Massachusetts 2025-2026 Regular Session

Massachusetts House Bill H1356 Compare Versions

Only one version of the bill is available at this time.

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2	2	HOUSE DOCKET, NO. 3148 FILED ON: 1/16/2025
3	3	HOUSE . . . . . . . . . . . . . . . No. 1356
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Mark J. Cusack
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act relative to transparency of hospital and health system finances.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :DATE ADDED:Mark J. Cusack5th Norfolk1/16/2025 1 of 7
16	16	HOUSE DOCKET, NO. 3148 FILED ON: 1/16/2025
17	17	HOUSE . . . . . . . . . . . . . . . No. 1356
18	18	By Representative Cusack of Braintree, a petition (accompanied by bill, House, No. 1356) of
19	19	Mark J. Cusack relative to hospital and health system finances. Health Care Financing.
20	20	The Commonwealth of Massachusetts
21	21	_______________
22	22	In the One Hundred and Ninety-Fourth General Court
23	23	(2025-2026)
24	24	_______________
25	25	An Act relative to transparency of hospital and health system finances.
26	26	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
27	27	of the same, as follows:
28	28	1 SECTION 1. Chapter 12C of the General Laws, as so appearing in the 2022 Official
29	29	2Edition, is hereby amended by striking section 8 in its entirety and inserting in place thereof the
30	30	3following section:-
31	31	4 Section 8. (a) The center shall promulgate such regulations as necessary to ensure the
32	32	5uniform collection, analysis, and reporting of revenues, charges, costs, prices, and utilization of
33	33	6health care services and other such data as the center may require of institutional providers and
34	34	7their parent organizations and any other affiliated entities, including significant equity investors,
35	35	8health care real estate investment trusts and management services organizations, non-institutional
36	36	9providers and provider organizations; provided, however, that the center may establish reporting
37	37	10thresholds through regulation. Such uniform reporting shall enable the center to identify, on a
38	38	11patient-centered and provider-specific basis, statewide and regional trends in the cost, price,
39	39	12availability and utilization of medical, surgical, diagnostic and ancillary services provided by
40	40	13acute hospitals, nursing homes, chronic care and rehabilitation hospitals, other specialty 2 of 7
41	41	14hospitals, clinics, including mental health clinics and the ambulatory care providers as the center
42	42	15may specify. The center shall also promulgate regulations to require providers to report any
43	43	16agreements through which provider agrees to furnish another provider with a discount, rebate or
44	44	17any other type of refund or remuneration in exchange for, or in any way related to, the provision
45	45	18of heath care services.
46	46	19 (b) With respect to any acute or non-acute hospital, the center shall, by regulation,
47	47	20designate information necessary to effectuate this chapter including, but not be limited to, the
48	48	21filing of a charge book, the filing of cost data and audited financial statements, including the
49	49	22audited financial statements of the parent organization’s out-of-state operations, significant
50	50	23equity investors, health care real estate investment trusts and management services organizations,
51	51	24and the submission of merged billing and discharge data. The center shall, by regulation,
52	52	25designate standard systems for determining, reporting and auditing volume, case-mix, proportion
53	53	26of low-income patients and any other information necessary to effectuate this chapter and to
54	54	27prepare reports comparing acute and non-acute care hospitals by cost, utilization and outcome.
55	55	28The regulations may require the hospitals to file required information and data by electronic
56	56	29means; provided, however, that the center shall allow reasonable waivers from the requirement.
57	57	30The center shall, at least annually, publish a report analyzing the comparative information to
58	58	31assist third-party payers and other purchasers of health services in making informed decisions.
59	59	32The report shall include comparative price and service information relative to outpatient mental
60	60	33health services.
61	61	34 (c) The center shall also collect, analyze, and report such data as it considers necessary in
62	62	35order to better protect the public's interest in monitoring the financial conditions of acute
63	63	36hospitals and health systems.. The information shall be analyzed and reported on an industry- 3 of 7
64	64	37wide and hospital and health system-specific basis and shall include, but not be limited to: (1)
65	65	38gross and net patient service revenues, (2) sources of hospital revenue, including revenue
66	66	39excluded from consideration in the establishment of hospital rates and charges under section 13G
67	67	40of chapter 118E; (3) private sector charges; (4) trends in inpatient and outpatient case mix, payer
68	68	41mix, hospital volume and length of stay; (5) total payroll as a per cent of operating expenses, as
69	69	42well as the salary and benefits of the top 10 highest compensated employees, identified by
70	70	43position description and specialty, (6) margins, including margins by payer type; (7) investments;
71	71	44(8) information on any relationships with significant equity investors, health care real estate
72	72	45investment trusts and management service organizations, (9) pension benefit obligations
73	73	46including reporting on ratio of pension-adjusted long-term debt to total capitalization and the
74	74	47funded status of entity’s defined benefit pension; (10) cost and cost trend data for direct labor
75	75	48including contracted and non-contracted labor and by professional category; (11) average hourly
76	76	49wage data by occupational categories utilizing the same categories utilized by Medicare Wage
77	77	50Index Occupational Mix Survey, Form CMS-10079; (12) the bond rating submission package for
78	78	51hospital or health system; and (13) detailed information about financial transfers between health
79	79	52systems and their hospitals, physician practices, and other facilities.
80	80	53 (d) The center shall measure and report the relative financial importance of an individual
81	81	54hospital, physician practice, or other entity within a health system to the overall health system by
82	82	55measuring and reporting the following information: (1) the entity’s share of operating revenue,
83	83	56(2) the entity’s share of non-operating revenue, and (3) the entity’s share of debt. The center shall
84	84	57ensure that when measuring the performance of a hospital or health system, information is
