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 Section 16N of said chapter 6A is hereby repealed.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 Section 16T of said chapter 6A is hereby repealed.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