1 of 1
HOUSE DOCKET, NO. 3148 FILED ON: 1/16/2025
HOUSE . . . . . . . . . . . . . . . No. 1356
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Mark J. Cusack
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act relative to transparency of hospital and health system finances.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :DATE ADDED:Mark J. Cusack5th Norfolk1/16/2025 1 of 7
HOUSE DOCKET, NO. 3148 FILED ON: 1/16/2025
HOUSE . . . . . . . . . . . . . . . No. 1356
By Representative Cusack of Braintree, a petition (accompanied by bill, House, No. 1356) of
Mark J. Cusack relative to hospital and health system finances. Health Care Financing.
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Fourth General Court
(2025-2026)
_______________
An Act relative to transparency of hospital and health system finances.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Chapter 12C of the General Laws, as so appearing in the 2022 Official
2Edition, is hereby amended by striking section 8 in its entirety and inserting in place thereof the
3following section:-
4 Section 8. (a) The center shall promulgate such regulations as necessary to ensure the
5uniform collection, analysis, and reporting of revenues, charges, costs, prices, and utilization of
6health care services and other such data as the center may require of institutional providers and
7their parent organizations and any other affiliated entities, including significant equity investors,
8health care real estate investment trusts and management services organizations, non-institutional
9providers and provider organizations; provided, however, that the center may establish reporting
10thresholds through regulation. Such uniform reporting shall enable the center to identify, on a
11patient-centered and provider-specific basis, statewide and regional trends in the cost, price,
12availability and utilization of medical, surgical, diagnostic and ancillary services provided by
13acute hospitals, nursing homes, chronic care and rehabilitation hospitals, other specialty 2 of 7
14hospitals, clinics, including mental health clinics and the ambulatory care providers as the center
15may specify. The center shall also promulgate regulations to require providers to report any
16agreements through which provider agrees to furnish another provider with a discount, rebate or
17any other type of refund or remuneration in exchange for, or in any way related to, the provision
18of heath care services.
19 (b) With respect to any acute or non-acute hospital, the center shall, by regulation,
20designate information necessary to effectuate this chapter including, but not be limited to, the
21filing of a charge book, the filing of cost data and audited financial statements, including the
22audited financial statements of the parent organization’s out-of-state operations, significant
23equity investors, health care real estate investment trusts and management services organizations,
24and the submission of merged billing and discharge data. The center shall, by regulation,
25designate standard systems for determining, reporting and auditing volume, case-mix, proportion
26of low-income patients and any other information necessary to effectuate this chapter and to
27prepare reports comparing acute and non-acute care hospitals by cost, utilization and outcome.
28The regulations may require the hospitals to file required information and data by electronic
29means; provided, however, that the center shall allow reasonable waivers from the requirement.
30The center shall, at least annually, publish a report analyzing the comparative information to
31assist third-party payers and other purchasers of health services in making informed decisions.
32The report shall include comparative price and service information relative to outpatient mental
33health services.
34 (c) The center shall also collect, analyze, and report such data as it considers necessary in
35order to better protect the public's interest in monitoring the financial conditions of acute
36hospitals and health systems.. The information shall be analyzed and reported on an industry- 3 of 7
37wide and hospital and health system-specific basis and shall include, but not be limited to: (1)
38gross and net patient service revenues, (2) sources of hospital revenue, including revenue
39excluded from consideration in the establishment of hospital rates and charges under section 13G
40of chapter 118E; (3) private sector charges; (4) trends in inpatient and outpatient case mix, payer
41mix, hospital volume and length of stay; (5) total payroll as a per cent of operating expenses, as
42well as the salary and benefits of the top 10 highest compensated employees, identified by
43position description and specialty, (6) margins, including margins by payer type; (7) investments;
44(8) information on any relationships with significant equity investors, health care real estate
45investment trusts and management service organizations, (9) pension benefit obligations
46including reporting on ratio of pension-adjusted long-term debt to total capitalization and the
47funded status of entity’s defined benefit pension; (10) cost and cost trend data for direct labor
48including contracted and non-contracted labor and by professional category; (11) average hourly
49wage data by occupational categories utilizing the same categories utilized by Medicare Wage
50Index Occupational Mix Survey, Form CMS-10079; (12) the bond rating submission package for
51hospital or health system; and (13) detailed information about financial transfers between health
52systems and their hospitals, physician practices, and other facilities.
53 (d) The center shall measure and report the relative financial importance of an individual
54hospital, physician practice, or other entity within a health system to the overall health system by
55measuring and reporting the following information: (1) the entity’s share of operating revenue,
56(2) the entity’s share of non-operating revenue, and (3) the entity’s share of debt. The center shall
57ensure that when measuring the performance of a hospital or health system, information is
58included regarding all components of the health system. The center shall collect and report 4 of 7
59detailed information regarding financial transfers between health systems and their hospitals
60physician practices, and other affiliated facilities.
