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SENATE . . . . . . . . . . . . . . No. 2881
Senate, July 18, 2024 -- Text of the Senate amendment to the House Bill enhancing the health
care market review process (House, No. 4653) (being the text of Senate document numbered
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 Section 16N of said chapter 6A is hereby repealed.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 Section 16T of said chapter 6A is hereby repealed.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:- 2 of 121
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 3 of 121
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 4 of 121
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 5 of 121
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, 6 of 121
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 or real estate investment trust that had a
120financial interest in a provider or provider organization that closed, declared bankruptcy or 7 of 121
121otherwise discontinued its operations, within 15 years of the private equity firm or real estate
122investment trust’s financial interest in the provider or provider organization.
123 SECTION 17. Section 2 of said chapter 6D, as so appearing, is hereby amended by
124striking out subsections (b) and (c) and inserting in place thereof the following 2 subsections:-
125 (b)(1) There shall be a board, with duties and powers established by this chapter, which
126shall govern the commission. The board shall consist of the following members: the secretary of
127administration and finance, ex officio; the secretary of health and human services, ex officio; 7
128members to be appointed by the governor pursuant to paragraph (2), 1 of whom shall serve as
129chair; and 4 members to be appointed by the attorney general. Each appointment after the initial
130term of appointment shall serve a term of 5 years; provided, however, that a person appointed to
131fill a vacancy shall serve for not more than the unexpired term. An appointed member of the
132board shall be eligible for reappointment; provided, however, that no appointed member shall
133concurrently hold full or part-time employment in the executive branch. The board shall annually
134elect 1 of its members to serve as vice-chairperson. Each member of the board shall be a resident
135of the commonwealth. A member of the board serving ex officio may appoint a designee under
136section 6A of chapter 30; provided further, however, that designee members shall not serve as
137chair or vice-chair.
138 (2) The person appointed by the governor to serve as chair shall have demonstrated
139expertise in health care administration, finance and management at a senior level. The second
140person appointed by the governor shall be a registered nurse with expertise in the delivery of care
141and development and utilization of innovative treatments in the practice of patient care. The third
142person appointed by the governor shall have demonstrated expertise in health plan administration 8 of 121
143and finance. The fourth person appointed by the governor shall have demonstrated expertise in
144representing the health care workforce as a leader in a labor organization. The fifth person
145appointed by the governor shall have demonstrated expertise in development and pricing for
146pharmaceuticals, biotechnology or medical devices. The sixth person appointed by the governor
147shall be a primary care physician. The seventh person appointed by the governor shall have
148demonstrated expertise as a purchaser of health insurance representing business management or
149health benefits administration. The first person appointed by the attorney general shall have
150demonstrated expertise in hospitals or hospital health systems administration, finance or
151management. The second person appointed by the attorney general shall have demonstrated
152expertise in health care consumer advocacy. The third person appointed by the attorney general
153shall have expertise in behavioral health, substance use disorder, mental health services and
154mental health reimbursement systems. The fourth person appointed by the attorney general shall
155be a health economist.
156 (c) Seven members of the board shall constitute a quorum, and the affirmative vote of 6
157members of the board shall be necessary and sufficient for any action taken by the board. No
158vacancy in the membership of the board shall impair the right of a quorum to exercise all the
159rights and duties of the commission. The appointed members of the board shall receive a stipend
160in an amount not more than 10 per cent of the salary of the secretary of administration and
161finance under section 4 of chapter 7; provided, however, that the chairperson shall receive a
162stipend in an amount not more than 12 per cent of the salary of the secretary; and provided
163further, that ex officio members and their designees shall not receive a stipend for their service as
164board members. Appointed members of the board shall be special state employees subject to
165chapter 268A. An appointed member of the board shall not be employed by, a consultant to, a 9 of 121
166member of the board of directors of or otherwise be a representative of a health care entity,
167pharmaceutical manufacturer or pharmacy benefit manager while serving on the board.
168 SECTION 18. Said chapter 6D is hereby further amended by inserting after section 3 the
169following section:-
170 Section 3A. (a) There shall be within the commission an office for pharmaceutical policy
171and analysis. The office shall: (i) issue reports including, but not limited to, an annual report
172pursuant to subsection (b) and analyses of: (A) pharmaceutical spending in the commonwealth;
173the affordability of and access to pharmaceutical drugs; (B) the potential innovation of high
174value drugs and orphan drugs; and (C) the impacts of these issues on racially and ethnically
175diverse populations and individuals with disabilities; (ii) analyze pharmaceutical data collected
176by agencies of the commonwealth including, but not limited to, pharmaceutical data collected by
177the center pursuant to sections 8 to 10, inclusive, of chapter 12C and pharmaceutical data
178available through public and proprietary sources; provided, however, that the commission may
179solicit additional data and information directly from manufacturers, pharmacy benefit managers
180and payers to the extent necessary to perform the duties set forth in this section, including, but
181not limited to, conducting an annual survey of payers on pharmaceutical access and plan design;
182provided, however, that confidential data shall not be a public record and shall be exempt from
183disclosure pursuant to clause Twenty-sixth of section 7 of chapter 4 and section 10 of chapter 66;
184(iii) assess the value and pricing of pharmaceutical drugs used in the commonwealth including,
185but not limited to, reviewing disclosures submitted pursuant to section 8A; and (iv) advise other
186state agencies and entities including, but not limited to, the executive office of health and human
187services, the office of Medicaid, the division of insurance, the group insurance commission, the
188commonwealth health insurance connector authority, the department of corrections, the 10 of 121
189Massachusetts Life Sciences Center and the joint committee on health care financing on actions,
190including any proposed legislation, that may improve the value and pricing of pharmaceutical
191drugs in the commonwealth.
192 (b) The commission shall compile an annual report concerning trends and underlying
193factors for pharmaceutical drug spending including, but not limited to, analysis of: (i) prices and
194utilization; (ii) drugs or categories of drugs with the highest impact on spending; (iii) trends in
195patient out-of-pocket spending; and (iv) any recommendations for strategies to reduce
196pharmaceutical spending growth, promote affordability and enhance pharmaceutical access. The
197report shall be based on: (A) the commission’s analysis of information provided at the annual
198health care cost trends hearings by providers, provider organizations and insurers; (B) data
199collected by the center for health information and analysis under sections 8 to10, inclusive, of
200chapter 12C; and (C) any other information the commission considers necessary to fulfill its
201duties under this section, as further defined in regulations promulgated by the commission.
202Annually, not later than December 31, the commission shall submit the report to the chairs of the
203house and senate committees on ways and means and the chairs of the joint committee on health
204care financing and shall publish and make the report available to the public.
205 SECTION 19. Said chapter 6D is hereby further amended by striking out section 4, as
206appearing in the 2022 Official Edition, and inserting in place thereof the following section:-
207 Section 4. There shall be an advisory council to the commission. The council shall advise
208on the overall operation and policy of the commission. The commission shall convene the
209council quarterly or more frequently as requested by the commission. Members of the board of
210the health policy commission shall convene and consult with advisory council members on 11 of 121
211issues brought before the commission and shall present the views of advisory council members
212in board meetings. The council shall be appointed by the executive director and reflect a broad
213distribution of diverse perspectives on the health care system, including, but not limited to,
214health care professionals, educational institutions, consumer representatives, purchasers of health
215insurance representing business management or health benefits administration, medical device
216manufacturers, representatives of the biotechnology industry, pharmaceutical manufacturers,
217providers, provider organizations, hospitals, community health centers, labor organizations,
218organizations involved in health equity advocacy and public and private payers.
219 SECTION 20. Section 5 of said chapter 6D, as so appearing, is hereby amended by
220inserting after the word “growth”, in line 3, the following words:- and affordability.
221 SECTION 21. Said section 5 of said chapter 6D, as so appearing, is hereby further
222amended by striking out, in line 10, the words “and (vii)” and inserting in place thereof the
223following words:- ; (vii) monitor pharmaceutical spending and pricing and patient access to
224pharmaceuticals; and (viii).
225 SECTION 22. The first paragraph of section 6 of said chapter 6D, as so appearing, is
226hereby amended by adding the following sentence:-
227 Each pharmaceutical manufacturing company and pharmacy benefit manager shall pay to
228the commonwealth an amount for the estimated expenses of the center and for the other purposes
229described in this chapter.
230 SECTION 23. Said section 6 of said chapter 6D, as so appearing, is hereby further
231amended by striking out, in lines 5 and 36, the figure “33”, each time it appears, and inserting in
232place thereof, in each instance, the following figure:- 25. 12 of 121
233 SECTION 24. Said section 6 of said chapter 6D, as so appearing, is hereby further
234amended by adding the following 3 paragraphs:-
235 To the maximum extent permissible under federal law, provided that such assessment
236will not result in any reduction of federal financial participation in Medicaid, the assessed
237amount for pharmaceutical manufacturing companies shall be not less than 25 per cent of the
238amount appropriated by the general court for the expenses of the commission less amounts
239collected from: (i) filing fees; (ii) fees and charges generated by the commission's publication or
240dissemination of reports and information; and (iii) federal matching revenues received for said
241expenses or received retroactively for expenses of predecessor agencies. Pharmaceutical
242manufacturing companies shall pay such assessed amount multiplied by the ratio of the
243pharmaceutical manufacturing company’s gross sales of outpatient prescription drugs dispensed
244in the commonwealth or similar measure determined by the commission consistent with
245applicable federal requirements.
246 To fund the operations of the commonwealth’s licensure of pharmacy benefit managers
247and to the maximum extent permissible under federal law; provided, however, that such
248assessment will not result in any reduction of federal financial participation in Medicaid, the
249assessed amount for pharmacy benefit managers shall be not less than 25 per cent of the amount
250appropriated by the general court for the expenses of the commission less amounts collected
251from: (i) filing fees; (ii) fees and charges generated by the commission's publication or
252dissemination of reports and information; and (iii) federal matching revenues received for said
253expenses or received retroactively for expenses of predecessor agencies. Pharmacy benefit
254managers shall pay such assessed amount multiplied by the ratio of the pharmacy benefit
255manager’s gross revenue related to outpatient prescription drugs dispensed in the commonwealth 13 of 121
256or similar measure determined by the commission consistent with applicable federal
257requirements. In no event shall this assessment, when combined with an assessment of pharmacy
258benefit managers pursuant to section 7 of chapter 12C and a pharmacy benefit manager licensing
259fee pursuant to section 2 of chapter 176Y, exceed the commonwealth’s estimated expense in
260operating the pharmacy benefit manager licensure program.
261 Each pharmaceutical manufacturing company and each pharmacy benefit manager shall
262make a preliminary payment to the commission annually on October 1 in an amount equal to 1/2
263of the initial year’s total assessment and, for subsequent years, in an amount equal to 1/2 of the
264previous year's total assessment. Thereafter, each pharmaceutical manufacturing company and
265each pharmacy benefit manager shall pay, within 30 days of receiving notice from the
266commission, the balance of the total assessment for the current year as determined by the
267commission.
268 SECTION 25. Section 7 of said chapter 6D, as so appearing, is hereby amended by
269striking out, in line 35, the words “and (vi)” and inserting in place thereof the following words:-
270(vi) advance health equity; and (vii).
271 SECTION 26. Said chapter 6D is hereby further amended by striking out section 8, as so
272appearing, and inserting in place thereof the following section:-
273 Section 8. (a) Not later than October 1 of every year, the commission shall hold public
274hearings based on the report submitted by the center pursuant to section 16 of chapter 12C
275comparing: (i) the average of the annual growth in total health care expenditures during each
276year of the most recently concluded benchmark cycle to the health care cost growth benchmark
277for that benchmark cycle; and (ii) the growth in the affordability index pursuant to said section 14 of 121
27816 of said chapter 12C to the affordability benchmark. At said hearings, the commission shall
279examine the costs, prices and cost trends of health care providers, provider organizations, private
280and public health care payers, pharmaceutical manufacturing companies and pharmacy benefit
281managers and any relevant impact of private equity firms, real estate investment trusts and
282management services organizations on such costs, prices and cost trends, with particular
283attention to factors that contribute to cost growth within the commonwealth's health care system
284and trends in annual behavioral health expenditures.
285 (b) The attorney general may intervene in such hearings.
286 (c) Public notice of any hearing shall be provided not less than 60 days in advance.
287 (d) The commission shall identify as witnesses for the public hearing a representative
288sample of providers, provider organizations, payers, private equity firms, real estate investment
289trusts, management services organizations, pharmaceutical manufacturing companies, pharmacy
290benefit managers and others, including: (i) not less than 3 academic medical centers, including
291the 2 acute hospitals with the highest level of net patient service revenue; (ii) not less than 3
292disproportionate share hospitals, including the 2 hospitals whose largest per cent of gross patient
293service revenue is attributable to Title XVIII and XIX of the Social Security Act or other
294governmental payers; (iii) community hospitals from not less than l 3 separate regions of the
295commonwealth; (iv) freestanding ambulatory surgical centers from not less than 3 separate
296regions of the commonwealth; (v) community health centers from at not less than 3 separate
297regions of the commonwealth; (vi) the 5 commercial carriers with the highest enrollments in the
298commonwealth; (vii) any managed care organization that provides health benefits under Title
299XIX of the Social Security Act ; (viii) the group insurance commission; (ix) not less than 3 15 of 121
300municipalities that have adopted chapter 32B; (x) not less than 4 provider organizations which
301shall be from diverse geographic regions of the commonwealth, not less than 2 of which shall be
302certified as accountable care organizations and 1 of which shall be certified as a model ACO; (xi)
303at least 1 private equity firms, real estate investment trust or management services organization
304associated with a provider or provider organization; (xii) the assistant secretary for MassHealth;
305(xiii) not less than 3 representatives of pharmaceutical manufacturing companies doing business
306in the commonwealth or trade groups thereof; (xiv) 1 pharmacy benefit manager or trade groups
307thereof; and (xv) any witness identified by the attorney general or the center.
308 (e) Witnesses shall provide testimony under oath and subject to examination and cross
309examination by the commission, the executive director of the center and the attorney general at
310the public hearing in a manner and form to be determined by the commission, including, but not
311limited to: (i) in the case of providers and provider organizations, testimony concerning payment
312systems, care delivery models, payer mix, cost structures, administrative and labor costs, capital
313and technology cost, adequacy of public payer reimbursement levels, reserve levels, utilization
314trends, relative price, quality improvement and care-coordination strategies, investments in
315health information technology, the relation of private payer reimbursement levels to public payer
316reimbursements for similar services, efforts to improve the efficiency of the delivery system,
317efforts to reduce the inappropriate or duplicative use of technology and the impact of price
318transparency on prices; (ii) in the case of private and public payers, testimony concerning factors
319underlying premium cost and rate increases, the relation of reserves to premium costs, efforts by
320the payer to reduce the use of fee-for-service payment mechanisms, the payer's efforts to develop
321benefit design, network design and payment policies that enhance product affordability and
322encourage efficient use of health resources and technology including utilization of alternative 16 of 121
323payment methodologies, efforts by the payer to increase consumer access to health care
324information, efforts by the payer to promote the standardization of administrative practices, the
325impact of price transparency on prices and any other matters as determined by the commission;
326(iii) in the case of the assistant secretary for MassHealth, testimony concerning the structure,
327benefits, eligibility, caseload and financing of MassHealth and other Medicaid programs
328administered by the office of Medicaid or in partnership with other state and federal agencies and
329the agency’s activities to align or redesign said programs in order to encourage the development
330of more integrated and efficient health care delivery systems; (iv) in the case of private equity
331firms, real estate investment trusts or management services organization, testimony concerning
332changes to patient access to health care services or facilities, health outcomes, prices charged to
333insurers and patients, staffing levels, clinical workflow, financial stability and ownership
334structure as the result of an acquisition of a provider or provider organization, the amount of debt
335and equity leveraged in an acquisition of a provider or provider organization, additional debt
336taken on by a provider or provider organization after an acquisition, dividends paid out to
337investors, compensation including, but not limited to, base salaries, incentives, bonuses, stock
338options, deferred compensations, benefits and contingent payments to officers, managers and
339directors of provider organizations acquired, owned or managed, in whole or in part, by said
340private equity firms, real estate investment trusts or management services organizations, changes
341to real estate ownership and any leaseback agreements and management of clinical assets and
342any other matters as determined by the commission; and (v) in the case of pharmacy benefit
343managers and pharmaceutical manufacturing companies, testimony concerning factors
344underlying prescription drug costs and price changes including, but not limited to, the initial
345prices of drugs coming to market and subsequent price changes, changes in industry profit levels, 17 of 121
346marketing expenses, reverse payment patent settlements, impacts of manufacturer rebates,
347discounts and other price concessions on net pricing, availability of alternative drugs or
348treatments, corporate ownership organizational structure and any other matters as determined by
349the commission. The commission shall solicit testimony from a payer which has been identified
350by the center's annual report under subsection (a) of section 16 of chapter 12C as: (A) paying
351providers more than 10 per cent above or more than 10 per cent below the average relative price;
352or (B) entering into alternative payment contracts that vary by more than 10 per cent. A payer
353identified by the center's report shall explain the extent of price variation between the payer's
354participating providers and describe any efforts to reduce such price variation.
355 (f) If the center's annual report pursuant to subsection (a) of section 16 of chapter 12C
356finds that the average of the annual percentage changes in total health care expenditures during a
357benchmark cycle exceeded the health care cost growth benchmark for that benchmark cycle or
358the percentage change in the affordability index exceeded the affordability benchmark, the
359commission may identify additional witnesses for the public hearing. Witnesses shall provide
360testimony subject to examination and cross examination by the commission, the executive
361director of the center and attorney general at the public hearing in a manner and form to be
362determined by the commission, including, but not limited to: (i) testimony concerning
363unanticipated events that may have impacted the total health care cost expenditures and
364affordability, including, but not limited to, a public health crisis such as an outbreak of a disease,
365a public safety event or a natural disaster; (ii) testimony concerning trends in patient acuity,
366complexity or utilization of services; (iii) testimony concerning trends in input cost structures,
367including, but not limited to, the introduction of new pharmaceuticals, medical devices and other
368health technologies; (iv) testimony concerning the cost of providing certain specialty services, 18 of 121
369including, but not limited to, the provision of health care to children, cancer-related health care
370and medical education; (v) testimony related to unanticipated administrative costs for carriers,
371including, but not limited to, costs related to information technology, administrative
372simplification efforts, labor costs and transparency efforts; (vi) testimony related to costs due the
373implementation of state or federal legislation or government regulation; (vii) testimony related to
374premiums by market segment and community, plan and benefit design and cost sharing,
375including deductibles and co-pays; and (viii) any other factors that may have led to excessive
376health care cost growth.
377 (g) The commission shall annually compile a report for the most recently concluded
378benchmark cycle concerning spending trends, including primary care and behavioral health
379expenditures, affordability and the underlying factors influencing said spending trends. The
380report shall be based on the commission’s analysis of information provided at the hearings by
381witnesses, providers, provider organizations, payers, private equity firms, real estate investment
382trusts, management services organizations, pharmaceutical manufacturing companies and
383pharmacy benefit managers, registration data collected pursuant to section 11, data collected or
384analyzed by the center pursuant to sections 8 to 10A, inclusive, of chapter 12C and any other
385available information that the commission considers necessary to fulfill its duties under this
386section, as further defined in regulations promulgated by the commission. To the extent
387practicable, the report shall not contain any data that is likely to compromise the financial,
388competitive or proprietary nature of the information. The report shall be submitted to the chairs
389of the house and senate committees on ways and means and the chairs of the joint committee on
390health care financing and shall be published and made available to the public annually, not later
391than December 31, of each year. The report shall include recommendations for strategies to 19 of 121
392increase the efficiency of the health care system and promote affordability for individuals and
393families and analysis of specific spending trends that may impede the commonwealth’s ability to
394meet the health care cost growth benchmark, together with any drafts of legislation language
395necessary to implement said recommendations.
396 SECTION 27. Said chapter 6D is hereby further amended by striking out sections 9 and
39710, as so appearing, and inserting in place thereof the following 3 sections:-
398 Section 9. (a) Not later than April 15 of every year, the board shall establish the health
399care cost growth benchmark for a benchmark cycle consisting of the 2 calendar years beginning
400after the year in which the April 15 date occurs.
401 (b) The health care cost growth benchmark shall be equal to the average of the growth
402rate of potential gross state product established under section 7H½ of chapter 29 for each of the 2
403calendar years that comprise the benchmark cycle. The commission shall establish procedures to
404prominently publish the health care cost growth benchmark on the commission’s website.
405 (c) For all benchmark cycles through the cycle containing the calendar years 2039 and
4062040, if the commission determines that an adjustment in the health care cost growth benchmark
407is reasonably warranted, having first considered any testimony at a public hearing as required
408under subsection (d), the board of the commission may recommend a modification of the health
409care cost growth benchmark, in any amount as determined by the commission. The board shall
410submit notice of its recommendation for any modification to the joint committee on health care
411financing. Within 30 days of such filing, the joint committee may hold a public hearing on the
412board's proposed modification to the health care cost growth benchmark. Within 30 days of the
413public hearing, the joint committee may report its findings and proposed legislation, including its 20 of 121
414recommendation on whether to affirm or reject the boards’ recommendation, to the general court
415and provide a copy of its findings and proposed legislation to the board.