85	85	58included regarding all components of the health system. The center shall collect and report 4 of 7
86	86	59detailed information regarding financial transfers between health systems and their hospitals
87	87	60physician practices, and other affiliated facilities.
88	88	61 (e) The center shall publish annual reports and establish a continuing program of
89	89	62investigation and study of financial trends in the acute hospital and health system industry,
90	90	63including an analysis of systemic instabilities or inefficiencies that contribute to financial distress
91	91	64in the acute hospital industry. The reports shall include an identification and examination of
92	92	65hospitals that the center considers to be in financial distress, including any hospitals at risk of
93	93	66closing or discontinuing essential health services, as defined by the department of public health
94	94	67under section 51G of chapter 111, as a result of financial distress. The reports on the financial
95	95	68health of hospitals and health systems, the center shall include, but not be limited to the
96	96	69following financial metrics:
97	97	70 (1)Total margin by line of business, including all commercial business and for all state
98	98	71and federal government business;
99	99	72 (2) Operating margin by line of business, including all commercial business and for all
100	100	73state and federal government business;
101	101	74 (3) Debt service coverage ratio;
102	102	75 (4) The average age of plant ratio;
103	103	76 (5) Days cash on hand;
104	104	77 (6) Ratio of pension-adjusted long-term debt to total capitalization;
105	105	78 (7) Capital expenditure as a percent of depreciation expense; 5 of 7
106	106	79 (8) Free care as a percent of total operating margins;
107	107	80 (9) Medicaid supplemental payments as a percent of net patient service revenue (NPSR);
108	108	81and
109	109	82 (10) Uncompensated care burden.
110	110	83 The center may periodically, as necessary and appropriate, review and modify uniform
111	111	84reporting requirements and update the metrics utilized to capture emerging financial measures in
112	112	85a complete and uniform manner and may require hospitals to report required information
113	113	86quarterly to effectuate this subsection.
114	114	87 (f) The center shall publicly report and place on its website information on health status
115	115	88adjusted total medical expenses including a breakdown of the health status adjusted total medical
116	116	89expenses by major service category and by payment methodology, relative prices and hospital
117	117	90inpatient and outpatient costs, including direct and indirect costs under this chapter on an annual
118	118	91basis; provided, however, that at least 10 days before the public posting or reporting of provider
119	119	92specific information the affected provider shall be provided the information for review. The
120	120	93center shall request from the federal Centers for Medicare and Medicaid Services the health
121	121	94status adjusted total medical expenses of provider groups that serve Medicare patients.
122	122	95 (g) When collecting information or compiling reports intended to compare individual
123	123	96health care providers, the center shall require that:
124	124	97 (1) providers which are representative of the target group for profiling shall be
125	125	98meaningfully involved in the development of all aspects of the profile methodology, including
126	126	99collection methods, formatting and methods and means for release and dissemination; 6 of 7
127	127	100 (2) the entire methodology for collecting and analyzing the data shall be disclosed to all
128	128	101relevant provider organizations and to all providers under review;
129	129	102 (3) data collection and analytical methodologies shall be used that meet accepted
130	130	103standards of validity and reliability;
131	131	104 (4) the limitations of the data sources and analytic methodologies used to develop
132	132	105provider profiles shall be clearly identified and acknowledged, including, but not limited to, the
133	133	106appropriate and inappropriate uses of the data;
134	134	107 (5) to the greatest extent possible, provider profiling initiatives shall use standard-based
135	135	108norms derived from widely accepted, provider-developed practice guidelines;
136	136	109 (6) provider profiles and other information that have been compiled regarding provider
137	137	110performance shall be shared with providers under review prior to dissemination; provided,
138	138	111however, that opportunity for corrections and additions of helpful explanatory comments shall be
139	139	112provided prior to publication; and, provided, further, that such profiles shall only include data
140	140	113which reflect care under the control of the provider for whom such profile is prepared;
141	141	114 (7) comparisons among provider profiles shall adjust for patient case-mix and other
142	142	115relevant risk factors and control for provider peer groups, when appropriate;
143	143	116 (8) effective safeguards to protect against the unauthorized use or disclosure of provider
144	144	117profiles shall be developed and implemented;
145	145	118 (9) effective safeguards to protect against the dissemination of inconsistent, incomplete,
146	146	119invalid, inaccurate or subjective profile data shall be developed and implemented; and 7 of 7
147	147	120 (10) the quality and accuracy of provider profiles, data sources and methodologies shall
148	148	121be evaluated regularly.
149	149	122 SECTION 2. Chapter 12C of the General Laws, as so appearing, is hereby amended by
150	150	123inserting after section 8 the following new section:-
151	151	124 8A. Reporting of Hospital Margins
152	152	125 (a) If in any fiscal year, an acute hospital, as defined in this chapter, reports to the center
153	153	126an operating margin that exceeds 3.6 percent, the center shall hold a public hearing within 60
154	154	127days. The acute hospital shall submit testimony on its overall financial condition and the
155	155	128continued need to sustain an operating margin that exceeds 3.6 percent.  The acute hospital shall
156	156	129also submit testimony on efforts the acute hospital is making to advance health care cost
157	157	130containment and health care quality improvement; and whether, and in what proportion to the
158	158	131total operating margin, the acute hospital will dedicate any funds to reducing health care costs.
159	159	132The center shall review such testimony and issue a final report on the results of the hearing.  In
160	160	133implementing the requirements of this Section, the center shall utilize data collected by hospitals
161	161	134pursuant to the requirements of Section 8 of chapter 12C.