Special to the Independent
The Massachusetts House of Representatives last week passed comprehensive legislation that aims to restore stability to the health care system, bolster accountability within the industry, and control health care spending to ensure that everyone in Massachusetts has access to quality, affordable health care. The bill also includes important updates to how the Commonwealth regulates and monitors the health care market, informed by the Steward Health Care crisis. This legislation is the largest update to health care laws since 2012.
“I am immensely proud to support this landmark healthcare legislation that places health equity as one of our state’s priorities,” said Representative Judith Garcia of Chelsea. “This legislation represents a significant step toward ensuring that every resident of Massachusetts has the opportunity to lead a healthy life. I commend my colleagues in the legislature for their dedication and collaboration on this vital issue, and I look forward to seeing the positive impact this bill will have on the lives of our constituents.”
“This bill is the most significant health care market oversight and cost containment legislation in more than a decade, and is a continuation of the Commonwealth’s long-standing effort to ensure that everyone in Massachusetts has access to quality, affordable health care,” said House Speaker Ronald J. Mariano (D-Quincy).
“This legislation will help stabilize our health care system, and ensure accountability from all stakeholders, as we continue to recover from the aftereffects of the pandemic. By strengthening oversight and making much needed reforms, this legislation will not only steady the industry, but will also help control costs for consumers,” said Representative Aaron Michlewitz (D-Boston), Chair of the House Committee on Ways & Means.
“This legislation looks to the past, present, and future of health care in the Commonwealth. It closes loopholes and shines a light on blind spots that allowed Steward to exploit Massachusetts patients for profit,” said Representative John J. Lawn, Jr. (D-Watertown), House Chair of the Joint Committee on Health Care Financing. “It protects and preserves underpaid community hospitals that are the lifeblood of medicine in the Commonwealth. And it plans for stable and affordable health care growth moving forward. This bill delivers on the House’s commitment, under the visionary leadership of Speaker Mariano, to high-quality, affordable health care for all Massachusetts residents.”
The legislation passed this month continues the House’s commitment to bettering the Commonwealth’s health care system, as was demonstrated during the passage of Massachusetts’ landmark health care reform laws of 2006 and 2012.
Strengthening oversight
To prevent hospitals and other providers from exploiting the same gaps in the state’s regulatory structure that Steward Health Care exposed, the bill passed makes important updates to the Commonwealth’s laws that govern the oversight of hospital systems and other provider organizations. The bill also makes important reforms to prevent acute care hospitals from selling their most valuable asset, their land, to REITs. When Steward sold their hospital properties to Medical Properties Trust (MPT) in 2016 for $1.25 billion, Steward agreed to lease back their former properties from MPT for exorbitant rents, siphoning away important resources and depriving the hospital operations and patients from needed investments. The House bill prohibits the future leasing of land from REITs for the operation of a hospital’s in-patient facilities and requires increased disclosure of other lease arrangements as part of the licensure process with the Department of Public Health (DPH).
Addressing the rising cost of health care
To address the rising cost of health care in Massachusetts, the bill reforms the HPC and the health care cost growth benchmark by establishing a benchmark-setting process that is more responsive to market pressures, while also raising expectations on providers to meet the Commonwealth’s cost containment goals:
• Reconstitutes the HPC board from 11 to nine members who have more current, relevant experience and insight into the trajectory of the healthcare market
• Establishes a Technical Advisory Committee within the HPC to adjust the benchmark based on market conditions, such as inflation, labor and workforce development costs, and the introduction of new pharmaceuticals, medical devices, and other health technologies
• Changes the current annual benchmark to a three-year benchmark beginning 2026-2029 which will allow health care entities greater flexibility to address unexpected expenses, and give the HPC greater insight into longer-term trends
• Gives the HPC increased enforcement authority when a health care entity exceeds the benchmark, and when a first performance improvement plan (PIP) is not successful, by allowing the HPC to suggest elements of a new PIP and to conduct Cost and Market Impact Review (CMIR), which may result in a referral to the Attorney General
The bill also establishes a dedicated Division of Health Insurance (DOHI) to review health insurance rates for affordability for consumers and purchasers of health insurance products. Currently, the same state agency that reviews auto insurance policies reviews health insurance, an insurance product that is essential to the well-being of residents and an important aspect of one of the Commonwealth’s largest economic sectors. This bill raises the assessments on insurance companies to pay for increased staff to give health insurance products the scrutiny they deserve.
Protecting independent community hospitals and slowing further market consolidation
This legislation includes several policies to advance the House’s long-standing policy goal of protecting low-cost, high-value health care providers and of avoiding further market consolidation by larger hospital systems.
The bill passed the House of Representatives with a 152-1 vote. It now goes to the Senate for consideration.