416 (d) Prior to making any recommended modification to the health care cost growth
417benchmark under subsection (c), the board shall hold a public hearing on any such recommended
418modification. The public hearing shall be based on the report submitted by the center pursuant to
419section 16 of chapter 12C comparing the average of the annual growth in total health care
420expenditures during each year of the most recently concluded benchmark cycle to the health care
421cost growth benchmark, any other data provided by the center and such other pertinent
422information or data as may be available to the board. The hearing shall examine the costs, prices
423and cost trends of health care provider, provider organization and private and public health care
424payer and any relevant impact of private equity firms, real estate investment trusts, management
425services organizations, pharmaceutical manufacturing companies and pharmacy benefit
426managers on such costs, prices and cost trends, with particular attention to factors that contribute
427to cost growth within the commonwealth’s health care system and whether, based on the
428testimony, information and data presented at the hearing, a modification in the health care cost
429growth benchmark is appropriate. The commission shall provide public notice of such hearing
430not less than 45 days prior to the date of the hearing, including notice to the joint committee on
431health care financing. The joint committee on health care financing may participate in the
432hearing. The commission shall identify as witnesses for the public hearing a representative
433sample of providers, provider organizations, payers, private equity firms, real estate investment
434trusts, management services organizations, pharmaceutical manufacturing companies, pharmacy
435benefit managers and such other interested parties as the commission may determine. Any other
436interested parties may testify at the hearing. 21 of 121
437 (e) Any recommendation of the commission to modify the health care cost growth
438benchmark under subsection (c) of this section shall be approved by a two-thirds vote of the
439board.
440 Section 9A. Not later than April 15 of every year, the board shall establish a health care
441affordability benchmark for the following calendar year. The commission shall establish
442procedures to prominently publish the annual affordability benchmark on the commission's
443website.
444 Section 10. (a) For the purpose of this section, “Health care entity” shall mean any health
445care entity identified by the center pursuant to section 18 of chapter 12C.
446 (b) The commission shall provide notice to a health care entity that the commission may
447analyze the health care spending performance of such health care entity and that such health care
448entity shall perform certain actions as provided in subsection (c); provided, however, that at the
449discretion of the commission, the commission may publicly identify the identities and
450performance results of such health care entity.
451 (c) The commission may require a performance improvement plan to be filed with the
452commission for a health care entity that is identified by the center under section 18 of chapter
45312C.
454 (d) In addition to the notice provided under subsection (b), the commission shall provide
455written notice to a health care entity that it determines must file a performance improvement
456plan. Within 45 days of receipt of such written notice, the health care entity shall either:
457 (1) file a performance improvement plan with the commission; or 22 of 121
458 (2) file an application with the commission to waive or extend the requirement to file a
459performance improvement plan.
460 (e) The health care entity may file documentation or supporting evidence with the
461commission to support the health care entity’s application to waive or extend the requirement to
462file a performance improvement plan. The commission shall require the health care entity to
463submit any other relevant information it deems necessary in considering the waiver or extension
464application; provided, however, that such information shall be made public at the discretion of
465the commission.
466 (f) The commission may waive or delay the requirement for a health care entity to file a
467performance improvement plan in response to a waiver or extension request filed under
468subsection (d) in light of all information received from the health care entity, based on a
469consideration of the following factors:
470 (1) the spending, price and utilization trends of the health care entity over time,
471independently and as compared to similar entities, and any demonstrated improvement to reduce
472spending or total medical expenses;
473 (2) any ongoing strategies or investments that the health care entity is implementing to
474improve future long-term efficiency and reduce spending growth;
475 (3) whether the factors that led to increased spending for the health care entity can
476reasonably be considered to be unanticipated and outside of the control of the entity. Such factors
477may include, but shall not be limited to, age and other health status adjusted factors and other
478cost inputs such as pharmaceutical expenses, medical device expenses and labor costs; 23 of 121
479 (4) the overall financial condition of the health care entity;
480 (5) a significant difference between the growth rate of potential gross state product and
481the growth rate of actual gross state product, as determined under section 7H½ of chapter 29; and
482 (6) any other factors the commission considers relevant.
483 (g) If the commission declines to waive or extend the requirement for the health care
484entity to file a performance improvement plan, the commission shall provide written notice to the
485health care entity that its application for a waiver or extension was denied and the health care
486entity shall file a performance improvement plan.
487 (h) A health care entity shall file a performance improvement plan: (A) within 45 days of
488receipt of a notice under subsection (d); (B) if the health care entity has requested a waiver or
489extension, within 45 days of receipt of a notice that such waiver or extension has been denied; or
490(C) if the health care entity is granted an extension, on the date given on such extension. The
491performance improvement plan shall identify the causes of the entity's excessive spending, and
492shall include, but not be limited to, specific strategies, adjustments and action steps the entity
493proposes to implement to improve spending performance. The proposed performance
494improvement plan shall include specific identifiable and measurable expected outcomes and a
495timetable for implementation. The timetable for a performance improvement plan shall not
496exceed 18 months.
497 (i) The commission shall approve any performance improvement plan that it determines
498is reasonably likely to address the underlying cause of the health care entity’s excessive spending
499and has a reasonable expectation for successful implementation. 24 of 121
500 (j) If the board determines that the performance improvement plan is unacceptable or
501incomplete, the commission may provide consultation on the criteria that have not been met and
502may allow an additional time period of not more than 30 calendar days, for resubmission.
503 (k) Upon approval of the proposed performance improvement plan, the commission shall
504notify the health care entity to begin implementation of the performance improvement plan.
505Public notice shall be provided by the commission on its website, identifying that the health care
506entity is implementing a performance improvement plan. Health care entities implementing an
507approved performance improvement plan shall be subject to additional reporting requirements
508and compliance monitoring, as determined by the commission. The commission shall assist the
509health care entity with the successful implementation of the performance improvement plan.
510 (l) Health care entities subject to a performance improvement plan shall, in good faith,
511work to implement such plan and may file amendments to the performance improvement plan at
512any point during the implementation of the performance improvement plan, subject to approval
513of the commission.
514 (m) At the conclusion of the timetable established in the performance improvement plan,
515the health care entity shall report to the commission regarding the outcome of the performance
516improvement plan. If the commission finds that the performance improvement plan was
517unsuccessful, the commission shall either: (i) extend the implementation timetable of the existing
518performance improvement plan; (ii) approve amendments to the performance improvement plan
519as proposed by the health care entity; (iii) require the health care entity to submit a new
520performance improvement plan under subsection (c), including requiring specific elements for 25 of 121
521approval; or (iv) waive or delay the requirement to file any additional performance improvement
522plans.
523 (n) Upon the successful completion of the performance improvement plan, the identity of
524the health care entity shall be removed from the list of entities currently implementing a
525performance improvement plan on the commission’s website.
526 (o) The commission may submit a recommendation for proposed legislation to the joint
527committee on health care financing if the commission determines that further legislative
528authority is needed to achieve the commonwealth’s health care quality and spending
529sustainability objectives, assist health care entities with the implementation of performance
530improvement plans or otherwise ensure compliance with the provisions of this section.
531 (p)(1) If the commission determines that a health care entity has: (i) willfully neglected to
532file a performance improvement plan with the commission within 45 days as required under
533subsection (d); (ii) failed to file an acceptable performance improvement plan in good faith with
534the commission; (iii) failed to implement the performance improvement plan in good faith; or
535(iv) knowingly failed to provide or falsified information required by this section to the
536commission, the commission may: (A) assess a civil penalty to the health care entity of not more
537than $500,000 for a first violation, not more than $750,000 for a second violation and not more
538than the amount of spending attributable to the health care entity that is in excess of the health
539care cost growth benchmark for a third or subsequent violation; provided, however, that a civil
540penalty assessed pursuant to one of the above clauses shall be a first offense if a previously
541assessed penalty was assessed pursuant to a different clause; (B) stay consideration of any
542material change notice submitted under section 13 of this chapter by the health care entity or any 26 of 121
543affiliates until the commission determines that the health care entity is in compliance with this
544section; and (C) notify the department of public health that the health care entity, if applying for
545a notice of determination of need, is not in compliance with this section. A civil penalty assessed
546under this subsection shall be deposited into the Healthcare Payment Reform Fund established
547under section 100 of chapter 194 of the acts of 2011. Except as otherwise expressly authorized
548under this section, the commission shall seek to promote compliance with this section and shall
549only impose a civil penalty as a last resort.
550
551 (q) The commission shall promulgate regulations necessary to implement this section;
552provided, however, that notice of any proposed regulations shall be filed with the joint
553committee on state administration and regulatory oversight and the joint committee on health
554care financing not less than180 days before adoption.
555 SECTION 28. Section 11 of said chapter 6D, as so appearing, is hereby amended by
556striking out, in line 3, the words “2 years” and inserting in place thereof the following words:- 1
557year.
558 SECTION 29. Said section 11 of said chapter 6D, as so appearing, is hereby further
559amended by striking out subsection (b) and inserting in place thereof the following subsection:-
560 (b) The commission shall require that all provider organizations report information
561detailed in section 9 of chapter 12C. The commission may specify additional data elements in a
562given reporting year to support the development of the state health plan or the focused
563assessments defined in section 22 of chapter 6D. 27 of 121
564 SECTION 30. Said section 11 of said chapter 6D, as so appearing, is hereby further
565amended by striking out subsection (d) and inserting in place thereof the following subsection:-
566 (d) The commission may enter into interagency agreements with the center and other
567state agencies to effectuate the goals of this section.
568 SECTION 31. Said chapter 6D is hereby further amended by striking out sections 12 and
56913, as so appearing, and inserting in place thereof the following 2 sections:-
570 Section 12. (a) The commission shall ensure the timely reporting of information required
571under section 11. The commission shall notify provider organizations of any applicable reporting
572deadlines; provided, that the commission shall notify, in writing, a provider organization that has
573failed to meet a reporting deadline and that failure to respond within 2 weeks of the receipt of the
574notice may result in penalties. The commission may assess a penalty against a provider
575organization that fails, without just cause, to provide the requested information within 2 weeks
576following receipt of the written notice required under this subsection of up to $10,000 per week
577for each week of delay after the 2-week period following provider organization's receipt of the
578written notice; provided, however, that the maximum annual penalty against a provider
579organization under this section shall be $500,000 per registration cycle. Amounts collected under
580this section shall be deposited in the Healthcare Payment Reform Fund established under section
581100 of chapter 194 of the Acts of 2011.
582 (b) Notwithstanding any general or special law to the contrary, any material change
583notice submitted under section 13 and any determination of need application submitted under
584sections 25B to 25G, inclusive, of chapter 111 by a provider organization that has failed to 28 of 121
585provide required information pursuant to section 11 and section 9 of chapter 12C shall be
586incomplete until such time as the provider organization has provided such required information.
587 (c) Nothing in this chapter shall require a provider organization which represents
588providers who collectively receive, less than $25,000,000 in annual net patient service revenue to
589be registered if such provider or provider organization is not a risk-bearing provider organization
590or is not owned or controlled, whether fully or partially, directly or indirectly, by a private equity
591firm.
592 Section 13. (a)(1) Every provider or provider organization shall, before making any
593material change to its operations or governance structure, submit notice to the commission, the
594center and the attorney general of such change not less than 60 days before the date of the
595proposed change, provided, however, that material changes shall include, but not be limited to:
596(i) significant expansions in a provider or provider organization’s capacity; (ii) a corporate
597merger, acquisition or affiliation of a provider or provider organization and a carrier; (iii)
598mergers or acquisitions of hospitals or hospital systems; (iv) acquisition of insolvent provider
599organizations; (v) significant new for-profit investment in, acquisitions of the assets of or
600ownership or direct or indirect control of a provider or provider organization by for-profit
601entities, including, but not limited to, private equity firms and management services
602organizations; (vi) substantial acquisition or sale of assets for an ownership share or for the
603purposes of a lease-back arrangement; (vii) conversion of a provider or provider organization
604from a non-profit entity to a for-profit entity; and (viii) mergers or acquisitions of provider
605organizations which will result in a provider organization having a dominant market share in a
606given service or region. 29 of 121
607 Within 30 days of receipt of a completed notice filed under the commission’s regulations,
608the commission shall conduct a preliminary review to determine whether the material change is
609likely to result in a significant impact on the commonwealth’s ability to meet the health care cost
610growth benchmark established in section 9, or on the competitive market. If the commission
611finds that the material change is likely to have a significant impact on the commonwealth’s
612ability to meet the health care cost growth benchmark, or on the competitive market, the
613commission may conduct a cost and market impact review under this section.
614 (2) If the commission determines that a proposed material change is likely to have a
615significant negative impact on health care consumers in the commonwealth, including through
616significantly increased costs, significantly reduced quality, or significantly impaired access to
617health care services, including for at-risk, underserved and government payer patient
618populations, the commission may recommend modifications to the proposed material change to
619mitigate such impacts. Notwithstanding any general or special law to the contrary, failure to
620modify the proposed material change to substantially address such impacts identified by the
621commission shall constitute an unfair business practice under chapter 93A subject to challenge
622pursuant to section 4 of said chapter 93A but not pursuant to sections 9 or 11 of said chapter
62393A. The commission shall notify the office of the attorney general of any provider or provider
624organization’s failure to modify the proposed material change to substantially address such
625impacts.
626 (b) In addition to the grounds for a cost and market impact review set forth in subsection
627(a), if the commission finds, based on the center’s benchmark cycle report under section 16 of
628chapter 12C, that the average of the annual percentage changes in total health care expenditures
629during each year of the benchmark cycle exceeded the health care cost growth benchmark for 30 of 121
630that benchmark cycle, the commission may conduct a cost and market impact review of any
631provider organization identified by the center under section 18 of said chapter 12C.
632 (c)(1) The commission shall initiate a cost and market impact review by sending the
633provider or provider organization notice of a cost and market impact review, which shall explain
634the basis for the review and the particular factors that the commission seeks to examine through
635the review. The provider or provider organization shall submit to the commission, within 21 days
636of the commission’s notice, a written response to the notice, including, but not limited to, any
637information or documents sought by the commission that are described in the commission’s
638notice. The commission may require that any provider, provider organization, payer, investor or
639other party associated with a given transaction submit documents and information in connection
640with a notice of material change or a cost and market impact review under this section. The
641commission may also require, for a period of 5 years following the completion of a material
642change, that any provider or provider organization submit data and information to assess the
643post-transaction impacts of a material change and compliance with any commitments or
644conditions agreed to by the parties. The commission shall keep confidential all nonpublic
645information and documents obtained under this section and shall not disclose the information or
646documents to any person without the consent of the provider or payer that produced the
647information or documents, except in a preliminary report or final report under this section if the
648commission believes that such disclosure should be made in the public interest after taking into
649account any privacy, trade secret or anti-competitive considerations. The confidential
650information and documents shall not be public records and shall be exempt from disclosure
651under clause Twenty-sixth of section 7 of chapter 4 or section 10 of chapter 66. 31 of 121
652 (2) For any material change involving significant new for-profit investment in,
653acquisitions of the assets of or ownership or direct or indirect control of a provider or provider
654organization by a for-profit entity, the for-profit entity, and the parent company or person or
655persons controlling the for-profit entity, if any, will be required to submit, at a minimum, the
656following information to complete the notice: (i) information regarding the capital structure,
657general financial condition, ownership and management of the for-profit entity and any person
658controlling the for-profit entity; (ii) the identity and relationship of every member of the for-
659profit entity; (iii) fully audited financial information for the preceding 5 fiscal years or for such
660lesser period as the for-profit entity and any predecessors thereof shall have been in existence;
661(iv) any plans or proposals to liquidate such provider or provider organization, to sell its assets or
662merge or consolidate it with any person, or to make any other material change in its business or
663corporate structure or management; (v) fully audited financial information of all health care
664entities acquired by the for-profit entity, the parent company and person or persons controlling
665the for-profit entity, for the preceding 5 fiscal years or for such lesser period as the for-profit
666entity and any predecessors thereof shall have been in existence as well as other financial
667information the commission deems relevant, including, but not limited to, bankruptcy filings,
668sales of non-clinical assets and dividend recapitalizations; (vi) operational information regarding
669health care entities acquired by the acquiring party or person or persons controlling the acquiring
670party for the preceding 10 fiscal years or for such lesser period as such acquiring party and any
671predecessors thereof shall have been in existence, including, but not limited to, reduction or
672closure of health care services; and (vii) such additional information as the commission may
673deem necessary or appropriate for the protection of essential health services or to evaluate the
674material change notice. 32 of 121
675 (d) A cost and market impact review may examine factors relating to the provider or
676provider organization’s business and its relative market position, including, but not limited to: (i)
677the provider or provider organization’s size and market share within its primary service areas by
678major service category and within its dispersed service areas; (ii) the provider or provider
679organization’s prices for services, including its relative price compared to other providers for the
680same services in the same market; (iii) the provider or provider organization’s health status
681adjusted total medical expense, including its health status adjusted total medical expense
682compared to similar providers; (iv) the quality of the services provided by the provider or
683provider organization, including patient experience; (v) provider cost and cost trends in
684comparison to total health care expenditures statewide; (vi) the availability and accessibility of
685services similar to those provided, or proposed to be provided, through the provider or provider
686organization within its primary service areas and dispersed service areas; (vii) the provider or
687provider organization’s impact on competing options for the delivery of health care services
688within its primary service areas and dispersed service areas, including, if applicable, the impact
689on existing service providers of a provider or provider organization’s expansion, affiliation,
690merger or acquisition, to enter a primary or dispersed service area in which it did not previously
691operate; (viii) the methods used by the provider or provider organization to attract patient volume
692and recruit or acquire health care professionals or facilities; (ix) the role of the provider or
693provider organization in serving at-risk, underserved and government payer patient populations,
694including individuals with behavioral, substance use disorder and mental health conditions,
695within its primary service areas and dispersed service areas; (x) the role of the provider or
696provider organization in providing low margin or negative margin services within its primary
697service areas and dispersed service areas; (xi) consumer concerns, including, but not limited to, 33 of 121
698complaints or other allegations that the provider or provider organization has engaged in any
699unfair method of competition or any unfair or deceptive act or practice; (xii) the cumulative
700impact of mergers, acquisitions, affiliations or joint ventures on the health care market over a
701reasonable period of time, as defined by the commission; (xiii) alignment with the state health
702plan and any focused assessments conducted pursuant to section 22; and (xiv) any other factors
703that the commission determines to be in the public interest.
704 (e) The commission shall make factual findings and issue a preliminary report on the cost
705and market impact review. In the report, the commission shall identify any provider or provider
706organization that meets all of the following: (i) the provider or provider organization has, or
707likely will have as a result of the proposed material change, a dominant market share for the
708services it provides; (ii) the provider or provider organization charges, or likely will charge as a
709result of the proposed material change, prices for services that are materially higher than the
710median prices charged by all other providers for the same services in the same market; and (iii)
711the provider or provider organization has, or likely will have as a result of the proposed material
712change, a health status adjusted total medical expense that is materially higher than the median
713total medical expense of comparable providers in the same area.
714 (f) Within 30 days after issuance of a preliminary report, the provider or provider
715organization may respond in writing to the findings in the report. The commission shall then
716issue its final report. The commission shall refer to the attorney general its report on any provider
717or provider organization that meets all 3 criteria under subsection (e). The commission shall
718issue its final report on the cost and market impact review within 185 days from the date that the
719provider or provider organization has submitted a completed notice to the commission under the
720commission’s regulations; provided, however, that the provider or provider organization has 34 of 121
721certified substantial compliance with the commission’s requests for data and information
722pursuant to subsection (c) within 21 days of the commission’s notice or by a later date set by
723mutual agreement of the provider or provider organization and the commission.
724 (g) Nothing in this section shall prohibit a proposed material change under subsection (a);
725provided, however, that any proposed material change shall not be completed: (i) until not later
726than 30 days after the commission has issued its final report; or (ii) if the attorney general brings
727an action as described in paragraph (2) of subsection (a) or subsection (h), while such action is
728pending and prior to a final judgment being issued by a court of competent jurisdiction,
729whichever is later.
730 (h) A provider or provider organization that meets the criteria in subsection (e) has
731engaged, or through a material change will engage, in an unfair method of competition or unfair
732and deceptive trade practice subject to challenge pursuant to section 4 of chapter 93A, but not
733sections 9 or 11 of said chapter 93A. The attorney general may take action under said chapter
73493A or any other law to protect consumers in the health care market, including by bringing an
735action seeking to restrain such violation of said chapter 93A. The commission’s final report may
736be evidence in any such action brought by the attorney general.
737 (i) Nothing in this section shall limit the authority of the attorney general to protect
738consumers in the health care market under any other law.
739 (j) The commission shall adopt regulations for conducting cost and market impact
740reviews and for administering this section. These regulations shall include definitions of material
741change and non-material change, primary service areas, dispersed service areas, dominant market
742share, materially higher prices, materially higher health status adjusted total medical expenses 35 of 121
743and any other terms as necessary to provide market participants with appropriate notice. These
744regulations may identify filing thresholds in connection with this section; provided, however,
745that the commission shall determine that multiple mergers, acquisitions or affiliations over time
746may together meet such thresholds. All regulations promulgated by the commission shall comply
747with chapter 30A.
748 (k) Nothing in this section shall limit the application of other laws or regulations that may
749be applicable to a provider or provider organization, including laws and regulations governing
750insurance.
751 (l) Upon issuance of its final report pursuant to subsection (f), the commission shall
752provide a copy of said final report to the department of public health. The final report shall be
753included in the written record and considered by the department of public health during its
754review of an application for determination of need under section 25C of chapter 111 and
755considered where relevant in connection with licensure or other regulatory actions involving the
756provider or provider organization.
757 SECTION 32. Said chapter 6D is hereby further amended by adding the following 2
758sections:-
759 Section 22. (a)(1) Not less than once every 5 years, the commission shall develop a state
760health plan in consultation with the executive office of health and human services, the
761department of public health, the office of Medicaid, the department of mental health, the division
762of insurance, the executive office of elder affairs, the center for health information and analysis
763and other state agencies as appropriate. 36 of 121
764 (2) The state health plan shall identify: (i) the current and anticipated needs of the
765commonwealth for health care services, providers, programs and facilities; (ii) the existing health
766care resources available to meet those needs; (iii) recommendations for the appropriate supply
767and distribution of resources, workforce, programs, capacities, technologies and services on a
768statewide and regional basis; (iv) major barriers preventing communities and residents from
769accessing needed health care; (v) priorities for addressing those barriers; and (vi)
770recommendations for any further legislative or other state action to assist the commonwealth in
771achieving the recommendations identified in the plan.