61 (e) The center shall publish annual reports and establish a continuing program of
62investigation and study of financial trends in the acute hospital and health system industry,
63including an analysis of systemic instabilities or inefficiencies that contribute to financial distress
64in the acute hospital industry. The reports shall include an identification and examination of
65hospitals that the center considers to be in financial distress, including any hospitals at risk of
66closing or discontinuing essential health services, as defined by the department of public health
67under section 51G of chapter 111, as a result of financial distress. The reports on the financial
68health of hospitals and health systems, the center shall include, but not be limited to the
69following financial metrics:
70 (1)Total margin by line of business, including all commercial business and for all state
71and federal government business;
72 (2) Operating margin by line of business, including all commercial business and for all
73state and federal government business;
74 (3) Debt service coverage ratio;
75 (4) The average age of plant ratio;
76 (5) Days cash on hand;
77 (6) Ratio of pension-adjusted long-term debt to total capitalization;
78 (7) Capital expenditure as a percent of depreciation expense; 5 of 7
79 (8) Free care as a percent of total operating margins;
80 (9) Medicaid supplemental payments as a percent of net patient service revenue (NPSR);
81and
82 (10) Uncompensated care burden.
83 The center may periodically, as necessary and appropriate, review and modify uniform
84reporting requirements and update the metrics utilized to capture emerging financial measures in
85a complete and uniform manner and may require hospitals to report required information
86quarterly to effectuate this subsection.
87 (f) The center shall publicly report and place on its website information on health status
88adjusted total medical expenses including a breakdown of the health status adjusted total medical
89expenses by major service category and by payment methodology, relative prices and hospital
90inpatient and outpatient costs, including direct and indirect costs under this chapter on an annual
91basis; provided, however, that at least 10 days before the public posting or reporting of provider
92specific information the affected provider shall be provided the information for review. The
93center shall request from the federal Centers for Medicare and Medicaid Services the health
94status adjusted total medical expenses of provider groups that serve Medicare patients.
95 (g) When collecting information or compiling reports intended to compare individual
96health care providers, the center shall require that:
97 (1) providers which are representative of the target group for profiling shall be
98meaningfully involved in the development of all aspects of the profile methodology, including
99collection methods, formatting and methods and means for release and dissemination; 6 of 7
100 (2) the entire methodology for collecting and analyzing the data shall be disclosed to all
101relevant provider organizations and to all providers under review;
102 (3) data collection and analytical methodologies shall be used that meet accepted
103standards of validity and reliability;
104 (4) the limitations of the data sources and analytic methodologies used to develop
105provider profiles shall be clearly identified and acknowledged, including, but not limited to, the
106appropriate and inappropriate uses of the data;
107 (5) to the greatest extent possible, provider profiling initiatives shall use standard-based
108norms derived from widely accepted, provider-developed practice guidelines;
109 (6) provider profiles and other information that have been compiled regarding provider
110performance shall be shared with providers under review prior to dissemination; provided,
111however, that opportunity for corrections and additions of helpful explanatory comments shall be
112provided prior to publication; and, provided, further, that such profiles shall only include data
113which reflect care under the control of the provider for whom such profile is prepared;
114 (7) comparisons among provider profiles shall adjust for patient case-mix and other
115relevant risk factors and control for provider peer groups, when appropriate;
116 (8) effective safeguards to protect against the unauthorized use or disclosure of provider
117profiles shall be developed and implemented;
118 (9) effective safeguards to protect against the dissemination of inconsistent, incomplete,
119invalid, inaccurate or subjective profile data shall be developed and implemented; and 7 of 7
120 (10) the quality and accuracy of provider profiles, data sources and methodologies shall
121be evaluated regularly.
122 SECTION 2. Chapter 12C of the General Laws, as so appearing, is hereby amended by
123inserting after section 8 the following new section:-
124 8A. Reporting of Hospital Margins
125 (a) If in any fiscal year, an acute hospital, as defined in this chapter, reports to the center
126an operating margin that exceeds 3.6 percent, the center shall hold a public hearing within 60
127days. The acute hospital shall submit testimony on its overall financial condition and the
128continued need to sustain an operating margin that exceeds 3.6 percent. The acute hospital shall
129also submit testimony on efforts the acute hospital is making to advance health care cost
130containment and health care quality improvement; and whether, and in what proportion to the
131total operating margin, the acute hospital will dedicate any funds to reducing health care costs.
132The center shall review such testimony and issue a final report on the results of the hearing. In
133implementing the requirements of this Section, the center shall utilize data collected by hospitals
134pursuant to the requirements of Section 8 of chapter 12C.