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HOUSE DOCKET, NO. 3584 FILED ON: 1/17/2025
HOUSE . . . . . . . . . . . . . . . No. 1398
The Commonwealth of Massachusetts
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PRESENTED BY:
James J. O'Day
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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 hospital profit and fairness.
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PETITION OF:
NAME:DISTRICT/ADDRESS :DATE ADDED:James J. O'Day14th Worcester1/17/2025Samantha Montaño15th Suffolk2/24/2025James B. EldridgeMiddlesex and Worcester3/3/2025Daniel M. Donahue16th Worcester3/7/2025Jay D. Livingstone8th Suffolk3/7/2025Lindsay N. Sabadosa1st Hampshire3/10/2025 1 of 3
HOUSE DOCKET, NO. 3584 FILED ON: 1/17/2025
HOUSE . . . . . . . . . . . . . . . No. 1398
By Representative O'Day of West Boylston, a petition (accompanied by bill, House, No. 1398)
of James J. O'Day and others relative to civil penalties for profits and excessive compensation at
certain publicly funded hospitals. Health Care Financing.
The Commonwealth of Massachusetts
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In the One Hundred and Ninety-Fourth General Court
(2025-2026)
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An Act relative to hospital profit and fairness.
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 111 of the General Laws is hereby amended by inserting after
2section 244 the following section:-
3 Section 245. Hospital Profit and Fairness
4 Definitions
5 (a) As used in this section, the following words shall have the following meanings:-
6 “Facility”, a hospital licensed under section 51 of chapter 111 of the General Laws, the
7teaching hospital of the University of Massachusetts medical school, any licensed private or
8state-owned and state-operated general acute care hospital, an acute psychiatric hospital, an acute
9care specialty hospital, or any acute care unit within a state operated healthcare facility. This
10definition shall not include rehabilitation facilities or long-term care facilities. 2 of 3
11 “Compensation”, salary; bonus payments, whether based on performance or otherwise;
12deferred compensation; incentive payments; severance payments; loans to be repaid on terms,
13including interest, less burdensome than market rate; value of use of facility-provided vehicles,
14housing or other perquisites not available to all employees; stock or stock options and any
15dividends or other incidents of the ownership thereof.
16 "Minimum facility compensation", the value of the annual compensation received by a
17full time employee of a facility earning minimum wage as set under G.L. c. 151 1, or if none,
18then the lowest-paid full time employee.
19 (b) If in any fiscal year a facility that accepts funds from the Commonwealth, and whose
20patient mix is less than 60% government payer, reports to the Center for Health Information and
21Analysis an annual operating margin, including amortization and depreciation, that exceeds 8%,
22that facility shall be subject to a civil penalty equal to the amount by which the annual operating
23margin exceeds 8%.
24 (c) If the chief executive officer of a facility that accepts funds from the Commonwealth
25receives annual compensation greater than 50 times the minimum facility compensation, the
26facility shall be subject to a civil penalty equal to the amount by which the Chief Executive
27Officer's annual compensation exceeds 50 times the value of the minimum facility compensation.
28 (d) Each facility that accepts funds from the Commonwealth shall report annually to the
29Center for Health Information and Analysis all financial assets owned by the facility, including
30those held in financial institutions outside the United States or invested outside the United States.
31Unless prohibited by other law, the Center for Health Information and Analysis shall make this
32information public within 7 calendar days of receipt. 3 of 3
33 (e) There is hereby established on the books of the Commonwealth a fund to be known as
34the Medicaid Reimbursement Enhancement Fund. Any penalties collected as a result of
35violations of this act shall be deposited into this fund, and subject to appropriation, shall be used
36to improve Medicaid reimbursement to eligible hospitals.
37 (f) This act shall not be construed to impair any contract or agreement in effect as of
38January 1, 2025.
39 (g) The Health Policy Commission shall promulgate regulations governing the
40implementation, operation, and enforcement of this act.
41 (h) Severability. The provisions of this act are severable, and if any clause, sentence,
42paragraph or section of this law or an application thereof shall be adjudged by any court of
43competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the
44remainder thereof but shall be confined in its operation to the clause, sentence, paragraph,
45section or application adjudged invalid and such clause, sentence, paragraph, section or
46application shall be reformed and construed so that it would be valid to the maximum extent
47permitted.