772 (3) The state health plan shall be based on data from all available sources, including data
773collected by the commission, the center for health information and analysis, the executive office
774of health and human services, the department of public health, the office of Medicaid, the
775department of mental health, the division of insurance, the executive office of elder affairs, the
776board of registration in medicine, the bureau of health professions licensure, the office of the
777attorney general and other state agencies as appropriate. All such agencies shall provide data and
778information necessary for the commission to create the plan.
779 (4) The state health plan shall include recommendations across a range of health care
780services, including, but not limited to: (i) acute care; (ii) non-acute care; (iii) specialty care,
781including, but not limited to, burn, coronary care, cancer care, neonatal care, post-obstetric and
782post-operative recovery care, pulmonary care, renal dialysis and surgical, including trauma and
783intensive care units; (iv) skilled nursing facilities; (v) assisted living facilities; (vi) long-term care
784facilities; (vii) ambulatory surgical centers; (viii) office-based surgical centers; (ix) urgent care
785centers; (x) home health; (xi) adult and pediatric behavioral health and mental health services
786and supports; (xii) substance use disorder treatment and recovery services; (xiii) emergency care; 37 of 121
787(xiv) ambulatory care services; (xv) primary care resources; (xvi) pediatric care services; (xvii)
788pharmacy and pharmacological services; (xviii) family planning services; (xix) obstetrics and
789gynecology and maternal health services; (xx) allied health services, including, but not limited
790to, optometric care, chiropractic services, oral health care and midwifery services; (xxi) federally
791qualified health centers and free clinics; (xxii) technologies or equipment defined as innovative
792services or new technologies by the department of public health pursuant to section 25B of
793chapter 111; (xxiii) hospice and palliative care service; (xxiv) health screening and early
794intervention services; and (xxv) any other service or resource identified by the commission.
795 (5) The goal of the state health plan shall be to promote the appropriate and equitable
796distribution of health care resources across geographic regions of the commonwealth based on
797the needs of the population on a statewide basis and the needs of particular geographic and
798demographic groups. The state health plan shall seek to support the commonwealth's goals of: (i)
799maintaining and improving the quality of and access to health care services; (ii) ensuring a stable
800and adequate health care workforce; (iii) meeting the health care cost growth benchmark
801established pursuant to section 9; (iv) supporting innovative health care delivery and alternative
802payment models as identified by the commission; (v) reducing unnecessary duplication of health
803care resources; (vi) advancing health equity and addressing disparities in the health care system
804based on the needs of particular demographic factors, including, but not limited to, race,
805ethnicity, immigration status, sexual orientation, gender identity, geographic location, age,
806language spoken, ability and socioeconomic status; (vii) integrating oral health, mental health,
807behavioral and substance use disorder treatment services with overall medical care; (viii)
808aligning housing, health care and home care to improve overall health outcomes and reduce
809costs; (ix) tracking trends in utilization and promoting the best standards of care; and (x) 38 of 121
810ensuring equitable access to health care resources across geographic regions of the
811commonwealth.
812 (6) The commission shall consult with the advisory council established pursuant to
813section 4 in the development of the state health plan.
814 (7) In developing the state health plan, the commission, in consultation with the
815department of public health, shall conduct at least 1 public hearing seeking input on the state
816health plan and shall give interested persons an opportunity to submit their views orally and in
817writing. In addition, the commission may create and maintain a website to allow members of the
818public to submit comments electronically and review comments submitted by others.
819 (8) The commission may require the submission of data and documents from providers,
820provider organizations and payers to support creation of the state health plan; provided, that the
821information is not already required to be reported to another state agency and accessible to the
822commission. Nonpublic clinical, financial, strategic or operational documents or information
823provided to the commission in connection with this section shall be subject to section 2A.
824 (b)(1) In addition to the state health plan, the commission shall conduct regular, focused
825assessments of provider supply and distribution in relation to projected need in at least 1 specific
826service line. Each assessment shall be conducted in consultation with other state agencies as
827appropriate, including, but not limited to, the executive office of health and human services, the
828department of public health, the department of mental health, the office of Medicaid, the division
829of insurance, the center for health information and analysis, the executive office of elder affairs,
830the board of registration in medicine, the bureau of health professions licensure and the office of
831the attorney general. All such agencies shall provide data and information necessary for the 39 of 121
832commission to conduct the assessment. The commission shall consider available state and
833national data and academic research on health service supply and need and relevant community
834health needs assessments by non-profit hospitals and other organizations and other individual
835and community statements of need.
836 (2) Each focused assessment shall examine at least 1 specific service line and at least 1
837relevant region and may examine other factors in the public interest, such as populations served,
838as appropriate. The service lines and regions shall be identified and prioritized for assessment by
839the commission in consultation with the above-referenced agencies, as consistent with available
840resources. In prioritizing service lines and regions, the commission may consider factors
841including, but not limited to: (i) services with limited alternatives or substitutions; (ii) services
842where supply has been shown to be misaligned with need nationally or in academic research; (iii)
843services or regions undergoing significant changes in ownership, supply, or distribution; (iv)
844services or regions with evidence of access challenges or barriers, particularly for vulnerable
845populations; (v) input from the advisory council established pursuant to section 4; and (vi)
846requests for analysis from the executive office of health and human services or other agencies;
847provided, that prioritized service lines under this paragraph shall include primary care and
848behavioral health.
849 (3) Each assessment may include findings that include, but are not limited to: (i) the
850extent to which supply of a given service line aligns with projected need at the statewide or
851regional level; (ii) health system factors driving any documented health disparities; (iii) services
852or providers, including in a specific geographic area, that are critical to the proper functioning of
853the health care system; (iv) estimates of where and how many additional units of service would
854be needed in the state or in a specific geographic area to meet projected need; (v) identification 40 of 121
855of barriers impacting accessibility of available supply by specific populations; and (vi) policy
856recommendations to address the drivers of disparities, access barriers and areas of misalignment
857of need and supply.
858 (4) The commission shall consult with the advisory council established pursuant to
859section 4 in the development of such focused assessments.
860 (5) The commission, in consultation with the department of public health, shall conduct
861at least 1 public hearing seeking input on each focused assessment and shall give interested
862persons an opportunity to submit testimony orally and in writing.
863 (6) The commission may require the submission of data and documents from payers,
864providers or provider organizations that offer a service that is the subject of an assessment
865conducted under this section; provided, that the information is not already reported to another
866state agency and made accessible to the commission. Nonpublic clinical, financial, strategic or
867operational documents or information provided to the commission in connection with this section
868shall be subject to section 2A.
869 (c) The commission shall publish analyses, reports and interpretations of information
870collected pursuant to this section to promote awareness of the distribution and nature of health
871care resources in the commonwealth.
872 (d) Biennially, not later than January 1, the commission shall file a report with the joint
873committee on health care financing , which shall include, but not be limited to: (i) a summary of
874the current state health plan and a description of focused assessments conducted during the past 2
875years; (ii) a summary of actions taken by the commission and progress made toward developing 41 of 121
876the state health plan and focused assessments during the past 2 years; and (iii) recommendations
877for further legislative action to assist the commission in its implementation of this section.
878 Section 23. (a) A provider or a provider organization in which a private equity firm has a
879financial interest shall not: (i) meet or exceed the maximum adjusted debt to adjusted EBITDA
880ratio; (ii) otherwise become highly leveraged, as determined by the commission; (iii) transact
881with an unsafe financial actor; (iv) for the period during which the private equity firm has a
882financial interest in the provider or provider organization, (A) provide capital distributions,
883including, but not limited, to cash dividends, stock dividends that are not strictly dilutive or any
884other similar distributions, (B) perform stock buybacks, stock redemptions or similar transactions
885or (C) pay to a private equity firm management fees or similar fees or costs; or (v) perform any
886other action or exceed any other metric the commission determines may cause a provider or
887provider organization to become financially distressed.
888 (b) Within 30 days of the commission receiving a referral from the center pursuant to
889paragraph (4) of subsection (e) of section 9 of chapter 12C or the commission becoming aware of
890a potential violation of subsection (a) pursuant to the filing of a completed notice of material
891change under section 13, the commission shall make a determination of whether there has been a
892violation. If the commission determines a violation has occurred, the commission shall require
893the provider to come into compliance with said subsection (a) and may set conditions that the
894provider or provider organization shall follow to come into compliance. The commission shall
895notify the provider or provider organization in writing of its determination, conditions, if any,
896and reasoning. The provider or provider organization shall have not less than 30 days to respond
897in writing and 10 days to request a hearing from the date of notification. If a hearing is requested,
898the hearing shall be held within 30 days of the commission’s receipt of the request. Within 10 42 of 121
899days of receiving written comments or holding any requested hearing, whichever is later, the
900commission shall notify the provider or provider organization in writing that the provider or
901provider organization is required to come into compliance with section (a) and which conditions,
902if any, shall go into effect. Upon providing notice, such requirements and conditions, if any, shall
903go into effect.
904 In making the determinations pursuant to subsection (a), the commission may consider all
905publicly available data and documents, including information submitted to the commission and
906the center under any authority. The commission may also solicit additional non-public
907information from providers to the extent necessary to achieve the purposes of this section. The
908commission shall keep confidential all nonpublic information and documents obtained under this
909section, and such information shall not be public records and shall be exempt from disclosure
910under clause Twenty-sixth of section 7 of chapter 4 or section 10 of chapter 66.
911 (c)(1) Within 3 months, or a shorter reasonable time as determined by the commission,
912the commission shall determine whether the provider or provider organization has substantially
913complied with its conditions or if no conditions were set, whether the provider or provider
914organization has come into compliance with subsection (a). The commission shall notify the
915provider or provider organization of its determination and reasoning, and the provider or
916provider organization shall have not less than 30 days to respond in writing and 10 days to
917request a hearing from the date of notification. If a hearing is requested, the hearing shall be held
918within 30 days of the commission’s receipt of the request. Within 10 days of receiving written
919comments and holding any requested hearing, whichever is later, the commission shall make a
920final determination and notify the provider or provider organization of the determination in
921writing. 43 of 121
922 (2) If the commission makes a final determination that the provider or provider
923organization has failed to substantially implement the commission’s conditions, or, if no
924conditions were set, to come in compliance with subsection (a), the department of public health
925may collect the bond deposited. The commission shall notify the department of public health of
926its determination and refer the provider or provider organization to the attorney general.
927 (3) Failure to substantially implement the commission’s conditions, or, if no conditions
928are set, failure to come in compliance with subsection (a) shall constitute a violation of said
929chapter 93A. Only the attorney general, or an organization representing workers who: (i) worked
930for the provider or provider organization; (ii) worked in the provider or provider organization’s
931facilities, if any; or (iii) contracted with the provider or provider organization, may bring an
932action under chapter 93A for such a violation. The commission’s final determination may be
933used as prima facie evidence of a violation of said chapter 93A.
934 (d) A private equity firm shall deposit, upon submission of a notice of material change
935pursuant to section 13 of chapter 6D, a bond with the department of public health ensuring that
936the provisions of subsection (a) shall not be violated; provided, however, that the private equity
937firm shall not use any of the provider or provider organization’s assets or property as security for
938the bond, pay for the bond by placing debt on the provider or provider organization or otherwise
939permit the provider or provider organization to pay the bond on the private equity firm’s behalf
940or allow the provider or provider organization to be liable for the bond.
941 SECTION 33. Section 5A of chapter 12 of the General Laws, as so appearing, is hereby
942amended by striking out, in line 26, the words “or ‘knowingly’” and inserting in place thereof the
943following words:- , “knowingly” or “knows”. 44 of 121
944 SECTION 34. Said section 5A of said chapter 12, as so appearing, is hereby further
945amended by inserting after the definition of “Overpayment” the following definition:-
946 “Ownership or investment interest”, any: (1) direct or indirect possession of equity in the
947capital, stock or profits totaling more than 10 per cent of an entity; (2) interest held by an
948investor or group of investors who engages in the raising or returning of capital and who invests,
949develops or disposes of specified assets; (3) interest held by a pool of funds by investors,
950including a pool of funds managed or controlled by private limited partnerships, if those
951investors or the management of that pool or private limited partnership employ investment
952strategies of any kind to earn a return on that pool of funds; or (4) interest held by a real estate
953investment trust.
954 SECTION 35. Section 5B of said chapter 12, as so appearing, is hereby amended by
955striking out, in line 29, the word “or”, the second time it appears.
956 SECTION 36. Said section 5B of said chapter 12, as so appearing, is hereby further
957amended by inserting after the word “applicable”, in lines 38 and 39, the following words:- ; or
958(11) has an ownership or investment interest in any person who violates clauses (1) to (10),
959inclusive, knows about the violation, and fails to disclose the violation to the commonwealth or a
960political subdivision thereof within 60 days of identifying the violation.
961 SECTION 37. Section 11N of said chapter 12, as so appearing, is hereby amended by
962striking out, in line 7, the words “or provider organization” and inserting in place thereof the
963following words:- , provider organization, private equity firm, real estate investment trust,
964management services organization, pharmaceutical manufacturing company and pharmacy
965benefit manager. 45 of 121
966 SECTION 38. Said section 11N of said chapter 12, as so appearing, is hereby further
967amended by striking out subsection (b) and inserting in place thereof the following subsection:-
968 (b) The attorney general may investigate any provider organization referred to the
969attorney general by the health policy commission under chapter 6D to determine whether the
970provider organization engaged in unfair methods of competition or anti-competitive behavior in
971violation of chapter 93A or any other law, and, if appropriate, take action under said chapter 93A
972or any other law to protect consumers in the health care market, including, but not limited to, an
973action for injunctive relief.
974 SECTION 39. Section 1 of chapter 12C of the General Laws, as so appearing, is hereby
975amended by inserting after the definition of “Ambulatory surgical center services” the following
976definition:-
977 “Benchmark cycle”, a period of 2 consecutive calendar years during which the projected
978annualized growth rate in total health care expenditures in the commonwealth is calculated
979pursuant to section 9 of chapter 6D and monitored pursuant to section 10 of said chapter 6D.
980 SECTION 40. Said section 1 of said chapter 12C, as so appearing, is hereby further
981amended by inserting after the definition of “Fee-for-service” the following definition:-
982 “Financial interest”, when a private equity firm or its corporate affiliate has a direct or
983indirect ownership share of, or controlling interest in, or is a holder of significant debt from a
984provider or provider organization or the provider or provider organization’s corporate affiliates 46 of 121
985 SECTION 41. Said section 1 of said chapter 12C, as so appearing, is hereby further
986amended by striking out the definition of “Health care cost growth benchmark” and inserting in
987place thereof the following 2 definitions:-
988 “Health care cost growth benchmark”, the projected annualized growth rate in total health
989care expenditures in the commonwealth during a benchmark cycle as established in section 9 of
990chapter 6D.
991 “Health care entity”, as defined in section 1 of chapter 6D.
992 SECTION 42. Said section 1 of said chapter 12C, as so appearing, is hereby further
993amended by inserting after the definition of “Health care services” the following 2 definitions:-
994 “Health disparities”, preventable differences in the burden of disease, injury, violence or
995opportunities to achieve optimal health that are experienced by socially disadvantaged
996populations.
997 “Health equity”, the state in which a health system offers the infrastructure, facilities,
998services, geographic coverage, affordability and all other relevant features, conditions and
999capabilities that will provide all people with the opportunity and reasonable expectation that they
1000can reach their full health potential and well-being and are not disadvantaged in access to health
1001care by their race, ethnicity, language, disability, age, gender, gender identity, sexual orientation,
1002social class, intersections among these communities or identities or their socially determined
1003circumstances. 47 of 121
1004 SECTION 43. Said section 1 of said chapter 12C, as so appearing, is hereby further
1005amended by inserting after the definition of “Major service category” the following 2
1006definitions:-
1007 “Management services organization”, a business that provides management or
1008administrative services to a provider or provider organization for compensation. “Maximum
1009adjusted debt to adjusted EBITDA ratio”, the highest ratio of total adjusted debt to adjusted
1010earnings before interest, taxes, depreciation and amortization the commission determines that a
1011provider or provider organization can have without becoming financially unstable; provided
1012further, that the commission, in consultation with the center, shall establish a standard method of
1013calculating and reporting total adjusted debt and adjusted earnings before interest, taxes,
1014depreciation and amortization; and provided further, that the methodology and reporting shall
1015include capitalized lease obligations.
1016 SECTION 44. Said section 1 of said chapter 12C, as so appearing, is hereby further
1017amended by inserting after the definition of “Patient-centered medical home” the following 3
1018definitions:-
1019 “Payer”, any entity, other than an individual, that pays providers for the provision of
1020health care services; provided, that “payer” shall include both governmental and private entities;
1021provided further, that “payer” shall include self-insured plans to the extent allowed under the
1022federal Employee Retirement Income Security Act of 1974.
1023 “Pharmaceutical manufacturing company”, an entity engaged in the: (i) production,
1024preparation, propagation, compounding, conversion or processing of prescription drugs, directly
1025or indirectly, by extraction from substances of natural origin, independently by means of 48 of 121
1026chemical synthesis or by a combination of extraction and chemical synthesis; or (ii) packaging,
1027repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
1028“pharmaceutical manufacturing company” shall not include a wholesale drug distributor licensed
1029under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said
1030chapter 112.
1031 “Pharmacy benefit manager”, a person, business or other entity, however organized, that,
1032directly or through a subsidiary, provides pharmacy benefit management services for prescription
1033drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self-
1034insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit
1035management services shall include, but not be limited to: (i) the processing and payment of
1036claims for prescription drugs; (ii) the performance of drug utilization review; (iii) the processing
1037of drug prior authorization requests; (iv) pharmacy contracting; (v) the adjudication of appeals or
1038grievances related to prescription drug coverage contracts; (vi) formulary administration; (vii)
1039drug benefit design; (viii) mail and specialty drug pharmacy services; (ix) cost containment; (x)
1040clinical, safety and adherence programs for pharmacy services; and (xi) managing the cost of
1041covered prescription drugs; provided further, that “pharmacy benefit manager” shall include a
1042health benefit plan sponsor that does not contract with a pharmacy benefit manager and manages
1043its own prescription drug benefits unless specifically exempted by the commission.
1044 SECTION 45. Said section 1 of said chapter 12C, as so appearing, is hereby further
1045amended by inserting after the definition of “Primary service area” the following definition:-
1046 “Private equity firm”, a publicly traded or non-publicly traded company that collects
1047capital investments from individuals or entities and purchases, as a parent company or through 49 of 121
1048another entity that it completely or partially owns or controls, a direct or indirect ownership share
1049of or controlling interest in, or otherwise obtains a financial interest in, a provider, provider
1050organization or management services organization; provided, however, that “private equity firm”
1051shall not include venture capital firms exclusively funding startups or other early-stage
1052businesses.
1053 SECTION 46. Said section 1 of said chapter 12C, as so appearing, is hereby further
1054amended by striking out the definition of “Provider organization” and inserting in place thereof
1055the following definition:-
1056 “Provider organization”, any corporation, partnership, business trust, association or
1057organized group of persons, which is in the business of health care delivery or management,
1058whether incorporated or not, that represents at least 1 health care providers in contracting with
1059carriers, third party administrators or public payers for the payments of health care services;
1060provided, that ''provider organization'' shall include, but not be limited to, physician
1061organizations, physician-hospital organizations, independent practice associations, provider
1062networks, accountable care organizations, management services organizations, providers that are
1063owned or controlled, fully or partially, by for-profit entities, including, but not limited to, private
1064equity firms, and any other organization that contracts with carriers, third party administrators or
1065public payers for payment for health care services; and provided, further that “provider
1066organization” shall not include any integrated care network that is owned and directed by a long-
1067term care providers.
1068 SECTION 47. Said section 1 of said chapter 12C, as so appearing, is hereby further
1069amended by inserting after the definition of “Quality measures” the following definition:- 50 of 121
1070 “Real estate investment trust”, a real estate investment trust as defined in 26 U.S.C. 856.
1071 SECTION 48. Said section 1 of said chapter 12C, as so appearing, is hereby further
1072amended by inserting after the definition of “Total health care expenditures” the following 2
1073definitions:-
1074 “Total medical expenses”, the total cost of care for the patient population associated with
1075a provider organization based on allowed claims for all categories of medical expenses and all
1076non-claims related payments to providers.
1077 “Unsafe financial actor”, a private equity firm or real estate investment trust that had a
1078financial interest in a provider or provider organization that closed, declared bankruptcy or
1079otherwise discontinued its operations within 15 years of the private equity firm or real estate
1080investment trust’s financial interest in the provider or provider organization.
1081 SECTION 49. Section 2A of said chapter 12C, as so appearing, is hereby amended by
1082inserting after the word “cybersecurity”, in line 9, the following words:- and 1 of whom shall
1083have experience in health equity advocacy.
1084 SECTION 50. Section 3 of said chapter 12C, as so appearing, is hereby amended by
1085striking out, in line 11, the word “benchmark” and inserting in place thereof the following
1086words:- and affordability benchmarks.
1087 SECTION 51. Said section 3 of said chapter 12C, as so appearing, is hereby further
1088amended by striking out, in line 12, the words “section 9” and inserting in place thereof the
1089following words:- sections 9 and 9A. 51 of 121
1090 SECTION 52. The first paragraph of section 7 of said chapter 12C, as so appearing, is
1091hereby amended by adding the following sentence:-
1092 Each pharmaceutical manufacturing company and pharmacy benefit manager shall pay to
1093the commonwealth an amount for the estimated expenses of the center and for the other purposes
1094described in this chapter.
