to the contrary, for the
2564	2564	2544purposes of monitoring and enforcing the health care cost growth benchmark for calendar years
2565	2565	25452021 to 2025, inclusive, the center for health information and analysis shall apply sections 8, 9,
2566	2566	254610, 16 and 18 of chapter 12C of the General Laws as those sections are in effect on December 1,
2567	2567	25472024.
2568	2568	2548 (b) Notwithstanding any general or special law to the contrary, for the purposes of
2569	2569	2549monitoring and enforcing the health care cost growth benchmark for calendar years 2021 to
2570	2570	25502025, inclusive, the health policy commission shall apply sections 9 and 10 of chapter 6D of the
2571	2571	2551General Laws as those sections are in effect on December 1, 2024.
2572	2572	2552 (c) Notwithstanding any general or special law to the contrary, the first benchmark cycle
2573	2573	2553shall consist of the years 2025 and 2026. The health care cost growth benchmark for that
2574	2574	2554benchmark cycle shall be the average of the 2025 health care cost growth benchmark that the
2575	2575	2555health policy commission governing board established in 2024 and the growth rate of potential
2576	2576	2556gross state product for 2026 established under section 7H½ of chapter 29 of the General Laws.
2577	2577	2557 (d) Notwithstanding any general or special law to the contrary, not later than April 15,
2578	2578	25582025, the board shall establish the health care cost growth benchmark pursuant to section 9 of
2579	2579	2559chapter 6D of the general laws for: (i) the benchmark cycle consisting of the years 2025 and
2580	2580	25602026; and (ii) the benchmark cycle consisting of the years 2026 and 2027. 119 of 119
2581	2581	2561 (e) Notwithstanding any general or special law to the contrary, on or before January 15,
2582	2582	25622025, the secretary and house and senate committees on ways and means shall jointly develop
2583	2583	2563growth rates of potential gross state product pursuant to section 7H½ of chapter 29 of the
2584	2584	2564General Laws for each of the calendar years of 2026 and 2027.
2585	2585	2565 SECTION 115. Notwithstanding any general or special law, rule or regulation to the
2586	2586	2566contrary, section 13 of chapter 6D of the General Laws, as amended by this act, shall apply only
2587	2587	2567to material change notices submitted after the effective date of this act; provided, however, that
2588	2588	2568said section 13 of said chapter 6D shall apply to material changes that meet all of the following
2589	2589	2569criteria: (i) the health policy commission received a completed material change notice regarding
2590	2590	2570the material change on or after March 1, 2024; (ii) the health policy commission has not yet
2591	2591	2571determined whether to conduct a cost and market impact review in regard to the material change;
2592	2592	2572and (iii) the health policy commission classifies the material change as involving a provider or
2593	2593	2573provider organization’s merger or affiliation resulting in an increase in net patient service
2594	2594	2574revenue of $10,000,000 or more. For such material change notices, the health policy commission
2595	2595	2575shall be permitted to require submission of a new or revised material change form, request
2596	2596	2576additional documentation and information and take an additional 30 days to conduct its
2597	2597	2577preliminary review.
2598	2598	2578 SECTION 116. Notwithstanding any general or special law, rule or regulation to the
2599	2599	2579contrary, the health policy commission shall submit the first state health plan to the governor and
2600	2600	2580the general court, as required under section 22 of chapter 6D of the General Laws, on or before
2601	2601	2581January 1, 2026. 120 of 119
2602	2602	2582 SECTION 117. Notwithstanding any general or special law to the contrary, section 23 of
2603	2603	2583said chapter 6D shall only apply to private equity firms that obtain a financial interest in a
2604	2604	2584provider or provider organization and to financial actions taken by registered provider
2605	2605	2585organizations with private equity investment after the effective date of this act.
2606	2606	2586 SECTION 118. Notwithstanding any general or special law, rule or regulation to the
2607	2607	2587contrary, section 4B of chapter 112 of the General Laws shall apply only to contracts or
2608	2608	2588agreements between medical practices and management services organizations entered into after
2609	2609	2589the effective date of this act.
2610	2610	2590 SECTION 119. Section 17 shall take effect on January 1, 2025.
2611	2611	2591 SECTION 120. Section 67 shall take effect on August 1, 2025.
2612	2612	2592 SECTION 121. All health care practices required to register pursuant to section 4A of
2613	2613	2593chapter 112 of the General Laws shall register with the board of registration in medicine not later
2614	2614	2594than January 1, 2026.
2615	2615	2595 SECTION 122. The commissioner of occupational licensure and the commissioner of
2616	2616	2596public health shall adopt the regulations required under section 96 not later than 6 months after
2617	2617	2597the effective date of this act.
2618	2618	2598 SECTION 123. The division of insurance shall adopt the rules and regulations required
2619	2619	2599under section Error! Reference source not found.112 not later than 6 months after the task force
2620	2620	2600established in section 111 issues its final report and recommendations.
2621	2621	2601 SECTION 124. Section 113 is hereby repealed.
2622	2622	2602 SECTION 125. Section 124 shall take effect 2 years from the effective date of this act.