1095 SECTION 53. Said section 7 of said chapter 12C, as so appearing, is hereby further
1096amended by striking out, in lines 8 and 42, the figure “33” and inserting in place thereof, in each
1097instance, the following figure:- “25”.
1098 SECTION 54. Said section 7 of said chapter 12C, as so appearing, is hereby further
1099amended by adding following 3 paragraphs:- To the maximum extent under federal law,
1100provided that such assessment shall not result in any reduction of federal financial participation
1101in Medicaid, the assessed amount for pharmaceutical manufacturing companies shall be not less
1102than 25 per cent of the amount appropriated by the general court for the expenses of the center
1103minus amounts collected from: (i) filing fees; (ii) fees and charges generated by the center's
1104publication or dissemination of reports and information; and (iii) federal matching revenues
1105received for these expenses or received retroactively for expenses of predecessor agencies.
1106Pharmaceutical manufacturing companies shall pay such assessed amount multiplied by the ratio
1107of the pharmaceutical manufacturing company’s gross sales of outpatient prescription drugs
1108dispensed in the commonwealth or similar measure determined by the center consistent with
1109applicable federal requirements.
1110 To fund the operations of the licensure of pharmacy benefit managers to the maximum
1111extent allowed by federal law and to the extent that the assessment will not result in any 52 of 121
1112reduction of federal financial participation in Medicaid, the assessed amount for pharmacy
1113benefit managers shall be not less than 25 per cent of the amount appropriated by the general
1114court for the expenses of the center minus amounts collected from: (i) filing fees; (ii) fees and
1115charges generated by the center's publication or dissemination of reports and information; and
1116(iii) federal matching revenues received for these expenses or received retroactively for expenses
1117of predecessor agencies. Pharmacy benefit managers shall pay such assessed amount multiplied
1118by the ratio of the pharmacy benefit manager’s gross revenue related to outpatient prescription
1119drugs dispensed in the commonwealth or similar measure determined by the center consistent
1120with applicable federal requirements. In no event may this assessment, when combined with the
1121assessment of pharmacy benefit managers in section 6 of chapter 6D and the pharmacy benefit
1122manager licensing fee in section 2 of chapter 176Y, exceed the commonwealth’s estimated
1123expense in operating the pharmacy benefit manager licensure program. Each pharmaceutical
1124manufacturing company and each pharmacy benefit manager shall make a preliminary payment
1125to the center on October 1 of each year in an amount equal to 1/2 of the initial year’s and,
1126subsequently, the previous year's total assessment. Thereafter, each pharmaceutical
1127manufacturing company and each pharmacy benefit manager shall pay, within 30 days’ notice
1128from the center, the balance of the total assessment for the current year as determined by the
1129center.
1130 SECTION 55. Section 8 of said chapter 12C, as so appearing, is hereby amended by
1131inserting after the word “entities”, in line 5, the following words:- , including, but not limited to,
1132private equity firms, real estate investment trusts and management services organizations.
1133 SECTION 56. Said section 8 of said chapter 12C, as so appearing, is hereby further
1134amended by inserting after the word “statements”, in line 23, the following words:- , including 53 of 121
1135the audited financial statements of the parent organization’s out-of-state operations, private
1136equity firms, real estate investment trusts and management services organizations,.
1137 SECTION 57. Said section 8 of said chapter 12C, as so appearing, is hereby further
1138amended by striking out, in line 49, the words “and (6)” and inserting in place thereof the
1139following words:- (6) investments; and (7) information on any relationships with private equity
1140firms, real estate investment trusts and management services organizations; and (8).
1141 SECTION 58. Said chapter 12C is hereby further amended by striking out section 9, as so
1142appearing, and inserting in place thereof the following section:-
1143 Section 9. (a) The center, in consultation with the commission, shall promulgate
1144regulations to require that provider organizations registered under section 11 of chapter 6D
1145annually report the data as the center considers necessary to better protect the public interest in
1146monitoring the financial conditions, organizational structure, business practices, clinical services
1147and market share of each registered provider organization. The center may assess administrative
1148fees on provider organizations in an amount to help defray the center's costs in complying with
1149this section. The center may specify in regulations uniform reporting standards and reporting
1150thresholds as it determines necessary.
1151 (b) The center shall require registered provider organizations to report information
1152necessary to achieve the goals described in subsection (a), which may include, but shall not be
1153limited to: (i) organizational charts showing the ownership, governance and operational structure
1154of the provider organization, including any clinical affiliations and community advisory boards;
1155(ii) the number of affiliated health care professional full-time equivalents by license type,
1156specialty, name and address of practice locations and whether the professional is employed by 54 of 121
1157the organization; (iii) the name and address of licensed facilities by license number, license type
1158and capacity in each major service category; (iv) the name, address and capacity of all other
1159locations where the provider organization, or any of its affiliates, delivers health care services,
1160including those services listed in paragraph (4) of subsection (a) of section 22 of chapter 6D; (v)
1161counts and capacity estimates of health care equipment as defined by the center, including
1162imaging equipment; (vi) a comprehensive financial statement, including information on parent
1163entities, including their out-of-state operations, and corporate affiliates, including private equity
1164firms, real estate investment trusts and management services organizations, as applicable, and
1165including details regarding annual costs, annual receipts, realized capital gains and losses,
1166accumulated surplus and accumulated reserves; (vii) information on stop-loss insurance and any
1167non-fee-for-service payment arrangements; (viii) information on clinical quality, care
1168coordination and patient referral practices; (ix) information regarding expenditures and funding
1169sources for payroll, teaching, research, advertising, taxes or payments-in-lieu-of-taxes and other
1170non-clinical functions; (x) information regarding charitable care and community benefit
1171programs; (xi) for any risk-bearing provider organization, a certificate from the division of
1172insurance under chapter 176U; (xii) information regarding other assets and liabilities that may
1173affect the financial condition of the provider organization or the provider organization’s
1174facilities, including, but not limited to, real estate sale-leaseback arrangements with real estate
1175investment trusts; and (xiii) such other information as the center considers appropriate as set
1176forth in the center's regulations; provided, however, that the center shall coordinate with the
1177commission and the division of insurance to obtain information directly from the commission;
1178provided further, that the center shall consider the administrative burden of reporting when
1179developing reporting requirements. The center may, in consultation with the division of 55 of 121
1180insurance and the commission, merge similar reporting requirements where appropriate. The
1181center, in its discretion, may specify additional data elements in a given reporting year to support
1182the development of the state health plan or the focused assessments defined in said section 22 of
1183said chapter 6D.
1184 (c) Annual reporting shall be in a form provided by the center. The center shall
1185promulgate regulations that define criteria for waivers from certain annual reporting
1186requirements under this section. Criteria for waivers may include operational size of the provider
1187organization, the provider organization's annual net patient service revenue, the degree of risk
1188assumed by the provider organization and other criteria as the center considers appropriate.
1189 (d) Notwithstanding the annual reporting requirements under this section, the center may
1190require in writing, at any time, additional information that is reasonable and necessary to
1191determine the financial condition, organizational structure, business practices, clinical services or
1192market share of a registered provider organization.
1193 (e) The center shall develop and maintain an inventory of health care resources on its
1194website in a form usable by the public; provided, that the extracts must include information on
1195the geographic distribution of clinicians, facilities, equipment or any other health care resources.
1196Such inventory shall be derived from all available data, including, but not limited to, data
1197collected under this section and data collected by other state agencies. Agencies that license,
1198register, regulate or otherwise collect cost, quality or other data concerning health care resources
1199shall provide the center and the commission such data and information necessary to develop and
1200maintain the inventory required by this this section. 56 of 121
1201 (f) The center may enter into interagency agreements with the commission and other state
1202agencies to effectuate the goals of this section.
1203 (g)(1) The center shall also collect and analyze such data as it considers necessary to
1204protect the public interest in monitoring financial conditions of registered provider organizations
1205and compliance with subsection (a) of section 23 of chapter 6D by registered provider
1206organizations with private equity investment. To effectuate this subsection, the center may: (i)
1207modify uniform reporting requirements; (ii) require registered provider organizations with
1208private equity investment to report required information quarterly; (iii) require relevant
1209information from private equity firms and their affiliates; and (iv) communicate confidentially
1210with registered provider organizations as the center deems necessary.
1211 (2) The information shall be analyzed on an industry-wide and provider-specific basis
1212and shall include, but not be limited to: (i) gross and net patient service revenues; (ii) sources of
1213revenue; (iii) total payroll as a per cent of operating expenses and the salary and benefits of the
1214top 10 highest compensated employees, identified by position description and specialty; and (iv)
1215other relevant measures of financial health or distress.
1216 (3) The center shall publish annual reports and establish a continuing program of
1217investigation and study of financial trends among registered provider organizations, including an
1218analysis of systemic instabilities or inefficiencies that contribute to financial distress. The reports
1219shall include an identification and examination of: (i) registered provider organizations that the
1220center considers to be in financial distress, including any at risk of closing or discontinuing
1221essential health services, as defined by the department of public health under section 51G of
1222chapter 111, as a result of financial distress; and (ii) registered provider organizations with 57 of 121
1223private equity investment that have violated subsection (a) of section 23 of chapter 6D. The
1224center may provide this information in the report it produces pursuant to subsection (c) of section
12258.
1226 (4) The center shall refer to the commission any provider in which a private equity firm
1227has a financial interest that has violated subsection (a) of section 23 of chapter 6D.
1228 SECTION 59. Section 10 of said chapter 12C, as so appearing, is hereby amended by
1229inserting after the word “of”, in line 21, the following words:- communities and purchaser.
1230 SECTION 60. Subsection (b) of said section 10 of chapter 12C, as so appearing, is
1231hereby further amended by striking out clause (8) and inserting in place thereof the following
1232clause:-
1233 (8) relative prices paid to every hospital or physician group in the payer’s network, by
1234type of provider, with hospital inpatient and outpatient prices listed separately and product type,
1235including health maintenance organization and preferred provider organization products.
1236 SECTION 61. Said subsection (b) of said section 10 of said chapter 12C, as so appearing,
1237is hereby further amended by striking out, in lines 56 to 61, inclusive, the words “and (11) a
1238comparison of relative prices for the payer’s participating health care providers by provider type
1239which shows the average relative price, the extent of variation in price, stated as a percentage,
1240and identifies providers who are paid more than 10 per cent, 15 per cent and 20 per cent above
1241and more than 10 per cent, 15 per cent and 20 per cent below the average relative price” and
1242inserting in place thereof the following words:- (11) information about prescription drug
1243utilization and spending for all covered drugs, including for generic drugs, brand-name drugs and
1244specialty drugs provided in an inpatient or outpatient setting or sold in a retail setting, including, 58 of 121
1245but not limited to, information sufficient to show the: (i) highest utilization drugs; (ii) drugs with
1246the greatest increases in utilization; (iii) drugs that are most impactful on plan spending, net of
1247rebates; (iv) drugs with the highest year-over-year price increases, net of rebates; (v) drugs with
1248the highest out-of-pocket costs including, but not limited to, coinsurances, copayments and
1249deductibles expended by patients; and (vi) drugs with the highest cost per prescription both gross
1250and net of rebates; (12) information on clinical quality, care coordination and patient referral
1251practices; and (13) a comparison of relative prices for the payer’s participating health care
1252providers by provider type, which shows the average relative price and the extent of variation in
1253price and identifies providers who are paid more than 10 per cent, 15 per cent and 20 per cent
1254above and more than 10 per cent, 15 per cent and 20 per cent below the average relative price.
1255 SECTION 62. Subsection (c) of said section 10 of said chapter 12C, as so appearing. is
1256hereby amended by striking out clause (8) and inserting in place thereof the following clause:-
1257 (8) relative prices paid to every hospital or physician group in the payer’s network, by
1258type of provider, with hospital inpatient and outpatient prices listed separately and product type,
1259including health maintenance organization and preferred provider organization products.
1260 SECTION 63. Said subsection (c) of said section 10 of said chapter 12C, as so appearing,
1261is hereby further amended by striking out, in lines 99 to 104, inclusive, the words “and (11) a
1262comparison of relative prices for the payer’s participating health care providers by provider type
1263which shows the average relative price, the extent of variation in price, stated as a percentage and
1264identifies providers who are paid more than 10 per cent, 15 per cent and 20 per cent above and
1265more than 10 per cent, 15 per cent and 20 per cent below the average relative price” and inserting
1266in place thereof the following words:- (11) information about prescription drug utilization and 59 of 121
1267spending for all covered drugs, including for generic drugs, brand-name drugs and specialty
1268drugs provided in an inpatient or outpatient setting or sold in a retail setting, including, but not
1269limited to, information sufficient to show the: (i) highest utilization drugs, (ii) drugs with the
1270greatest increases in utilization, (iii) drugs that are most impactful on plan spending, net of
1271rebates, (v) drugs with the highest year-over-year price increases, net of rebates, and (v) drugs
1272with the highest cost per prescription, both gross and net of rebates; (12) information on clinical
1273quality, care coordination and patient referral practices; and (13) a comparison of relative prices
1274for the payer’s participating health care providers by provider type, which shows the average
1275relative price and the extent of variation in price and identifies providers who are paid more than
127610 per cent, 15 per cent and 20 per cent above and more than 10 per cent, 15 per cent and 20 per
1277cent below the average relative price.
1278 SECTION 64. Said chapter 12C is hereby amended by inserting after section 10 the
1279following section:-
1280 Section 10A. (a) The center shall promulgate regulations necessary to ensure the uniform
1281annual reporting of information from pharmacy benefit managers certified under chapter 176Y,
1282including, but not limited to, data from the most recent calendar year detailing: (i) all discounts,
1283including the total dollar amount and percentage discount and rebates received from a
1284manufacturer for each drug on the pharmacy benefit manager's formularies; (ii) the total dollar
1285amount of all discounts and rebates that are retained by the pharmacy benefit manager for each
1286drug on the pharmacy benefit manager's formularies; (iii) actual total reimbursement amounts for
1287each drug the pharmacy benefit manager pays retail pharmacies after all direct and indirect
1288administrative and other fees that have been retrospectively charged to the pharmacies are
1289applied; (iv) the negotiated price health plans pay the pharmacy benefit manager for each drug 60 of 121
1290on the pharmacy benefit manager's formularies; (v) the amount, terms and conditions relating to
1291copayments, reimbursement options and other payments or fees associated with a prescription
1292drug benefit plan; and (vi) disclosure of any ownership interest the pharmacy benefit manager
1293has in a pharmacy or health plan with which it conducts business or any corporate affiliation
1294between the pharmacy benefit manager and the pharmacy or health plan with which it conducts
1295business; provided, however, that the center may examine or audit the financial records of a
1296pharmacy benefit manager for purposes of ensuring the information submitted pursuant to
1297regulations promulgated under this section is accurate.
1298 (b) The center shall analyze the information and data collected under subsection (a) and
1299shall publish an annual report summarizing, at minimum, the information collected under said
1300subsection (a) and comparing the information as it relates to pharmacy benefit managers certified
1301under chapter 176Y with respect to drugs provided to residents of the commonwealth.
1302 (c) Except as specifically provided otherwise by the center or under this chapter,
1303pharmacy benefit manager data collected by the center under this section shall not be a public
1304record under clause Twenty-sixth of section 7 of chapter 4 or chapter 66. The center may
1305confidentially provide pharmacy benefit manager data collected by the center under this section
1306to the health policy commission.
1307 SECTION 65. Said chapter 12C is hereby further amended by striking out section 11, as
1308appearing in the 2022 Official Edition, and inserting in place thereof the following section:-
1309 Section 11. The center shall ensure the timely reporting of information required under
1310sections 8 to 10, inclusive. The center shall notify entities required to submit data under this
1311chapter of any applicable reporting deadlines. The center shall notify, in writing, an entity, other 61 of 121
1312than a public payer required to submit data under this chapter, which has failed to meet a
1313reporting deadline and that failure to respond within 2 weeks of the receipt of the notice shall
1314result in penalties. The center shall assess a penalty against an entity other than a public health
1315care payer required to submit data under this chapter that fails, without just cause, to provide the
1316requested information within 2 weeks following receipt of the written notice required under this
1317paragraph, of not more than $25,000 per week for each week of delay after the 2-week period
1318following the reporting entity’s receipt of the written notice. Amounts collected under this
1319section shall be deposited in the Healthcare Payment Reform Fund, established under section 100
1320of 194 of the acts of 2011. The center shall notify the commission and the department of public
1321health if a provider or provider organization fails to timely report in accordance with this section,
1322or if the center has assessed a penalty under this section. Such notification shall be considered by
1323the commission in a cost and market impact review under section 13 of chapter 6D, and by the
1324department in determining licensure and suitability in accordance with section 51 of chapter 111
1325and for a determination of need under section 25C of said chapter 111. The center may
1326promulgate regulations to define “just cause” for the purpose of this section.
1327 SECTION 66. Section 12 of said chapter 12C, as so appearing, is hereby amended by
1328adding the following subsection:-
1329 (c) Notwithstanding any general or special law to the contrary, a provider, private health
1330care payer, public health care payer, agency, department, division, commission, board, authority
1331or other public or quasi-public entity in the commonwealth that collects patient information,
1332including personal data as defined in section 1 of chapter 66A, shall, upon a request from the
1333center, provide such data to the center for any purpose consistent with this chapter; provided,
1334however, that the disclosure of such information shall be in compliance with federal law. 62 of 121
1335 SECTION 67. Said chapter 12C is hereby further amended by striking out section 14, as
1336so appearing, and inserting in place thereof the following section:-
1337 Section 14. (a)(1) Not later than March 1 in each even-numbered year, the center, in
1338consultation with the statewide advisory committee established pursuant to subsection (c), shall
1339establish a standard set of measures of health care provider quality and health system
1340performance, hereinafter referred to as the “standard quality measure set”, for use in: (i) contracts
1341between payers, including between the commonwealth and carriers and between health care
1342providers, provider organizations and accountable care organizations, which incorporate quality
1343measures into payment terms, including the designation of a set of core measures and a set of
1344non-core measures; (ii) assigning tiers to health care providers in the design of any health plan;
1345(iii) consumer transparency websites and other methods of providing consumer information; (iv)
1346monitoring system-wide performance; and (v) reducing provider administrative burden related to
1347quality measure reporting.
1348 (2) The standard quality measure set shall designate: (i) core measures that shall be used
1349in contracts that incorporate quality measures into payment terms between payers, including the
1350commonwealth and carriers, and health care providers, including provider organizations and
1351accountable care organizations, and shall meet the core criteria set by the statewide advisory
1352committee pursuant to paragraph (3) of subsection (c); and (ii) a menu of non-core measures that
1353may be used in such contracts. The standard quality measure set shall allow for innovation and
1354the development of outcome measures for quality and safety. If the standard quality measure set
1355established by the center differs from the recommendations of the statewide advisory committee,
1356the center shall issue a written report detailing each area of disagreement and the rationale for the
1357center’s decision. 63 of 121
1358 (b) The center shall develop uniform reporting requirements for the standard quality
1359measure set for each health care provider facility, medical group or provider group in the
1360commonwealth; provided, however, that the center shall prioritize the development of uniform
1361reporting requirements for primary care and behavioral health providers; and provided further,
1362that the uniform reporting requirements shall not increase provider administrative burden related
1363to quality measure reporting.
1364 (c)(1) The center shall convene a statewide advisory committee which shall make
1365recommendations for the standard quality measure set to: (i) ensure consistency in the use of
1366quality and safety measures in contracts between payers, including the commonwealth and
1367carriers, and health care providers in the commonwealth; (ii) ensure consistency in methods for
1368the assignment of tiers to providers in the design of any health plan; (iii) improve quality and
1369safety of care; (iv) improve transparency for consumers and employers; (v) improve health
1370system monitoring and oversight by relevant state agencies; and (vi) reduce administrative
1371burdens.
1372 (2) The statewide advisory committee shall consist of commissioner of insurance or a
1373designee, who shall serve as co-chair; the executive director of the health policy commission, or
1374their designee, who shall serve as co-chair; the executive director of the center; the executive
1375director of the Betsy Lehman center for patient safety and medical error reduction; the executive
1376director of the group insurance commission; the secretary of elder affairs; the assistant secretary
1377for MassHealth; the commissioner of the department of public health; the commissioner of the
1378department of mental health; and 11 members who shall be appointed by the governor, 1 of
1379whom shall be a representative of Massachusetts Health and Hospital Association, Inc., 1 of
1380whom shall be a representative of the Massachusetts League of Community Health Centers, Inc., 64 of 121
13811 of whom shall be a representative the Massachusetts Medical Society, 1 of whom shall be a
1382registered nurse licensed to practice in the commonwealth who practices in a patient care setting,
13831 of whom shall be a representative of a labor organization representing health care workers, 1 of
1384whom shall be a behavioral health provider, 1 of whom shall be a long-term supports and
1385services provider, 1 of whom shall be a representative of Blue Cross and Blue Shield of
1386Massachusetts, Inc., 1 of whom shall be a representative of Massachusetts Association of Health
1387Plans, Inc., 1 of whom shall be a representative of a specialty pediatric provider and 1 of whom
1388shall be a representative of consumers. Members appointed to the statewide advisory committee
1389shall have experience with and expertise in health care quality measurement.
1390 (3) The statewide advisory committee shall meet quarterly to develop recommendations
1391for the core measure and non-core measures to be adopted in the standard quality measure set for
1392use in: (i) contracts between payers, including the commonwealth and carriers, and health care
1393providers, provider organizations and accountable care organizations, including the designation
1394of a set of core measures and a set of non-core measures; (ii) assigning tiers to health care
1395providers in the design of any health plan; (iii) consumer transparency websites and other
1396methods of providing consumer information; (iv) monitoring system-wide performance; and (v)
1397reducing provider administrative burdens related to quality measure reporting.
1398 (4) In developing its recommendations for the standard quality measure set, the statewide
1399advisory committee shall incorporate recognized quality and safety measures including, but not
1400limited to, measures used by the Centers for Medicare and Medicaid Services, the group
1401insurance commission, carriers and providers and provider organizations in the commonwealth
1402and other states, as well as other valid measures of health care provider performance and
1403outcomes, including patient-reported outcomes and functional status, patient experience, health 65 of 121
1404disparities and population health. The statewide advisory committee shall consider measures
1405applicable to primary care providers, specialists, hospitals, provider organizations, accountable
1406care organizations, oral health providers and other types of providers and measures applicable to
1407different patient populations.
1408 (5) Not later than January 1 in each even-numbered year, the statewide advisory
1409committee shall submit to the center its recommendations on the core measures and non-core
1410measures to be adopted, changed or updated by the center in the standard quality measure set,
1411along with a report in support of its recommendations.
1412 SECTION 68. Section 15 of said chapter 12C, as so appearing, is hereby amended by
1413striking out, in line 4, the word “injury” and inserting in place thereof the following word:- harm.
1414 SECTION 69. Said section 15 of said chapter 12C, as so appearing, is hereby further
1415amended by striking out the definition of “Board” and inserting in place thereof the following 3
1416definitions:-
1417 “Agency”, an agency of the executive branch of the commonwealth including, but not
1418limited to, a constitutional or other office, executive office, department, division, bureau, board,
1419commission or committee thereof, or any authority created by the general court to serve a public
1420purpose, having either statewide or local jurisdiction.
1421 “Board”, the patient safety and medical errors reduction board.
1422 “Healthcare-associated infection”, an infection that a patient acquires during the course of
1423receiving treatment for other conditions within a health care setting. 66 of 121
1424 SECTION 70. Said section 15 of said chapter 12C, as so appearing, is hereby further
1425amended by inserting after the definition of “Patient safety” the following definition:-
1426 “Patient safety information”, data and information related to patient safety, including
1427adverse events, incidents, medical errors or health care-associated infections, that is collected or
1428maintained by agencies.
1429 SECTION 71. Said section 15 of said chapter 12C, as so appearing, is hereby further
1430amended by striking out subsection (f) and inserting in place thereof the following 3
1431subsections:-
1432 (f) Notwithstanding any general or special law to the contrary, the Lehman center and
1433any agency, provider organization, department, division, commission, board, authority or other
1434public or quasi-public entity in the commonwealth that collects or maintains patient safety
1435information may transmit such information, including personal data as defined in section 1 of
1436chapter 66A, to each other, and shall transmit such information to the Lehman center upon
1437request from the Lehman center; provided, however, that transmission of such information shall
1438be governed by an agreement, which may be an interagency service agreement, between the
1439party transmitting the information and the Lehman center; provided further, that such agreement
1440shall provide for any safeguards necessary to protect the privacy and security of the information;
1441and provided further, that the transmission of such information shall be in compliance with
1442federal law.
1443 (g) The Lehman center may adopt rules and regulations necessary to carry out the
1444purpose of this section. The Lehman center may contract with any federal, state or municipal 67 of 121
1445entity or other public institution or with any private individual, partnership, firm, corporation,
1446association or other entity to manage its affairs or carry out the purpose of this section.
1447 (h) The Lehman center shall report annually to the joint committee on health care
1448financing regarding the progress made in improving patient safety and medical error reduction.
1449The Lehman center may seek federal and foundation support to supplement state resources to
1450carry out the Lehman center’s patient safety and medical error reduction goals.
1451 SECTION 72. Section 16 of said chapter 12C, as so appearing, is hereby amended by
1452inserting after the word “publish”, in line 1, the following words:- , for the most recently
1453concluded benchmark cycle, .
1454 SECTION 73. Said section 16 of said chapter 12C, as so appearing, is hereby further
1455amended by inserting after the word “submitted”, in line 2, the following words:- for that
1456benchmark cycle .
1457 SECTION 74. Said section 16 of said chapter 12C, as so appearing, is hereby further
1458amended by striking out, in line 7, the word “benchmark” and inserting in place thereof the
1459following words:- and affordability benchmarks.
1460 SECTION 75. Said section 16 of said chapter 12C, as so appearing, is hereby further
1461amended by striking out, in line 8, the words “section 9” and inserting in place thereof the
1462following words:- sections 9 and 9A.
1463 SECTION 76. Said section 16 of said chapter 12C, as so appearing, is hereby further
1464amended by striking out, in line 43, the words “and (12)” and inserting in place thereof the
1465following words:- (12) a standard set of measures of health care affordability in the 68 of 121
1466commonwealth, including family health care expenditures and an annual index of how such
1467health care costs compare to the health care affordability benchmark set under section 9A of
1468chapter 6D; and (13).
1469 SECTION 77. Said section 16 of said chapter 12C, as so appearing, is hereby further
1470amended by adding the following subsection:-
1471 (d) The center shall evaluate and report on individual private and public health care payer
1472data metrics submitted to the center pursuant to clauses (1) to (5), inclusive, of subsection (b) of
1473section 10 and data submitted to the division of insurance pursuant to section 21 of chapter
1474176O. The center shall include information on payer data in its annual report required under this
1475section; provided, however, that such information shall be reported on an industry-wide, payer-
1476specific basis and shall include, but not be limited to: (i) operating margins; (ii) total margins;
1477(iii) reserves in dollars and as a percentage of risk-based capital; (iv) enrollment and member
1478months; (v) total premiums and premiums on a per member per month basis; (vi) total medical
1479expenses and medical expenses on a per member per month basis; and (vii) total administrative
1480expenses and administrative expenses on a per member per month basis; and provided further,
1481that the center shall report this information by type of business, where possible.
1482 SECTION 78. Said chapter 12C of the General Laws is hereby amended by striking out
1483sections 17 and 18, as so appearing, and inserting in place thereof the following 2 sections:-
1484 Section 17. The attorney general may review and analyze any information submitted to
1485the center by a provider, provider organization, private equity firm, real estate investment trust,
1486management services organization, pharmaceutical manufacturing company, pharmacy benefit
1487manager or payer pursuant to sections 8, 9 and 10 of this chapter, and to the commission under 69 of 121
1488section 8 of chapter 6D. The attorney general may require that such entities produce documents,
1489answer interrogatories and provide testimony under oath related to health care costs and cost
1490trends, factors that contribute to cost growth within the commonwealth’s health care system and
1491the relationship between provider costs and payer premium rates. The attorney general shall keep
1492confidential all nonpublic information and documents obtained under this section and shall not
1493disclose the information or documents to any person without the consent of the entity that
1494produced the information or documents; provided, however, that the attorney general may
1495disclose such information or documents during (i) the annual hearing conducted under section 8
1496of chapter 6D, (ii) a rate hearing before the health insurance bureau, or (iii) in a case brought by
1497the attorney general, if the attorney general believes that such disclosure will promote the health
1498care cost containment goals of the commonwealth and that the disclosure would be in the public
1499interest after taking into account any privacy, trade secret or anti-competitive considerations. The
1500confidential information and documents shall not be public records and shall be exempt from
1501disclosure under clause Twenty-sixth of section 7 of chapter 4 or section 10 of chapter 66.
1502 Section 18. (a) The center shall perform ongoing analysis of data it receives under this
1503chapter to identify any health care entity whose: (1) contribution to health care spending levels
1504and growth, including but not limited to, spending levels and growth as measured by health-
1505status adjusted total medical expense or total medical expense, is considered excessive and who
1506threaten the ability of the state to meet the health care cost growth benchmark established by the
1507commission under section 9 of chapter 6D; provided further, that the center shall identify cohorts
1508for similar health care entities and establish differential standards for excessive growth rates
1509within the health care cost growth benchmark established by the commission under section 9 of
1510chapter 6D, based on factors which may include, but are not limited to, a health care entity’s 70 of 121
1511spending, pricing levels and payer mix; or (2) data is not submitted to the center in a proper,
1512timely or complete manner.
1513 (b) The center shall confidentially provide a list of the health care entities to the
1514commission such that the commission may pursue further action under section 10 of chapter 6D.
1515Confidential referrals under this section shall not preclude the center from using its authority to
1516assess penalties for noncompliance under section 11.
1517 SECTION 79. Section 10 of chapter 13 of the General Laws, as so appearing, is hereby
1518amended by striking out the last paragraph and inserting in place thereof the following
1519paragraph:-
1520 The board may: (i) adopt, amend and rescind such rules and regulations as it deems
1521necessary to carry out this chapter subject to the approval of the commissioner of public health;
1522(ii) make contracts and arrangements for the performance of administrative and similar services
1523required or appropriate in the performance of the duties of the board; and (iii) adopt and make
1524public rules of procedure and other regulations not inconsistent with other provisions of the
1525General Laws. The commissioner of public health shall appoint an executive director and a legal
1526counsel for the board.
1527 SECTION 80. Said chapter 13 is hereby further amended by striking out section 10A, as
1528so appearing, and inserting in place thereof the following section:-
1529 Section 10A. The commissioner of public health shall review and approve any rule or
1530regulation proposed by the board of registration in medicine pursuant to section 10. Such rule or
1531regulation shall be deemed disapproved unless approved within 60 days of submission to the
1532commissioner pursuant to said section 10. 71 of 121
1533 SECTION 81. Chapter 26 of the General Laws is hereby amended by striking out section
15347A, as so appearing, and inserting in place thereof the following section:-
1535 Section 7A. (a) As used in this section, the following words shall, unless the context
1536clearly requires otherwise, have the following meanings:-
1537 “Bureau”, health insurance bureau.
1538 “Deputy commissioner”, the deputy commissioner of the health insurance bureau.
1539 “Health benefit plan”, any individual, general, blanket or group policy of health, accident
1540and sickness insurance issued by an insurer licensed under chapter 175; an individual or group
1541hospital service plan issued by a non-profit hospital service corporation under chapter 176A; an
1542individual or group medical service plan issued by a nonprofit medical service corporation under
1543chapter 176B; an individual or group health maintenance contract issued by a health maintenance
1544organization under chapter 176G, and a dental service plan offered by a dental service
1545corporation under chapter 176E. Health benefit plans shall not include: (i) accident only, credit
1546only, limited scope vision if offered separately; (ii) hospital indemnity insurance policies that
1547provide a benefit to be paid to an insured or a dependent, including the spouse of an insured, on
1548the basis of a hospitalization of the insured or a dependent, that are sold as a supplement and not
1549as a substitute for a health benefit plan and that meet any requirements set by the commissioner
1550by regulation; (iii) disability income insurance; (iv) coverage issued as a supplement to liability
1551insurance; (v) specified disease insurance that is purchased as a supplement and not as a
1552substitute for a health plan and meets any requirements the commissioner by regulation may set;
1553(vi) insurance arising out of a workers' compensation law or similar law; (vii) automobile
1554medical payment insurance; (viii) insurance under which benefits are payable with or without 72 of 121
1555regard to fault and which is statutorily required to be contained in a liability insurance policy or
1556equivalent self-insurance; (ix) long-term care if offered separately; (x) coverage supplemental to
1557the coverage provided under 10 U.S.C. 55 if offered as a separate insurance policy; (xi) travel
1558insurance; or (xii) any policy subject to chapter 176K or any similar policies issued on a group
1559basis, Medicare Advantage plans or Medicare Prescription drug plans. A health plan issued,
1560renewed or delivered within or without the commonwealth to an individual who is enrolled in a
1561qualifying student health insurance program under section 18 of chapter 15A shall not be
1562considered a health plan for the purposes of this chapter and shall be governed by said chapter
156315A; provided, however, that travel insurance for the purpose of this chapter is insurance
1564coverage for personal risks incident to planned travel, including, but not limited to: (A)
1565interruption or cancellation of trip or event; (B) loss of baggage or personal effects; (C) damages
1566to accommodations or rental vehicles; or (D) sickness, accident, disability or death occurring
1567during travel, provided, however, that the health benefits are not offered on a stand-alone basis
1568and are incidental to other coverages; and provided further, that the term “travel insurance” shall
1569not include major medical plans, which provide comprehensive medical protection for travelers
1570with trips lasting 6 months or longer, including for example, those working overseas as ex-patriot
1571or military personnel being deployed.
1572 “Rate review”, any examination performed by the deputy commissioner of the aggregate
1573rates of payment pursuant to sections 5, 6 and 10 of chapter 176A; section 4 of chapter 176B;
1574section 16 of chapter 176G; section 6 of chapter 176J; and section 7 of chapter 176K.
1575 (b) There shall be within the division of insurance a health insurance bureau overseen by
1576a deputy commissioner, whose duties shall include, but not be limited to, rate review of premium
1577rates for health benefit plans offered, issued or renewed in the commonwealth, administration of 73 of 121
1578the division's statutory and regulatory authority for oversight of the small group and individual
1579health insurance market, oversight of affordable health plans, including coverage for young
1580adults, as well as the dissemination of appropriate information to consumers about health
1581insurance coverage and access to affordable products. The deputy commissioner shall: (i) protect
1582the interests of consumers of health insurance; (ii) encourage fair treatment of health care
1583providers by health insurers; (iii) enhance equity, access, quality and affordability in the health
1584care system; (iv) guard the solvency of health insurers; (v) work cooperatively with the health
1585policy commission and the center for health information and analysis to monitor health care
1586spending; and (vi) consider affordability of health insurance products during rate review.
1587 (c) The deputy commissioner shall develop affordability standards to consider during rate
1588review; provided, however, that the deputy commissioner’s review of a carrier’s rates shall
1589adhere to principles of solvency and actuarial soundness. Such standards shall consider factors
1590including, but not limited to: (i) affordability for consumers, including the totality of costs paid
1591by consumers of health insurance for covered benefits including, but not limited to, the enrollee’s
1592share of premium, out-of-pocket maximum amounts, deductibles, copays, coinsurance and other
1593forms of cost sharing for health insurance coverage; (ii) affordability for purchasers, including
1594the totality of costs paid by purchasers of health insurance including, but not limited to, premium
1595costs, actuarial value of coverage for covered benefits and the value delivered on health care
1596spending in terms of improved quality and cost efficiency; and (iii) the impact of proposed rates
1597on the commonwealth’s performance against the health care cost growth benchmark established
1598in section 9 of chapter 6D and the affordability benchmark established in section 9A of said
1599chapter 6D. 74 of 121
1600 (d) The deputy commissioner shall review data and documents submitted to the division,
1601including, but not limited to, any materials submitted as part of rate reviews, to examine the
1602causes of premium rate increases and excessive provider price variation.
1603 (e) The commissioner shall appoint, at a minimum, the following employees to the
1604bureau: a deputy commissioner, a general counsel, a chief health economist, a chief actuary, a
1605chief research analyst and a chief examiner. The appointed employees shall devote their full time
1606to the duties of their offices, shall be exempt from chapters 30 and 31 and shall serve at the
1607pleasure of the commissioner. The commissioner may appoint and remove additional employees,
1608including, but not limited to, a first deputy, economists, analysts, examiners, assistant actuaries,
1609inspectors, clerks and other assistants as the work of the division may require. Such additional
1610employees shall perform such duties as the commissioner may prescribe.
1611 (f) The commissioner shall make and collect an assessment against the carriers licensed
1612under chapters 175, 176A, 176B, 176E, 176F and 176G to pay for the expenses of the bureau.
1613The assessment shall be at a rate sufficient to produce $1,000,000 annually. In addition to that
1614amount, the assessment shall include an amount to be credited to the General Fund which shall
1615be equal to the total amount of funds estimated by the secretary of administration and finance to
1616be expended from the General Fund for indirect and fringe benefit costs attributable to the
1617personnel costs of the bureau. The assessment shall be allocated on a fair and reasonable basis
1618among all carriers licensed under said chapters. The funds produced by the assessments shall be
1619expended by the bureau, in addition to any other funds which may be appropriated, to assist in
1620defraying the general operating expenses of the division and may be used to compensate
1621consultants retained by the bureau. A carrier licensed under said chapters shall pay the amount 75 of 121
1622assessed against it within 30 days after the date of the notice of assessment from the
1623commissioner.
1624 (g) Notwithstanding any general or special law to the contrary, carriers offering health
1625benefit plans, including carriers licensed under chapter 175, 176A, 176B or 176G, shall annually
1626file a summary of negotiated rate increases for their largest providers, by provider group to the
1627bureau. The deputy commissioner shall confidentially provide such information to the health
1628policy commission.
1629 Rates of reimbursement or rate increases submitted for review by the bureau under this
1630section shall be deemed confidential and exempt from the definition of public records in clause
1631Twenty-sixth of section 7 of chapter 4 or section 10 of chapter 66. The deputy commissioner
1632shall adopt regulations to carry out this section.
1633 SECTION 82. Subsection (b) of section 7H½ of chapter 29 of the General Laws, as so
1634appearing, is hereby amended by striking out the first sentence and inserting in place thereof the
1635following sentence:- Annually, not later than January 15, the secretary of administration and
1636finance shall meet with the house and senate committees on ways and means and shall jointly
1637develop a growth rate of potential gross state product for the calendar year that will begin 2 years
1638following the calendar year in which the January 15 date occurs, which shall be agreed to by the
1639secretary and the committees.
1640 SECTION 83. Section 9-609 of chapter 106 of the General Laws, as so appearing, is
1641hereby amended by adding the following subsection:-
1642 (d) Notwithstanding subsection (a), in the case of a debtor that is a hospital licensed by
1643the department of public health under section 51 of chapter 111 and collateral that is a medical 76 of 121
1644device, a secured party shall send notice to the debtor and the department of public health not
1645less than 90 days prior to taking possession of the collateral, rendering equipment unusable or
1646disposing of the collateral on the debtor’s premises pursuant to subsection (a). For the purposes
1647of this subsection, “medical device” shall have the same meaning as that term is defined in
1648section 1 of chapter 111N.
1649 SECTION 84. Section 1 of chapter 111 of the General Laws, as so appearing, is hereby
1650amended by inserting after the definition “Nuclear reactor” the following definition:-
1651 “Party of record”, during the pendency of an application for a determination of need, an
1652applicant for a determination of need, the attorney general, the center for health information and
1653analysis, the health policy commission, any government agency with relevant oversight or
1654licensure authority over the proposed project or components therein or any 10 taxpayers of the
1655commonwealth organized as a group.
1656 SECTION 85. Section 25A of said chapter 111, as so appearing, is hereby amended by
1657striking out the first 5 paragraphs.
1658 SECTION 86. Section 25C of said chapter 111, as so appearing, is hereby amended by
1659striking out subsections (g) to (j), inclusive, and inserting in place thereof the following 4
1660subsections:-
1661 (g) The department, in making any determination of need, shall: (i) assess both the
1662applicant and the proposed project; (ii) be guided by the state health plan and focused health
1663assessments pursuant to section 22 of chapter 6D and the health care resources inventory
1664pursuant to section 9 of chapter 12C; (iii) encourage appropriate allocation of private and public
1665health care resources and the development of alternative or substitute methods of delivering 77 of 121
1666health care services so that adequate health care services will be made reasonably available to
1667every person within the commonwealth at the lowest reasonable aggregate cost; (iv) be guided
1668by the commonwealth’s cost containment and affordability goals; (v) assess the impacts on the
1669applicant’s patients and on other residents of the commonwealth, including, but not limited to,
1670considerations of health equity and the workforce of surrounding health care providers; and (vi)
1671take into account any comments and relevant data from the center for health information and
1672analysis, the health policy commission, including, but not limited to, any cost and market impact
1673review report pursuant to subsection (f) of section 13 of chapter 6D, and any other state agency
1674or entity. The department may impose reasonable terms and conditions on the approval of a
1675determination of need as the department determines are necessary to achieve the purposes and
1676intent of this section, including, but not limited to, conditions intended to address health care
1677disparities and better align a project with community needs. The department may recognize the
1678special needs and circumstances of projects that: (i) are essential to the conduct of research in
1679basic biomedical or health care delivery areas or to the training of health care personnel; (ii) are
1680unlikely to result in any increase in the clinical bed capacity or outpatient load capacity of the
1681facility; and (iii) are unlikely to cause an increase in the total patient care charges of the facility
1682to the public for health care services, supplies and accommodations, as such charges shall be
1683defined from time to time in accordance with section 5 of chapter 409 of the acts of 1976. The
1684department may also recognize the special needs and circumstances of projects that may address
1685a lack of supply for a specific region, population or service line that has been identified in the
1686state health plan or focused assessments pursuant to section 22 of chapter 6D.
1687 (h) Applications for such determination shall be filed with the department, together with
1688other forms and information as shall be prescribed by, or acceptable to, the department. No 78 of 121
1689provider or provider organization may apply for a notice of determination of need until a
1690material change notice, if required, has been submitted to the health policy commission under
1691section 13 of chapter 6D. A duplicate copy of any application together with supporting
1692documentation for such application, shall be a public record and kept on file in the department.
1693The department may require a public hearing on any application at its discretion or at the request
1694of the attorney general. The attorney general may intervene in any hearing under this section. A
1695reasonable fee, established by the department, shall be paid upon the filing of such application;
1696provided, however, that such fee shall not exceed 0.2 per cent of the capital expenditures, if any,
1697proposed by the applicant. The department may adapt the information required and fees required
1698for applications if it determines a project or class of projects may address a lack of supply for a
1699specific region, population or service line that has been identified in the state health plan or
1700focused assessments pursuant to section 22 of chapter 6D. The department may also require an
1701independent cost analysis be conducted, at the expense of the applicant, by an entity selected and
1702overseen by the department, including, but not limited to, another state agency, to demonstrate
1703that the application is consistent with the commonwealth's efforts to meet the health care cost
1704containment goals established by the commission. Such entity may request, and the applicant
1705may not unreasonably withhold, confidential data and documents necessary to conduct an
1706independent cost analysis pursuant to such section; provided, however, that any confidential data
1707and documents so requested shall be provided to the entity conducting the independent cost
1708analysis, the department, the health policy commission and the attorney general, but shall not be
1709disclosed to any other person without the consent of the applicant, except in summary form, or
1710when the department, health policy commission or attorney general determines that such
1711disclosure should be made in the public interest after taking into account any privacy, trade 79 of 121
1712secret or anticompetitive considerations; and provided further, that any confidential data and
1713documents so provided shall not be public records and shall be exempt from disclosure under
1714clause Twenty-sixth of section 7 of chapter 4 or section 10 of chapter 66.
1715 (i) Except in the case of an emergency situation determined by the department as
1716requiring immediate action to prevent further damage to the public health or to a health care
1717facility, the department shall not act upon an application for such determination unless: (i) the
1718application has been on file with the department for not less than 30 days; (ii) the center for
1719health information and analysis, the health policy commission, the office of the attorney general,
1720the state and appropriate regional comprehensive health planning agencies and, in the case of
1721long-term care facilities only, the department of elder affairs, or in the case of any facility
1722providing inpatient services for individuals with intellectual or developmentally disabilities, the
1723departments of mental health or developmental services, respectively, have been provided copies
1724of such application and supporting documents and given reasonable opportunity to supply
1725required information and comment on such application; and (iii) a public hearing has been held
1726on such application when requested by the applicant, the state or appropriate regional
1727comprehensive health planning agency, any 10 taxpayers of the commonwealth or any other
1728party of record. If, in any filing period, an individual application is filed that would implicitly
1729decide any other application filed during such period, the department shall not act only upon an
1730individual application.
1731 (j) The department shall so approve or disapprove, in whole or in part, each such
1732application for a determination of need not more than 6 months after filing with the department;
1733provided, however, that the department may, on not more than 1 occasion, delay the action for up
1734to 2 months after the applicant has provided information which the department has reasonably 80 of 121
1735requested during the 8-month period; provided further, that: (i) the period for review of an
1736application for which an independent cost analysis is conducted pursuant to subsection (h) shall
1737be stayed until a completed independent cost analysis is received and accepted by the
1738department: (ii) the period of review of an application for which the commission conducts a cost
1739and market impact review shall be stayed until a final cost and market impact review has been
1740issued: and (iii) the period of review of an application for which the applicant is subject to a
1741performance improvement plan pursuant to section 10 of chapter 6D shall be stayed until the
1742commission determines that the applicant is implementing or has implemented said performance
1743improvement plan in good faith; and provided further, that the commission may rescind its
1744determination that the applicant is implementing a performance improvement plan in good faith
1745at any time prior to successful completion of the performance improvement plan. Applications
1746remanded to the department by the health facilities appeals board under section 25E shall be
1747acted upon by the department within the same time limits provided in this section for the
1748department to approve or disapprove applications for a determination of need. If an application
1749has not been acted upon by the department within such time limits, the applicant may, within a
1750reasonable period of time, bring an action in the nature of mandamus in the superior court to
1751require the department to act upon the application.
1752 SECTION 87. Said section 25C of said chapter 111, as so appearing, is hereby further
1753amended by adding the following 2 subsections:-
1754 (o) Notwithstanding sections (a) through (d), the department may create a process under
1755which persons or entities proposing a project that would normally require a determination of
1756need may apply for a waiver of such requirement. Such waiver shall be granted only in cases in
1757which the person or entity demonstrates the project will address a lack of supply for a specific 81 of 121
1758region, population or service line that has been identified in the state health plan or focused
1759assessments pursuant to section 22 of chapter 6D. The department may require a waiver request
1760be accompanied by forms and information as shall be prescribed by, or acceptable to, the
1761department. A duplicate copy of any waiver request together with supporting documentation for
1762such application shall be a public record and kept on file in the department.
1763 (p) A party of record may review an application for determination of need and provide
1764written comment or specific recommendations for consideration by the department. Whenever a
1765party of record submits written materials concerning an application for determination of need,
1766the department shall provide copies of such materials to all other parties of record.
1767 SECTION 88. Section 25F of said chapter 111, as so appearing, is hereby amended by
1768inserting after the word “care”, in line 7, the following word:- financing.
1769 SECTION 89. Paragraph (4) of subsection (d) of section 51G of said chapter 111, as so
1770appearing, is hereby further amended by inserting, after the third sentence, the following
1771sentence:-
1772 The department may seek an analysis of the impact of the closure from the health policy
1773commission.
1774 SECTION 90. Said subsection (d) of said section 51G of said chapter 111, as so
1775appearing, is hereby further amended by adding the following 2 paragraphs:-
1776 (7) No original license shall be granted or renewed, to establish or maintain an acute-care
1777hospital unless: (i) all documents related to any lease, master lease, sublease, license or any other
1778agreement for the use, occupancy or utilization of the premises occupied by the acute-care 82 of 121
1779hospital are disclosed to the department upon application for licensure; and (ii) the department
1780has reviewed such documentation and determined the applicant is suitable for licensure.
1781 (8) No original license shall be granted, nor renewed, to establish or maintain an acute-
1782care hospital, as defined in section 25B, unless the applicant is in compliance with the reporting
1783requirements established in sections 8 to 10, inclusive, of chapter 12C.
1784 SECTION 91. Section 51H of said chapter 111, as so appearing, is hereby amended by
1785striking out the definition of “Facility” and inserting in place thereof the following definition:
1786 “Facility”, a hospital, institution for the care of unwed mothers, clinic providing
1787ambulatory surgery as defined in section 25B, limited-service clinic licensed pursuant to section
178851J, office-based surgical center licensed pursuant to section 51M or urgent care center licensed
1789pursuant to section 51N.
1790 SECTION 92. Said section 51H of said chapter 111, as so appearing, is hereby further
1791amended by inserting after the definition of “Healthcare-associated infection” the following
1792definition:-
1793 “Operational impairment event”, any action, or notice of impending action, including a
1794notice of financial delinquency, concerning the repossession of medical equipment or supplies
1795necessary for the provision of patient care.
1796 SECTION 93. Subsection (b) of said section 51H of said chapter 111, as so appearing, is
1797hereby amended by adding the following paragraph:-
1798 An operational impairment event shall be reported by a facility to the department not later
1799than 1 calendar day after it occurs. Notwithstanding any general or special law to the contrary, no 83 of 121
1800contract between a facility and a lessor of medical equipment shall authorize the repossession of
1801medical equipment or supplies unless the lessor provides a notice of financial delinquency to the
1802department not less than 90 days prior to repossession of any medical equipment or supplies
1803necessary for the provision of patient care. Any provision of any contract or other document
1804between a lessor of medical equipment and a facility which does not comply with this paragraph
1805shall be void.
1806 SECTION 94. Said chapter 111 is hereby further amended by inserting after section 51L
1807the following 2 sections:-
1808 Section 51M. (a) As used in this section, the following words shall, unless the context
1809clearly requires otherwise, have the following meanings:-
1810 “Deep sedation”, a drug-induced depression of consciousness during which: (i) the
1811patient cannot be easily awakened but responds purposefully following repeated painful
1812stimulation; (ii) the patient’s ability to maintain independent ventilatory function may be
1813impaired; (iii) the patient may require assistance in maintaining a patent airway and spontaneous
1814ventilation may be inadequate; and (iv) the patient’s cardiovascular function is usually
1815maintained without assistance.
1816 “General anesthesia”, a drug-induced depression of consciousness during which: (i) the
1817patient is not able to be awakened, even by painful stimulation; (ii) the patient’s ability to
1818maintain independent ventilatory function is often impaired; (iii) the patient, in many cases, often
1819requires assistance in maintaining a patent airway and positive pressure ventilation may be
1820required because of depressed spontaneous ventilation or drug-induced depression of
1821neuromuscular function; and (iv) the patient’s cardiovascular function may be impaired. 84 of 121
1822 “Minimal sedation”, a drug-induced state during which: (i) patients respond normally to
1823verbal commands; (ii) cognitive function and coordination may be impaired; and (iii) ventilatory
1824and cardiovascular functions are unaffected.
1825 “Minor procedures”, (i) procedures that can be performed safely with a minimum of
1826discomfort where the likelihood of complications requiring hospitalization is minimal; (ii)
1827procedures performed with local or topical anesthesia; or (iii) liposuction with removal of less
1828than 500cc of fat under un-supplemented local anesthesia.
1829 “Moderate sedation”, a drug-induced depression of consciousness during which: (i) the
1830patient responds purposefully to verbal commands, either alone or accompanied by light tactile
1831stimulation; (ii) no interventions are required to maintain a patent airway; (iii) spontaneous
1832ventilation is adequate; and (iv) the patient’s cardiovascular function is usually maintained
1833without assistance.
1834 “Office-based surgical center”, an office, group of offices, a facility or any portion
1835thereof owned, leased or operated by 1 or more practitioners engaged in a solo or group practice,
1836however organized, whether conducted for profit or not for profit, which is advertised,
1837announced, established or maintained for the purpose of providing office-based surgical services;
1838provided, however, that “office-based surgical center” shall not include: (i) a hospital licensed
1839under section 51 or by the federal government; (ii) an ambulatory surgical center as defined
1840pursuant to section 25B and licensed under said section 51; or (iii) a surgical center performing
1841services in accordance with section 12M of chapter 112.
1842 “Office-based surgical services”, an ambulatory surgical or other invasive procedure
1843requiring: (i) general anesthesia; (ii) moderate sedation; or (iii) deep sedation and any liposuction 85 of 121
1844procedure, excluding minor procedures and procedures requiring minimal sedation, where such
1845surgical or other invasive procedure or liposuction is performed by a practitioner at an office-
1846based surgical center.
1847 (b) The department shall establish rules, regulations and practice standards for the
1848licensing of office-based surgical centers. In determining rules, regulations and practice
1849standards necessary for licensure as an office-based surgical center, the department may, at its
1850discretion, determine which regulations applicable to an ambulatory surgical center, as defined in
1851section 25B, shall apply to an office-based surgical center. The department shall consult with the
1852board of registration in medicine and experts in the field of office-based surgical care, including
1853not less than 3 physicians in such field in the commonwealth prior to promulgating regulations or
1854establishing rules or practice standards pursuant to this section.
1855 (c) The department shall issue for a term of 2 years and renew for a like term, a license to
1856maintain an office-based surgical center to an entity or organization that demonstrates to the
1857department that it is responsible and suitable to maintain such a center. An office-based surgical
1858center license shall list the specific locations on the premises where surgical services are
1859provided. In the case of the transfer of ownership of an office-based surgical center, the
1860application of the new owner for a license, when filed with the department on the date of transfer
1861of ownership, shall have the effect of a license for a period of 3 months.
1862 (d) An office-based surgical center license shall be subject to suspension, revocation or
1863refusal to issue or to renew for cause if, in its reasonable discretion, the department determines
1864that the issuance of such license would be inconsistent with the best interests of the public health,
1865welfare or safety. Nothing in this subsection shall limit the authority of the department to require 86 of 121
1866a fee, impose a fine, conduct surveys and investigations or to suspend, revoke or refuse to renew
1867a license issued pursuant to subsection (c).
1868 (e) Initial application and renewal fees for the license shall be established pursuant to
1869section 3B of chapter 7.
1870 (f) The department may impose a fine of up to $10,000 on a person or entity that
1871advertises, announces, establishes or maintains an office-based surgical center without a license
1872granted by the department. The department may impose a fine of not more than $10,000 on a
1873licensed office-based surgical center for violations of this section or any rule or regulation
1874promulgated pursuant to this section. Each day during which a violation continues shall
1875constitute a separate offense. The department may conduct surveys and investigations to enforce
1876compliance with this section.
1877 (g) Notwithstanding any general or special law or rule to the contrary, the department
1878may issue a 1-time provisional license to an applicant for an office-based surgical center licensed
1879pursuant to this section if such office-based surgical center holds: (i) a current accreditation from
1880the Accreditation Association for Ambulatory Health Care, American Association for
1881Accreditation of Ambulatory Surgery Facilities, Inc., or the Joint Commission On Accreditation
1882of Healthcare Organizations; or (ii) a current certification for participation in either Medicare or
1883Medicaid. The department may approve such a provisional application upon a finding of
1884responsibility and suitability and that the office-based surgical center meets all other licensure
1885requirements as determined by the department. Such provisional license issued to an office-based
1886surgical center shall not be extended or renewed. 87 of 121
1887 Section 51N. (a) As used in this section, the following words shall have the following
1888meanings unless the context clearly requires otherwise:-
1889 “Emergency services”, as defined in section 1 of chapter 6D.
1890 “Urgent care center”, a clinic owned or operated by an entity that is not corporately
1891affiliated with a hospital licensed under section 51, however organized, whether conducted for
1892profit or not for profit, that is advertised, announced, established or maintained for the purpose of
1893providing urgent care services in an office or a group of offices, or any portion thereof, or an
1894entity that is advertised, announced, established or maintained under a name that includes the
1895words “urgent care” or that suggests that urgent care services are provided therein and is not
1896corporately affiliated with a hospital licensed under 51; provided, however, that an urgent care
1897center shall not include: (i) a hospital licensed under said section 51 or operated by the federal
1898government or by the commonwealth; (ii) a clinic licensed under said section 51; (iii) a limited
1899service clinic licensed under section 51J; or (iv) a community health center receiving a grant
1900under 42 U.S.C. 254b.
1901 “Urgent care services”, a model of episodic care for the diagnosis, treatment,
1902management or monitoring of acute and chronic disease or injury that is: (i) for the treatment of
1903illness or injury that is immediate in nature but does not require emergency services; (ii)
1904provided on a walk-in basis without a prior appointment; (iii) available to the general public
1905during times of the day, weekends or holidays when primary care provider offices are not
1906customarily open; and (iv) not intended as the patient's primary care provider.
1907 (b) The department shall establish rules, regulations and practice standards for the
1908licensing of urgent care centers. In determining regulations and practice standards necessary for 88 of 121
1909licensure as an urgent care center, the department may, at its discretion, determine which
1910regulations applicable to a clinic licensed under section 51, shall apply to an urgent care center.
1911 (c) The department shall issue for a term of 2 years and renew for a like term, a license to
1912maintain an urgent care center to an entity or organization that demonstrates to the department
1913that it is responsible and suitable to maintain such an urgent care center. In the case of the
1914transfer of ownership of an urgent care center, the application of the new owner for a license,
1915when filed with the department on the date of transfer of ownership, shall have the effect of a
1916license for a period of 3 months.
1917 (d) An urgent care center license shall be subject to suspension, revocation or refusal to
1918issue or to renew for cause if, in its reasonable discretion, the department determines that the
1919issuance of such license would be inconsistent with or opposed to the best interests of the public
1920health, welfare or safety. Nothing in this subsection shall limit the authority of the department to
1921require a fee, impose a fine, conduct surveys and investigations or to suspend, revoke or refuse to
1922renew a license issued pursuant to subsection (c).
1923 (e) Initial application and renewal fees for the license shall be established pursuant to
1924section 3B of chapter 7.
1925 (f) The department may impose a fine of up to $10,000 on a person or entity that
1926advertises, announces, establishes or maintains an urgent care center without a license granted by
1927the department. The department may impose a fine of not more than $10,000 on a licensed
1928urgent care center for violations of this section or any rule or regulation promulgated pursuant to
1929this section. Each day during which a violation continues shall constitute a separate offense. The
1930department may conduct surveys and investigations to enforce compliance with this section. 89 of 121
1931 (g) Notwithstanding any general or special law or rule to the contrary, the department
1932may issue a 1-time provisional license to an applicant for an urgent care center if such urgent
1933care center holds: (i) a current accreditation from the Accreditation Association for Ambulatory
1934Health Care, Urgent Care Association of America or the Joint Commission On Accreditation of
1935Healthcare Organizations; or (ii) a current certification for participation in either Medicare or
1936Medicaid. The department may approve such provisional application upon a finding of
1937responsibility and suitability and that the urgent care center meets all other licensure
1938requirements as determined by the department. Such provisional license issued to an urgent care
1939center shall not be extended or renewed.
1940 SECTION 95. Said section 218 of said chapter 111, as so appearing, is hereby further
1941amended by striking out, in line 28, the words “Maintenance Organizations” and inserting in
1942place thereof the following word:- Plans.
1943 SECTION 96. Said chapter 111, as so appearing, is hereby further amended by inserting
1944after section 244 the following section:-
1945 Section 245. (a) Pursuant to section 23 of chapter 6D, a private equity firm shall deposit,
1946upon submission of a notice of material change pursuant to section 13 of chapter 6D, a bond with
1947the department of public health.
1948 (b) Until such bond has been deposited, the department of public health shall not issue a
1949license to such provider or provider organization under this chapter, the department of mental
1950health shall not issue a license to such provider or provider organization under chapter 19, and
1951any determination of need application submitted under sections 25B to 25G, inclusive, of said
1952chapter 111 or material change notice submitted under section 13 of chapter 6D shall be deemed 90 of 121
1953incomplete. Notwithstanding any general or special law to the contrary, if the bond has not been
1954deposited, but the department of public health would otherwise be eligible to collect the bond,
1955the department shall be permitted to collect from the private equity firm the amount it would
1956have been able to collect had the bond been deposited. (c) The health policy commission
1957shall determine the amount of the bond, which shall equal 1 year of the provider or provider
1958organization’s average or estimated operating expenses, plus the estimated cost of hiring an
1959independent supervisor and reasonable staff to supervise and facilitate collecting and spending
1960the bond. The private equity firm shall maintain the bond for as long as it has a financial interest
1961in the provider or provider organization, and for 7 years thereafter.
1962 (d) The department of public health may collect the bond if the health policy commission
1963provides the department of public health with notification pursuant to subsection (c) of section
196423 of chapter 6D, or if the provider or provider organization in which the private equity firm has
1965or had a financial interest declares bankruptcy. The department of public health, in consultation
1966with the health policy commission and the center for health information and analysis, shall use
1967the bond proceeds to support the continued provision of health services to patients served by the
1968provider or provider organization. Prior to spending the bond, the department of public health
1969shall seek input from the public, including, but not limited to, providers, provider organizations
1970and patients in the affected region, regarding how to spend the bond. The department of public
1971health may, in consultation with the health policy commission and center for health information
1972and analysis, select an independent supervisor and reasonable staff to supervise and facilitate
1973collecting and spending the bond. 91 of 121
1974 SECTION 97. Section 7 of chapter 111D of the General Laws, as so appearing, is hereby
1975amended by striking out, in line 51, the word “three” and inserting in place thereof the following
1976figure:- “5”.
1977 SECTION 98. Section 1 of chapter 112 of the General Laws, as so appearing, is hereby
1978amended by inserting after the third paragraph the following paragraph:-
1979 The commissioner of occupational licensure and the commissioner of public health shall
1980by regulation define the words “good moral character”, establish a standardized assessment of
1981“good moral character” for applicants for certification or licensure. Each of the boards of
1982registration and examination under supervision of the commissioner of occupational licensure
1983and the commissioner of public health shall apply said standard definition and assessment of
1984“good moral character” for applicants of certification or licensure. The commissioners shall hold
1985at least 1 public hearing seeking input on the standard definition and assessment of “good moral
1986character” for applicants of certification or licensure. In developing the standard definition and
1987assessment of “good moral character”, the commissioners shall consider factors including, but
1988not limited to: (i) the nature and gravity of any conduct that would cause concerns about an
1989applicant’s moral character, including whether the conduct demonstrates a disregard for the
1990welfare, safety or rights of another or disregard for honesty, integrity or trustworthiness; (ii) the
1991nature of the job; (iii) the length of time that has passed since the conduct; (iv) the circumstances
1992surrounding the conduct, including the age of the offender and contributing social conditions and
1993biases; (v) evidence of rehabilitation, including subsequent work history and character
1994references; and (vi) racial, ethnic and other inequities in the criminal justice system. 92 of 121
1995 SECTION 99. The sixth paragraph of section 2 of said chapter 112, as so appearing, is
1996hereby amended by striking out the last sentence and inserting in place thereof the following
1997sentence:- The renewal application shall be accompanied by a fee determined under the
1998aforementioned provision and shall include the physician’s name, license number, home address,
1999office address, specialties, the principal setting of their practice and whether they are an active or
2000inactive practitioner.
2001 SECTION 100. Said chapter 112 is hereby further amended by inserting after section 4
2002the following 2 sections:-
2003 Section 4A. (a) For the purposes of this section and section 4B, the following words shall
2004have the following meanings unless the context clearly requires otherwise:
2005 “Clinician without independent practice authority”, a registered practicing clinician who
2006is not a physician, psychologist, licensed independent clinical social worker or nurse practitioner,
2007psychiatric nurse mental health clinical specialist or nurse anesthetist who has independent
2008practice authority pursuant to sections 80E, 80H and 80J.
2009 “Health care practice”, a business, regardless of form, through which a registered
2010practicing clinician offers health services; provided, however, that “health care practice” shall
2011not include any entity that holds a license issued by the department of public health pursuant to
2012sections 51, 51M, 51N or 52 of chapter 111.
2013 “Licensed independent clinical social worker,” a licensed independent clinical social
2014worker who is licensed to practice in the commonwealth pursuant to sections 130 to 137,
2015inclusive. 93 of 121
2016 “Management services organization”, a business that provides management or
2017administrative services to a provider or provider organization for compensation.
2018 “Non-profit hospital health system”, a nonprofit entity that directly or indirectly owns or
2019controls at least 1 nonprofit hospital licensed by the department of public health pursuant to
2020chapter 111.
2021 “Nurse anesthetist”, an advanced practice registered nurse who registered to practice
2022advanced nursing practice in the commonwealth pursuant to sections 74, 80B and 80H.
2023 “Nurse-midwife”, a nurse-midwife who is registered to practice nurse-midwifery in the
2024commonwealth pursuant to sections 74, 80B, 80C and 80G.
2025 “Nurse practitioner”, an advanced practice registered nurse who is registered to practice
2026advanced nursing practice in the commonwealth pursuant to sections 74, 80B and 80E.
2027 “Physician”, a doctor of medicine or doctor of osteopathy who is registered to practice
2028medicine in the commonwealth pursuant to section 2.
2029 “Physician assistant”, a physician assistant who is registered to practice in the
2030commonwealth pursuant to sections 9F and 9I.
2031 “Psychiatric nurse mental health clinical specialist”, an advanced practice registered
2032nurse who is registered to practice advanced nursing practice in the commonwealth pursuant to
2033sections 74, 80B, 80E and 80J.
2034 “Psychologist”, a psychologist licensed to practice psychology in the commonwealth
2035pursuant to sections 118 to 129B, inclusive. 94 of 121
2036 “Registered practicing clinician”, a physician, physician assistant, nurse practitioner,
2037psychiatric nurse mental health clinical specialist, nurse anesthetist, nurse-midwife, psychologist
2038or licensed independent clinical social worker.
2039 (b) No person or entity shall own a health care practice or employ registered practicing
2040clinicians except as specified in this section.
2041 (c)(1) A majority share of a health care practice shall not be owned, alone or in
2042combination, by any person or entity other than: (i) a nonprofit hospital health system; (ii) a
2043hospital that holds a license issued by the department of public health under chapter 111; or (iii)
2044a registered practicing clinician who: (A) holds a license and, when applicable, a certificate of
2045registration, that is issued by the applicable board of registration, neither of which have been
2046suspended or revoked; and (B) is substantially engaged in delivering health care to patients in the
2047commonwealth through the practice or managing of the health care practice. A violation of this
2048section shall constitute the unauthorized practice of medicine in violation of section 6. Nothing
2049in this section shall permit a nurse-midwife to practice beyond the scope established pursuant to
2050section 80G.
2051 (2) It shall constitute the unauthorized practice of medicine in violation of section 6 for
2052any person or entity other than a health care facility or entity that holds a license issued by the
2053department of public health pursuant to sections 51, 51M, 51N or 52 of chapter 111 or a health
2054care practice to employ registered practicing clinicians.
2055 (d) Health care facilities or entities that hold a license issued by the department of public
2056health pursuant to sections 51, 51M, 51N or 52 of chapter 111, health care practices and
2057nonprofit hospital health systems shall not directly or indirectly interfere with, control or 95 of 121
2058otherwise direct the professional judgment or clinical decisions of: (i) registered practicing
2059clinicians who receive compensation from the health care facility or entity or health care practice
2060as employees or independent contractors; (ii) a health care practice fully or partially owned or
2061controlled by a hospital that holds a license issued by the department of public health pursuant to
2062chapter 111 or nonprofit hospital health system; or (iii) said health care practice’s employees.
2063Conduct prohibited under this subsection shall include, but not be limited to, controlling, either
2064directly or indirectly, through discipline, punishment, threats, adverse employment actions,
2065coercion, retaliation or excessive pressure: (i) the amount of time spent with patients, including
2066the time permitted to triage patients in the emergency department or evaluate admitted patients;
2067(ii) the time period within which a patient must be discharged; (iii) decisions involving the
2068patient’s clinical status, including, but not limited to, whether the patient should be kept in
2069observation status, whether the patient should receive palliative care and where the patient
2070should be placed upon discharge; (iv) the diagnosis, diagnostic terminology or codes that are
2071entered into the medical record; or (v) any other conduct the department of public health
2072determines by regulation would interfere with, control or otherwise direct the professional
2073judgement or clinical decisions of clinicians with independent practice authority; provided,
2074however, that the department may establish exceptions to subsections (i) to (v), inclusive, for the
2075appropriate clinical supervision of clinicians without independent practice authority. Such health
2076care facilities or entities, nonprofit hospital health systems or health care practices fully or
2077partially owned by a hospital or nonprofit hospital health system shall not limit the range of
2078clinical orders available to registered practicing clinicians either directly or by configuring the
2079medical record to prohibit or significantly limit the clinical order options available.
2080Nondisclosure or non-disparagement agreements regarding subsections (i) to (v), inclusive, to 96 of 121
2081which health care practices or registered practicing clinicians are a party shall be considered void
2082and unenforceable. Any policy or contract that has the effect of violating this subsection shall be
2083void and unenforceable and shall be considered the unauthorized practice of medicine in
2084violation of section 6. If a court of competent jurisdiction finds a policy, contract or contract
2085provision void and unenforceable pursuant to this subsection, the court shall award the plaintiff
2086reasonable attorney’s fees and costs. Nothing in this section shall limit the ability of any person
2087to bring any action relating to defamation, disclosure of confidential or proprietary information
2088or trade secrets or similar torts.
2089 (e) Health care practices shall provide written certification that the health care practice
2090meets the requirements in this section to the department of public health at the time of formation
2091and on a biennial basis thereafter. Health care practices shall, at the time that such registered
2092practicing clinicians are hired or affiliated with the practice and within 30 days of providing
2093certification to the department of public health pursuant to this section, provide a copy of the
2094most recent certification to all registered practicing clinicians who: (i) engage in providing health
2095services at the health care practice; and (ii) do not hold any ownership interest in the health care
2096practice.
2097 (f) Health care practices shall file with the department of public health a registration
2098application containing such information as the department may reasonably require, including, but
2099not limited to: (i) the identity of the applicant and of the registered practicing clinicians that
2100constitute the practice; (ii) any management services organization under contract with the health
2101care practice; (iii) a certified copy of the health care practice’s certificate of organization, if any,
2102as filed with the secretary of the commonwealth, or any applicable partnership agreement; (iv)
2103the address of the health care practice; (v) the services provided by the health care practice; and 97 of 121
2104(vi) any information the department, in consultation with the health policy commission and the
2105center for health information and analysis, deems relevant for the state health plan and focused
2106assessments pursuant to section 22 of chapter 6D and the health care resources inventory
2107pursuant to section 9 of chapter 12C. The application shall be accompanied by a fee in an amount
2108to be determined pursuant to section 3B of chapter 7. All health care practices registered in the
2109commonwealth shall renew their certificates of registration with the department every 2 years.
2110The department shall share information relevant to the state health plan and focused assessments
2111pursuant to said section 22 of said chapter 6D with the commission and information relevant to
2112the health care resources inventory pursuant to said section 9 of said section 12C with the center.
2113 (g) All health care practices with more than 1 registered practicing clinician that
2114constitutes the practice shall designate a registered practicing clinician at the practice to serve as
2115health care director; provided, however, that the designated clinician shall hold a license issued
2116by the applicable board of registration and, when applicable, a certificate of registration issued
2117by said board, neither of which have been suspended or revoked. The director shall be
2118responsible for implementing policies and procedures to ensure compliance with local
2119ordinances and state and federal laws and regulations governing the practice of medicine or the
2120practice of nursing, including regulations promulgated and policies established by the applicable
2121board. The applicable board may impose discipline against the licenses of the director and
2122registered practicing clinicians who own and control the health care practice for failure of the
2123health care practice to comply with local ordinances and state and federal laws and regulations
2124governing the registered practicing clinician’s practice, including regulations promulgated and
2125policies established by the applicable board. 98 of 121
2126 (h) The department of public health may promulgate regulations to establish minimum
2127requirements for the conduct of a health care practice, including, but not limited to: (i)
2128compliance with this section; (ii) maintenance and access to medical records; and (iii) in the
2129event of a planned closure of the health care practice or an unplanned event that prevents the
2130health care practice from continuing operations, the development of a continuity plan to: (A)
2131ensure access to medical records, (B) provide notice to patients, and (C) assist patients with
2132transitioning to a new provider.
2133 Section 4B. (a) This section shall apply only to health care practices that are not owned or
2134controlled by hospitals licensed by the department of public health under chapter 111 or
2135nonprofit hospital health systems. It shall be a violation of this section for a management services
2136organization or other entity that is not a health care practice to exercise control over clinical
2137decisions of a health care practice. A management services organization, or any other
2138organization that is not a health care practice, that does the following shall be considered to have
2139control over the clinical decisions of the health care practice: (i) managing, supervising,
2140evaluating or recommending promotion or discipline of any owner of or registered practicing
2141clinician associated with the health care practice; (ii) negotiating with third-party payers on
2142behalf of a health care practice without first obtaining informed consent from the health care
2143practice’s owners; (iii) advertising or otherwise presenting as a health care practice or provider of
2144health care services; or (iv) performing any other functions that the department of public health
2145determines, by regulation, confers to a management services organization or any other entity that
2146is not a health care practice the ability to control the clinical decisions of the health care practice
2147or its registered practicing clinicians. 99 of 121
2148 (b) A health care practice shall maintain ultimate decision-making authority over: (i)
2149personnel decisions involving registered practicing clinicians, including, but not limited to,
2150employment status, compensation, hours or working conditions; (ii) coding or billing decisions;
2151(iii) the selection and use of property, including, but not limited to, real property, medical
2152equipment or medical supplies; (iv) the number of patients seen in a given period of time or the
2153amount of time spent with each patient; (v) the appropriate diagnostic test for medical
2154conditions; (vi) the use of patient medical records; (vii) referral decisions; or (viii) any other
2155function or decision that the department of public health determines, by regulation, confers to a
2156management services organization or any other entity that is not a health care practice the ability
2157to control the clinical decisions of a health care practice or its registered practicing clinicians.
2158 (c) It shall be a violation of this section for a management services organization or any
2159other entity that is not a health care practice to include in an agreement with any health care
2160practice provisions that would: (i) restrict the ability of the health care practice or practice owner
2161to exercise complete, unfettered control and discretion over the finances or capital of the health
2162care practice, including, but not limited to, restricting the ability to create, buy or sell stock, issue
2163dividends or sell the health care practice; (ii) restrict the ability of a person who owns stock in
2164the health care practice to transfer, alienate or otherwise exercise unfettered discretion and
2165control over their stock; (iii) restrict, in any way, the ability of the health care practice or
2166clinicians with independent practice authority associated with the health care practice to provide
2167health care services in any place, for any entity or in any form otherwise permitted by law; (iv)
2168restrict the ability of the health care practice to contract with another management services
2169organization for management or administrative services upon expiration of the current contract;
2170(v) limit the ability of the health care practice or the practice’s owners, employees or agents to 100 of 121
2171publicly discuss the business relationship between the health care practice and the management
2172services organization; provided, however, that this provision shall not limit the ability of any
2173person to bring any action relating to defamation, disclosure of confidential or proprietary
2174information or trade secrets or similar torts; (vi) limit access to, take control from or otherwise
2175obscure from any registered practicing clinicians providing services in connection with the health
2176care practice, the price, rate or amount of the charges for their services; (vii) establish, supervise,
2177manage or otherwise control the health care practice’s officers or directors; or (viii) create any
2178other situation the department of public health determines, by regulation, could create the
2179possibility of allowing the management services organization to control the clinical decisions of
2180the health care practice or registered practicing clinicians.
2181 (d) No management services organization shall have any ownership interest in or direct
2182or indirect control over health care practices for which the management services organization
2183provides services. No health care practice shall have any ownership interest in or direct or
2184indirect control over a management services organization unless the management services
2185organization is fully owned, alone or in combination, by: (i) health care practices substantially
2186engaged in delivering health care to patients in the commonwealth; (ii) registered practicing
2187clinicians who both: (A) hold a license from the applicable board of registration and, when
2188applicable, a certificate of registration that is issued by said board, neither of which have been
2189suspended or revoked, and (B) are substantially engaged in delivering health care to patients in
2190the commonwealth; or (iii) hospitals that hold a license issued by the department of public health
2191pursuant to chapter 111 or non-profit hospital health systems. For the purposes of this subsection,
2192a de minimis interest in a publicly traded company held in a mutual fund, index fund or similar
2193financial instrument shall not be considered an ownership interest. 101 of 121
2194 (e) No person shall serve as a director, officer, employee or contractor for both a
2195management services organization and a health care practice for which the management services
2196organization provides services; provided, however, that this subsection shall not apply when a
2197management services organization is fully owned, alone or in combination, by: (i) health care
2198practices substantially engaged in delivering health care to patients in the commonwealth; (ii)
2199registered practicing clinicians who both: (A) hold a license from the applicable board of
2200registration and, when applicable, a certificate of registration that is issued by said board, neither
2201of which have been suspended or revoked; and (B) are substantially engaged in delivering health
2202care to patients in the commonwealth; or (iii) hospitals that hold a license issued by the
2203department of public health pursuant to chapter 111 or nonprofit hospital health systems.
2204 (f) A violation of this section shall constitute the unauthorized practice of medicine in
2205violation of section 6 or the unauthorized practice of nursing in violation of section 80E, 80H or
220680J. Any provision of a contract or agreement that has the effect of violating this section shall be
2207void and unenforceable. If a court of competent jurisdiction finds a policy, contract or contract
2208provision void and unenforceable pursuant to this section, the court shall award the plaintiff
2209reasonable attorney’s fees and costs.
2210 (g) The department of public health, in consultation with the health policy commission,
2211shall promulgate regulations to effectuate the purposes of this section.
2212 SECTION 101. Section 9A of chapter 118E of the General Laws, as appearing in the
22132022 Official Edition, is hereby amended by adding the following paragraph:-
2214 (17) (a) Residents of the commonwealth who are under the age of 19 and enrolled in
2215MassHealth shall qualify for not less than 12 months of continuous eligibility; provided, 102 of 121
2216however, that continuous eligibility shall not apply to: (i) residents who are 19 years of age or
2217older, unless MassHealth provides continuous eligibility to such residents; (ii) individuals who
2218are under the age of 19 and no longer reside in the commonwealth; (iii) residents under the age
2219of 19 who requests voluntary disenrollment or whose representative requests such disenrollment
2220on behalf of said resident; or (iv) residents under the age of 19 whose eligibility is determined to
2221have been erroneously granted because of agency error or fraud, abuse or perjury attributed to
2222said resident or their representative.
2223 (b) The executive office of health and human services shall maximize federal financial
2224participation for the coverage and benefits provided under this section; provided, however, that
2225continuous eligibility under subparagraph (a) shall not result in any reduction of federal financial
2226participation; and provided further, that coverage and benefits provided under this paragraph
2227shall not be contingent upon the availability of federal financial participation.
2228 SECTION 102. Section 9C of chapter 118E of the General Laws, as appearing in the
22292022 Official Edition, is hereby amended by striking out, in line 161, the words “committee on
2230health care” and inserting in place thereof the following words:- joint committee on health care
2231financing.
2232 SECTION 103. Section 1 of chapter 175 of the General Laws, as so appearing, is hereby
2233amended by inserting after the definition of “Foreign company” the following definition:-
2234 “Health insurance company”, a company that engages in the business of health insurance.
2235 SECTION 104. Said section 1 of said chapter 175, as so appearing, is hereby further
2236amended by inserting after the definition of “Net value of policies” the following definition:- 103 of 121
2237 “Party of record”, for the purpose of a review by the commissioner of a written
2238agreement for a merger or consolidation of 2 or more health insurance companies, the health
2239policy commission, the center for health information and analysis, the attorney general, the
2240center for health information and analysis and any government agency with relevant oversight or
2241licensure authority over the proposed project or components therein.
2242 SECTION 105. Section 19A of said chapter 175, as so appearing, is hereby amended by
2243adding the following 2 sentences:-
2244 A party of record may review a written agreement for a merger or consolidation of 2 or
2245more health insurance companies submitted to the commissioner for written approval, as well as
2246provide written comment or specific recommendations for consideration by the commissioner. If
2247a party of record sends a written communication or submits written materials concerning a
2248written agreement, the commissioner shall provide copies of such communication or materials to
2249all other parties of record.
2250 SECTION 106. The fourth paragraph of section 5 of chapter 176A of the General Laws,
2251as so appearing, is hereby amended by inserting after the fourth sentence the following
2252sentence:- In determining whether rates of payment under this section are excessive, the
2253commissioner shall consider the affordability for consumers and purchasers of health insurance
2254products; provided, however, that the commissioner shall not disapprove a carrier’s rates solely
2255on the basis of the affordability standard.
2256 SECTION 107. The second paragraph of section 6 of said chapter 176A, as so appearing,
2257is hereby amended by adding the following sentence:- In determining whether the rates of
2258payment under a contract are excessive under this section, the commissioner shall consider the 104 of 121
2259affordability for consumers and purchasers of health insurance products; provided, however, that
2260the commissioner shall not disapprove a carrier’s rates solely on the basis of the affordability
2261standard.
2262 SECTION 108. The third paragraph of section 10 of said chapter 176A, as so appearing,
2263is hereby amended by inserting after the first sentence the following sentence:- In determining
2264whether the rates of payment under a contract are excessive under this section, the commissioner
2265shall consider the affordability for consumers and purchasers of health insurance products;
2266provided, however, that the commissioner shall not disapprove a carrier’s rates solely on the
2267basis of the affordability standard.
2268 SECTION 109. The second paragraph of section 4 of chapter 176B of the General Laws,
2269as so appearing, is hereby amended by inserting after the second sentence the following
2270sentence:- In determining whether the rates of payment under an agreement are excessive under
2271this section, the commissioner shall consider the affordability for consumers and purchasers of
2272health insurance products; provided, however, that the commissioner shall not disapprove a
2273carrier’s rates solely on the basis of the affordability standard.
2274 SECTION 110. The first paragraph of section 16 of chapter 176G of the General Laws,
2275as so appearing, is hereby amended by inserting after the second sentence the following
2276sentence:- In determining whether the rates of payment under a contract are excessive under this
2277section, the commissioner shall consider the affordability for consumers and purchasers of health
2278insurance products; provided, however, that the commissioner shall not disapprove a carrier’s
2279rates solely on the basis of the affordability standard. 105 of 121
2280 SECTION 111. Subsection (c) of section 6 of chapter 176J of the General Laws, as so
2281appearing, is hereby amended by inserting after the second sentence the following sentence:- In
2282determining whether the proposed changes to base rates of payment are excessive under this
2283section, the commissioner shall consider the affordability for consumers and purchasers of health
2284insurance products; provided, however, that the commissioner shall not disapprove a carrier’s
2285proposed changes to base rates solely on the basis of the affordability standard.
2286 SECTION 112. The second paragraph of subsection (g) of section 7 of chapter 176K of
2287the General Laws, as so appearing, is hereby amended by adding the following sentence:- In
2288determining whether rates of payment are excessive under this section, the commissioner shall
2289consider the affordability for consumers and purchasers of health insurance products; provided,
2290however, that the commissioner shall not disapprove a carrier’s rates solely on the basis of the
2291affordability standard.
2292 SECTION 113. Section 12 of chapter 176O of the General Laws, as so appearing, is
2293amended by adding the following subsections:-
2294 (g) For an insured member who is stable on a treatment, service or course of medication
2295as determined by a health care provider and approved for coverage by a previous carrier or health
2296benefit plan, a carrier or utilization review organization shall not restrict coverage of such
2297treatment, service or course of medication for at least 90 days upon the insured member’s
2298enrollment unless the previously approved admission, procedure, treatment, service or course of
2299medication is not a covered benefit under the insured member’s new plan; provided, however,
2300that a carrier may condition coverage of continued treatment by an out-of-network provider
2301under this subsection upon the out-of-network provider’s agreeing to accept reimbursement from 106 of 121
2302the carrier at the average in-network rate and not to impose cost sharing with respect to the
2303insured in an amount that would exceed the cost sharing imposed if the provider were in
2304network.
2305 (h) Preauthorization approval issued by a carrier for a prescribed maintenance medication
2306shall be valid for the length of the prescription, as written by the prescriber, up to 1 year. For the
2307purposes of this section, “maintenance medication” shall mean a prescribed treatment, or course
2308of medication intended for chronic disease management.
2309 SECTION 114. Section 21 of said chapter 176O, as so appearing, is hereby amended by
2310adding the following subsection:-
2311 (f) The commissioner shall make all information submitted to the division pursuant to
2312this section available to the center for health information and analysis.
2313 SECTION 115. The General Laws are hereby amended by inserting after chapter 176X
2314the following chapter:-
2315 Chapter 176Y. LICENSING AND REGULATION OF PHARMACY BENEFIT
2316MANAGERS.
2317 Section 1. As used in this chapter, the following words shall have the following meanings
2318unless the context clearly requires otherwise:
2319 “Carrier”, an insurer licensed or otherwise authorized to transact accident or health
2320insurance under chapter 175, a nonprofit hospital service corporation organized under chapter
2321176A, a nonprofit medical service corporation organized under chapter 176B, a health
2322maintenance organization organized under chapter 176G or an organization entering into a 107 of 121
2323preferred provider arrangement under chapter 176I; provided, however, that “carrier” shall not
2324include an employer purchasing coverage or acting on behalf of its employees or the employees
2325of a subsidiary or affiliated corporation of the employer; and provided further, that unless
2326otherwise provided, “carrier” shall not include any entity to the extent it offers a policy,
2327certificate or contract that provides coverage solely for dental care services or vision care
2328services.
2329 “Center”, the center for health information and analysis established under chapter 12C.
2330 “Commissioner”, the commissioner of insurance.
2331 “Division”, the division of insurance.
2332 “Health benefit plan”, a contract, certificate or agreement entered into, offered or issued
2333by a carrier to provide, deliver, arrange for, pay for or reimburse any of the costs of health care
2334services; provided, however, that the commissioner may, by regulation, define other health
2335coverage as a “health benefit plan” for the purposes of this chapter.
2336 “Pharmacy”, a physical or electronic facility under the direction or supervision of a
2337registered pharmacist that is authorized to dispense prescription drugs and has entered into a
2338network contract with a pharmacy benefit manager or a carrier.
2339 “Pharmacy benefit manager”, a person, business or other entity, however organized, that
2340directly or through a subsidiary provides pharmacy benefit management services for prescription
2341drugs and devices on behalf of a health benefit plan sponsor, including, but not limited to, a self-
2342insurance plan, labor union or other third-party payer; provided, however, that pharmacy benefit
2343management services shall include, but not be limited to: (i) the processing and payment of 108 of 121
2344claims for prescription drugs; (ii) the performance of drug utilization review; (iii) the processing
2345of drug prior authorization requests; (iv) pharmacy contracting; (v) the adjudication of appeals or
2346grievances related to prescription drug coverage contracts; (vi) formulary administration; (vii)
2347drug benefit design; (viii) mail and specialty drug pharmacy services; (ix) cost containment; (x)
2348clinical, safety and adherence programs for pharmacy services; and (xi) management of the cost
2349of covered prescription drugs; and provided further, that “pharmacy benefit manager” shall not
2350include a health benefit plan sponsor unless otherwise specified by the division.
2351 Section 2. (a) No person, business or other entity shall establish or operate as a pharmacy
2352benefit manager without obtaining a license from the division pursuant to this section. A license
2353may be granted if the division is satisfied that the applicant possesses the necessary organization,
2354background expertise and financial integrity to supply the services sought to be offered. A
2355pharmacy benefit manager license shall be valid for a period of 3 years and shall be renewable
2356for additional 3-year periods. The commissioner shall charge application and renewal fees in the
2357amount of $25,000. In no event may these fees, when combined with the assessment of
2358pharmacy benefit managers in section 6 of chapter 6D and section 7 of chapter 12C, exceed the
2359commonwealth’s estimated operating expenses of the pharmacy benefit manager licensure
2360program.
2361 (b) A license granted pursuant to this section and any rights or interests therein shall not
2362be transferable.
2363 (c) A person, business or other entity licensed as a pharmacy benefit manager shall
2364submit data and reporting information to the center according to the standards and methods
2365specified by the center pursuant to section 10A of chapter 12C. 109 of 121
2366 (d) The division may issue or renew a license pursuant to this section, subject to
2367restrictions in order to protect the interests of consumers. Such restrictions may include: (i)
2368limiting the type of services that a license holder may provide; (ii) limiting the activities in which
2369the license holder may be engaged; or (iii) addressing conflicts of interest between pharmacy
2370benefit managers and health plan sponsors.
2371 (e) The division shall develop an application for the licensure of pharmacy benefit
2372managers that shall include, but not be limited to: (i) the name of the applicant or pharmacy
2373benefit manage; (ii) the address and contact telephone number for the applicant; (iii) the name
2374and address of the agent of the applicant or pharmacy benefit manager for service of process in
2375the commonwealth; (iv) the name and address of any person with management or control over
2376the applicant or pharmacy benefit manager; and (v) any audited financial statements specific to
2377the applicant or pharmacy benefit manager. An applicant or pharmacy benefit manager shall
2378inform the division any material change to the information contained in its application, certified
2379by an officer of the applicant, within 30 days of such a change; provided, however, that, once
2380licensed, a pharmacy benefit manager shall inform the division of any material change to the
2381information contained in its application, certified by an officer of the pharmacy benefit manager.
2382 (f) The division may suspend, revoke, refuse to issue or renew or place on probation an
2383application or pharmacy benefit manager license for cause, which shall include, but not be
2384limited to: (i) the applicant or pharmacy benefit manager engaging in fraudulent activity that is
2385found by a court of law to be a violation of state or federal law; (ii) the division receiving
2386consumer complaints that justify an action under this chapter to protect the health, safety and
2387interests of consumers; (iii) the applicant or pharmacy benefit manager failing to pay an
2388application or renewal fee for a license; (iv) the applicant or pharmacy benefit manager failing to 110 of 121
2389comply with reporting requirements of the center under section 10A of chapter 12C; or (v) the
2390applicant or pharmacy benefit manager failing to comply with a requirement of this chapter.
2391 The division shall provide written notice to the applicant or pharmacy benefit manager
2392and advise in writing of the reason for any suspension, revocation, refusal to issue or renew or
2393placement on probation of an application or pharmacy benefit manager license. A copy of the
2394notice shall be forwarded to the center. The applicant or pharmacy benefit manager may make a
2395written demand upon the division within 30 days of receipt of such notice for a hearing before
2396the division to determine the reasonableness of the division’s action. The hearing shall be held
2397pursuant to chapter 30A.
2398 The division shall not suspend or cancel a license unless the division has first afforded
2399the pharmacy benefit manager an opportunity for a hearing pursuant to said chapter 30A.
2400 (g) If a person, business or other entity performs the functions of a pharmacy benefit
2401manager in violation of this chapter, the person, business or other entity shall be subject to a fine
2402of $5,000 per day for each day that the person, business or other entity is found to be in violation.
2403 (h) A pharmacy benefit manager licensed under this section shall notify a health carrier
2404client in writing of any activity, policy, practice contract or arrangement of the pharmacy benefit
2405manager that directly or indirectly presents any conflict of interest to the pharmacy benefit
2406manager’s relationship with or obligation to the health carrier client.
2407 (i) The division shall promulgate regulations and adopt policies and procedures necessary
2408to implement this section. 111 of 121
2409 SECTION 116. There shall be a task force to: (i) study primary care access, delivery and
2410payment in the commonwealth; (ii) develop and issue recommendations to stabilize and
2411strengthen the primary care system and the increase of recruitment and retention in the primary
2412care workforce; and (iii) increase the financial investment in and patient access to primary care
2413across the commonwealth.
2414 (b) The task force shall consist of: the secretary of health and human services or a
2415designee, who shall serve as co-chair; the executive director of the health policy commission or a
2416designee, who shall serve as co-chair; the assistant secretary for MassHealth or a designee; the
2417executive director of the center for health information and analysis or a designee; the
2418commissioner of insurance or a designee; the chairs of the joint committee on health care
2419financing or their designees; 1 member from the Massachusetts Academy of Family Physicians,
2420Inc.; 1 member from the Massachusetts Chapter of the American Academy of Pediatrics; 1
2421member from a rural health care practice with expertise in primary care; 1 member from
2422Community Care Cooperative, Inc.; 1 member from the Massachusetts Medical Society with
2423expertise in primary care; 1 member from the Massachusetts Coalition of Nurse Practitioners,
2424Inc. with expertise in primary care or in delivering care in a community health center; 1 member
2425from the Massachusetts Association of Physician Assistants, Inc. with expertise in primary care;
24261 member from the National Association of Social Workers, Inc. – Massachusetts Chapter with
2427expertise in behavioral health in a primary care setting; 1 member from the Massachusetts
2428League of Community Health Centers, Inc.; 1 member from the Massachusetts Health and
2429Hospital Association, Inc.; 1 member from the Massachusetts Association of Health Plans, Inc.;
24301 member from Blue Cross and Blue Shield of Massachusetts, Inc.; 1 member from the
2431Association Industries of Massachusetts; 1 member from the Retailers Association of 112 of 121
2432Massachusetts, Inc.; 1 member from Health Care For All, Inc.; 1 member from the
2433Massachusetts Chapter of the American College of Physicians; 1 member from the
2434Massachusetts Primary Care Alliance for Patients; and 1 member from Massachusetts Health
2435Quality Partners, Inc.
2436 (c) The task force shall develop recommendations to: (i) define primary care services,
2437codes and providers; (ii) develop a standardized set of data reporting requirements for private
2438and public health care payers, providers and provider organizations to enable the commonwealth
2439and private and public health care payers to track payments for primary care services, including,
2440but not limited to, fee-for-service, prospective payments, value-based payments and grants to
2441primary care providers, fees levied on a primary care provider by a provider organization or
2442hospital system of which the primary care provider is affiliated and provider spending on
2443primary care services; (iii) establish a primary care spending target for private and public health
2444care payers that reflects the cost to deliver evidence-based, equitable and culturally competent
2445primary care; (iv) propose payment models to increase private and public reimbursement for
2446primary care services; (v) assess the impact of health plan design on health equity and patient
2447access to primary care services; (vi) monitor and track the needs of and service delivery to
2448residents of the commonwealth; and (vii) create a short-term and long-term workforce
2449development plan to increase the supply and distribution of and improve working conditions of
2450primary care clinicians and other primary care workers. The task force may make additional
2451recommendations and propose legislation necessary to carry out its recommendations.
2452 (d) The task force shall, in consultation with the center for health information and
2453analysis, define the data required to satisfy the contents of this section. The center for health
2454information and analysis shall adopt regulations to require providers and private and public 113 of 121
2455health care payers to submit data or information necessary for the task force to fulfill its duties
2456with this section. Any data collected shall be public and available through the Massachusetts
2457Primary Care Dashboard maintained by the center and Massachusetts Health Quality Partners,
2458Inc.
2459 (e) Not later than March 15, 2025, the task force shall issue its report of the findings and
2460recommendations under clauses (i) and (ii) of subsection (c) with the clerks of the senate and the
2461house of representatives, the senate and house committees on ways and means, the joint
2462committee on health care financing, the center for health information and analysis, the health
2463policy commission and the division of insurance.
2464 (f) Not later than June 15, 2025, the task force shall issue its report of the findings and
2465recommendations under clause (iii) of subsection (c) with the clerks of the senate and the house
2466of representatives, the senate and house committees on ways and means, the joint committee on
2467health care financing, the center for health information and analysis, the health policy
2468commission and the division of insurance.
2469 (g) Not later than September 15, 2025, the task force shall issue its report of the findings
2470and recommendations under clauses (iv) and (v) of subsection (c) with the clerks of the senate
2471and the house of representatives, the senate and house committees on ways and means, the joint
2472committee on health care financing, the center for health information and analysis, the health
2473policy commission and the division of insurance.
2474 (h) Not later than December 15, 2025, the task force shall issue its report of the findings
2475and recommendations under clauses (vi) and (vii) of subsection (c) with the clerks of the senate
2476and the house of representatives, the senate and house committees on ways and means, the joint 114 of 121
2477committee on health care financing, the center for health information and analysis, the health
2478policy commission and the division of insurance.
2479 SECTION 117. (a) There shall be a task force to study the use of prior authorization for
2480health care services and its impact on overall costs in the health care system, and delivery of and
2481access to high quality health care. The task force shall consist of 12 members: the executive
2482director of the health policy commission or a designee, who shall serve as co-chair; the
2483commissioner of insurance or a designee, who shall serve as co-chair; the assistant secretary for
2484MassHealth; the executive director of the group insurance commission; 1 representative from the
2485Massachusetts Association of Health Plans, Inc.; 1 representative from Blue Cross and Blue
2486Shield of Massachusetts, Inc.; 1 representative from the Massachusetts Medical Society; 1
2487representative from Massachusetts Association for Mental Health, Inc.; 1 representative from the
2488Massachusetts Health and Hospital Association, Inc.; 1 representative from the Massachusetts
2489Academy of Family Physicians, Inc.; 1 representative from the Massachusetts League of
2490Community Health Centers, Inc.; 1 representative from Massachusetts Taxpayers Foundation,
2491Inc.; 1 representative from Associated Industries of Massachusetts; and 1 representative from
2492Health Care For All, Inc.
2493 (b) The task force shall analyze: (i) the services, treatments and medications that require
2494prior authorization by payers in Massachusetts; (ii) the factors used by payers to determine
2495whether a service, treatment or medication is appropriate for prior authorization, including
2496considerations of potential for provider abrasion, adverse impacts on health outcomes, the
2497availability, and comparative cost and effectiveness of alternative treatment options and risk of
2498provider overuse of the treatment; (iii) the processes used by payers to obtain prior authorization
2499for a service, treatment or medication; (iv) the potential for streamlining prior authorization 115 of 121
2500processes using automation, electronic submissions, gold carding or other means; (v) actuarial
2501analysis of the impact of prior authorization requirements on the commonwealth’s efforts to meet
2502the health care cost benchmark established under section 9 of chapter 6D; (vi) any state and
2503federal laws requiring or limiting prior authorization by public or private payers for a service,
2504treatment or medication; (vii) the feasibility of an easily accessible, publicly available website
2505with up-to-date information that provides information regarding utilization review requirements
2506for treatments; (viii) the services that have no or low prior authorization denial rates across
2507carriers; (ix) administrative barriers preventing active prior authorizations to continue for their
2508approved duration in instances where an insured individual transitions to a new plan with the
2509same carrier or to a new carrier; (x) expedited utilization review processes across carriers; and
2510(xi) barriers to and solutions for providing uniformity in processes or requirements among
2511different health care segments, including Medicaid, Medicare, fully-insured and self-insured
2512commercial plans.
2513 (c) The task force shall develop recommendations regarding: (i) simplifying and
2514standardizing prior authorization for evidence-based treatments, services or courses of
2515medication; (ii) improving access to medically necessary covered services for patients; (iii)
2516reducing the response time from a carrier or utilization review organization for prior
2517authorization approvals and denials; (iv) reducing administrative barriers and costs related to
2518prior authorization on health care providers; (v) limiting the recoupment and denial of claims for
2519medically necessary covered services; (vi) increasing transparency for covered benefits and prior
2520authorization requirements; (vii) standardizing prior authorization processes, forms and
2521requirements for use across health insurance carriers; (viii) eliminating prior authorization
2522requirements for services, treatments, procedures and prescription drugs that have low variation 116 of 121
2523in utilization across providers or low denial rates; (ix) eliminating prior authorization for or
2524reducing the prior authorization review process to 24 hours for emergency treatments, services or
2525courses of medication; (x) ensuring any physician or personnel under the supervision of a
2526physician that is reviewing a prior authorization request for a carrier has the clinical expertise to
2527treat the medical condition or disease that is the subject of the request; and (xi) removing prior
2528authorization for certain chronic disease management.
2529 (d) The task force shall develop a report of its findings and recommendations, including
2530any legislative or regulatory changes necessary to implement its recommendations. The task
2531force shall file its report with the clerks of the senate and the house of representatives, the senate
2532and house committees on ways and means and the joint committee on health care financing not
2533later than July 31, 2025.
2534 SECTION 118. The department of public health shall study and make recommendations
2535on improving the effectiveness and efficiency of electronic health records in the commonwealth
2536for the purpose of supporting the commonwealth’s efforts in meeting the health care cost growth
2537benchmark established in chapter 6D of the General Laws. The study shall contain information
2538and recommendations on topics related to electronic health records, including, but not limited to:
2539(i) containing costs for providers, payors and consumers; (ii) accessibility and interoperability;
2540(iii) barriers to efficient exchange of patient information through electronic health records; (iv)
2541the impact of electronic health records on the administrative burden on providers; (v) the impacts
2542on patient care from delayed information exchanged on electronic health records; and (vi)
2543opportunities and measures to improve the operation of electronic health records in the
2544commonwealth. Prior to submitting recommendations, the department shall consult with
2545stakeholders, including, but not limited to, physicians, hospitals, providers of electronic health 117 of 121
2546records and consumer advocates. Not later than December 31, 2025, the department shall file the
2547report with the clerks of the senate and house of representatives, the senate and house
2548committees on ways and means, and the joint committee on health care financing.
2549 SECTION 119. Notwithstanding any general or special law to the contrary, the division
2550of insurance shall consider the recommendations issued by the task force established in section
2551111 in developing and implementing rules, regulations, bulletins or other guidance to simplify
2552health insurance prior authorization standards and processes.
2553 SECTION 120. (a) Notwithstanding any general or special law to the contrary, the
2554secretary of health and human services shall direct monthly payments to eligible hospitals in the
2555form of enhanced Medicaid payments, supplemental payments or other appropriate mechanisms.
2556Each payment made to an eligible hospital shall be allocated in direct proportion to each eligible
2557hospital’s average monthly Medicaid payments, as determined by the secretary, for inpatient and
2558outpatient acute hospital services for the preceding year or the most recent year for which data is
2559available; provided, however, that such enhanced Medicaid payments shall not be used in
2560subsequent years by the secretary to calculate an eligible hospital’s average monthly payment;
2561and provided further, that such payments shall not offset existing Medicaid payments for which
2562an eligible hospital may be qualified to receive. In any fiscal year, the total sum of all payments
2563made to eligible hospitals under this section shall not exceed $45,000,000. Eligible hospitals may
2564consider expending said payments to strengthen behavioral health supports and services.
2565 (b) The secretary may require as a condition of receiving payment any such reasonable
2566condition of payment that the secretary determines necessary to ensure the availability, to the
2567extent possible, of federal financial participation for the payments and the secretary may incur 118 of 121
2568expenses and the comptroller may certify amounts for payment in anticipation of expected
2569receipt of federal financial participation for the payments.
2570 (c) The executive office of health and human services may promulgate regulations as
2571necessary to carry out this section.
2572 (d) For the purposes of this section “eligible hospital” shall mean an acute care hospital
2573licensed under section 51 of chapter 111 of the General Laws that: (i) has a statewide relative
2574price less than 0.99, as calculated by the center for health information and analysis according to
2575data from the most recent available year; (ii) has a public payer mix greater than 63 per cent, as
2576calculated by the center for health information and analysis according to data from the most
2577recent available year; and (iii) is not owned by or financially consolidated or corporately
2578affiliated with a provider organization, as defined by section 1 of chapter 6D of the General
2579Laws and as reported by the center for health information and analysis in the fiscal year 2022
2580hospital cost report database: (1) owns or controls 4 or more acute care hospitals licensed under
2581said section 51 of said chapter 111; or (2) through which the total net assets of all affiliated acute
2582care hospitals within the provider organization is greater than $800,000,000.
2583 (e) For the purposes of subsection (d), a clinical affiliation with a provider organization,
2584absent ownership, financial consolidation or corporate affiliation, shall not disqualify an eligible
2585hospital from payments authorized under this section.
2586 SECTION 121. (a) Notwithstanding any general or special law to the contrary, for the
2587purposes of monitoring and enforcing the health care cost growth benchmark for calendar years
25882021 to 2025, inclusive, the center for health information and analysis shall apply sections 8, 9, 119 of 121
258910, 16 and 18 of chapter 12C of the General Laws as those sections are in effect on December 1,
25902024.
2591 (b) Notwithstanding any general or special law to the contrary, for the purposes of
2592monitoring and enforcing the health care cost growth benchmark for calendar years 2021 to
25932025, inclusive, the health policy commission shall apply sections 9 and 10 of chapter 6D of the
2594General Laws as those sections are in effect on December 1, 2024.
2595 (c) Notwithstanding any general or special law to the contrary, the first benchmark cycle
2596shall consist of the years 2025 and 2026. The health care cost growth benchmark for that
2597benchmark cycle shall be the average of the 2025 health care cost growth benchmark that the
2598health policy commission governing board established in 2024 and the growth rate of potential
2599gross state product for 2026 established under section 7H½ of chapter 29 of the General Laws.
2600 (d) Notwithstanding any general or special law to the contrary, not later than April 15,
26012025, the board shall establish the health care cost growth benchmark pursuant to section 9 of
2602chapter 6D of the general laws for: (i) the benchmark cycle consisting of the years 2025 and
26032026; and (ii) the benchmark cycle consisting of the years 2026 and 2027.
2604 (e) Notwithstanding any general or special law to the contrary, on or before January 15,
26052025, the secretary and house and senate committees on ways and means shall jointly develop
2606growth rates of potential gross state product pursuant to section 7H½ of chapter 29 of the
2607General Laws for each of the calendar years of 2026 and 2027.
2608 SECTION 122. Notwithstanding any general or special law, rule or regulation to the
2609contrary, section 13 of chapter 6D of the General Laws, as amended by this act, shall apply only
2610to material change notices submitted after the effective date of this act; provided, however, that 120 of 121
2611said section 13 of said chapter 6D shall apply to material changes that meet all of the following
2612criteria: (i) the health policy commission received a completed material change notice regarding
2613the material change on or after March 1, 2024; (ii) the health policy commission has not yet
2614determined whether to conduct a cost and market impact review in regard to the material change;
2615and (iii) the health policy commission classifies the material change as involving a provider or
2616provider organization’s merger or affiliation resulting in an increase in net patient service
2617revenue of $10,000,000 or more. For such material change notices, the health policy commission
2618shall be permitted to require submission of a new or revised material change form, request
2619additional documentation and information and take an additional 30 days to conduct its
2620preliminary review.
2621 SECTION 123. Notwithstanding any general or special law, rule or regulation to the
2622contrary, the health policy commission shall submit the first state health plan to the governor and
2623the general court, as required under section 22 of chapter 6D of the General Laws, on or before
2624January 1, 2026.
2625 SECTION 124. Notwithstanding any general or special law to the contrary, section 23 of
2626said chapter 6D shall only apply to private equity firms that obtain a financial interest in a
2627provider or provider organization and to financial actions taken by registered provider
2628organizations with private equity investment after the effective date of this act.
2629 SECTION 125. Notwithstanding any general or special law, rule or regulation to the
2630contrary, section 4B of chapter 112 of the General Laws shall apply only to contracts or
2631agreements between health care practices and management services organizations entered into
2632after the effective date of this act. 121 of 121
2633 SECTION 126. Section 17 shall take effect on January 1, 2025.
2634 SECTION 127. Section 67 shall take effect on August 1, 2025.
2635 SECTION 128. All health care practices required to register pursuant to section 4A of
2636chapter 112 of the General Laws shall register with the board of registration in medicine not later
2637than January 1, 2026.
2638 SECTION 129. The commissioner of occupational licensure and the commissioner of
2639public health shall adopt the regulations required under section 96 not later than 6 months after
2640the effective date of this act.
2641 SECTION 130. The division of insurance shall adopt the rules and regulations required
2642under section 112 not later than 6 months after the task force established in section 111 issues its
2643final report and recommendations.
2644 SECTION 131. Section 113 is hereby repealed.
2645 SECTION 132. Section 124 shall take effect 2 years from the effective date of this act.