Massachusetts remains a leader on the health care cost containment, price transparency, and market regulation fronts. In the most recent term, Massachusetts legislation aimed primarily at health insurance rate equity, pharmaceutical company drug development cost transparency, free access to the state’s ACPD, and hospital market regulation.
In regard to cost containment, three Massachusetts bills seek to prohibit health insurance carriers from contracting with providers to reimburse them more or less than pre-determined, geographically-based amounts. In terms of price transparency, Massachusetts seeks to promote transparency and control pharmaceutical drug prices by allowing the HPC to cap pharmaceutical prices it deems are “significantly high” and to require drug manufacturers to disclose development cost information for certain “critical” drugs. Massachusetts legislation also aims to improve price transparency by requiring health care providers to eliminate the user fees associated with its ACPD and by requiring private health payers for small or large group health plans to provide certain plan information on their websites.
Massachusetts also has extensive health care market bills this term. Proposed legislation would require the HPC to identify health care providers that have dominant market shares and would seek to strengthen competition and unfair practice legislation. Currently proposed regulations would also set standards for identifying acute hospitals that are in danger of closing, create processes for receivership of such hospitals, allow the HPC to receive a one-time surcharge assessment fee from surcharge payers, and would limit the changes a provider could make to its operations/governance structure in certain situations.
Massachusetts’ current regular legislative session runs from 1/4/2017 – 1/3/2018 (est.).
Recent Legislative Developments
|AN ACT REDUCING HEALTH CARE COSTS THROUGH IMPROVED MEDICATION MANAGEMENT: would develop a “step therapy protocol” which would be a protocol or program that establishes the specific sequence in which prescription drugs for a specified medical condition and medically appropriate for a particular patient and are covered as a pharmacy or medical benefit by a carrier, including self-administered and physician-administered drugs. (b) Any policy, contract, agreement, plan or certificate of insurance issued, delivered or renewed within the commonwealth that provides coverage for prescription drugs and uses step-therapy protocols shall have the following requirements and restrictions: (1) Clinical review criteria used to establish step therapy protocols shall be based on clinical practice guidelines that: (A) That recommend drugs be taken in the specific sequence required by the step therapy protocol. (B) Are developed and endorsed by a multidisciplinary panel of experts that manages conflicts of interest among the members of the writing and review groups by: (i) Requiring members to disclose any potential conflict of interests with entities, including insurers, health plans, and pharmaceutical manufacturers and recluse themselves of voting if they have a conflict of interest. (ii) Using a methodologist to work with writing groups to provide objectivity in data analysis and ranking of evidence through the preparation of evidence tables and facilitating consensus. (iii) Offering opportunities for public review and comments. (C) Are based on high quality studies, research, and medical practice. (D) Are created by an explicit and transparent process that: (i) Minimizes biases and conflicts of interest; (ii) Explains the relationship between treatment options and outcomes; (iii) Rates the quality of the evidence supporting recommendations; and (iv) Considers relevant patient subgroups and preferences. (E) Are continually updated through a review of new evidence, research and newly developed treatments.
|Referred to the Committee on Financial Services– 1/23/2017|
|S.578||AN ACT RELATIVE TO NOTICE REQUIREMENTS FOR INSURANCE PREMIUM CHANGES AND INSURANCE COVERAGE CHANGES: would require an insurer to provide to the first named insured at the mailing address shown on the policy, and to the insurance producer of the record, written notice of any premium increase in excess of 15% and also provide the exact renewal premium, at least 45 days prior to the written expiration date of the policy unless the premium increase is the result of an audit or the increase is the result of an increase in exposure at the request of the insured. No less than 45 days written notice shall be required for any coverage elimination, reduction, diminution or increased deductible not at the request of the insured and in this case the notice shall itemize and describe the coverage changes and shall be separate from the renewal policy.||Hearing scheduled for 6/13/2017. — 6/7/2017|
|H.609||AN ACT TO IMPROVE HEALTH CARE COST ACCOUNTABILITY: would require that the commission every year, hold public hearings based on the report submitted by the center for health information and analysis comparing the growth in total health care expenditures to the health care growth benchmark for the previous calendar year. The hearings shall examine health care provider, provider organization, and private and public health care payer costs, prices, weighted average payer rates, and cost trends, with particular attention to factors that contribute to cost growth within the commonwealth’s health care system.
This would include providers and provider organizations, testimony concerning payment systems, care delivery models, payer mix, cost structures, administrative and labor costs, capital and technology cost, adequacy of public payer reimbursement levels, reserve levels, utilization trends, relative price, weighted average payer rate, quality improvement and care-coordination strategies, investments in health information technology, the relation of private payer reimbursement levels to public payer reimbursements for similar services, efforts to improve the efficiency of the delivery system, efforts to reduce the inappropriate or duplicative use of technology and the impact of price transparency on prices.
|Hearing scheduled for 6/6/17– 5/23/17.|
|H.2444||AN ACT RELATIVE TO TRANSPARENT HEALTH CARE DATA: would require the Center for Health Information and Analysis website to provide updated information on a regular basis regarding comparative quality, price and cost information. To the extent possible, the website would include: (1) comparative price and cost information for the most common referral or prescribed services, as categorized by payer and listed by facility, provider, and provider organization or other groupings, (2) comparative quality information from the standard quality measure available by facility, provider, provider organization or any other provider grouping, for each such service or category of service for which comparative price and cost information is provided; (3) general information related to each service or category of service for which comparative information is provided; (4) comparative quality information from the standard quality measure available by facility, provider, provider organization or other groupings that is not service-specific, including information related to patient safety and satisfaction; (5) data concerning healthcare-associated infections and serious reportable events reported; (6) definitions of common health insurance and medical terms so that consumers may compare health coverage and understand the terms of their coverage; (7) a list of health care provider types (8) factors consumers should consider when choosing an insurance product or provider group, including provider network, premium, cost-sharing, covered services, and tiering; (9) patient decision aids, which are interactive, written or audio-visual tools that provide a balanced presentation of the condition and treatment or screening options, benefits and harms, with attention to the patient’s preferences and values which may facilitate conversations between patients and their health care providers about preference-sensitive conditions or diseases,(10) a list of provider services that are physically and programmatically accessible for people with disabilities; and (11) descriptions of standard quality measures, as determined by the statewide quality advisory committee and verified by the center.||Referred to Committee on Public Health- 1/23/2017.|
|H.3829||AN ACT PROMOTING AFFORDABLE HEALTH CARE OPTIONS: would require the Center for Health Information and Analysis, in consultation with the office of Health and Human Services to develop an appropriate approach to reporting health care prices and related information for consumers, employers, and other interested parties. The center would establish a list of the most common procedures and require private and public health care payers to submit payment rates for such procedures and services and other necessary information for the center to determinate the rate for every provider with which the payer has contracted or has a compensation arrangement. The center would make such prices and related information publicly available.||Referred to the Committee on Health Care Financing- 7/19/2017.|
|SD.2250||AN ACT RELATIVE TO CONSUMER PROTECTION FOR PRESCRIPTION DRUG PRICES: would require pharmacies to post a notice to consumers informing them that at the point of sale they may request current pharmacy retail price (the amount a person would pay for the medication if the if without using a health benefit plan) for each prescription medication that the consumer intends to purchase. If a pharmacist, or person acting at the direction of a pharmacist, determines that the cost-sharing for a prescription medication exceeds the current pharmacy retail price, they shall notify the customer of the pharmacy retail price and the difference between it and the consumer’s cost sharing. Lastly, it would require a pharmacist, absent to the direction of the customer to the contrary, to charge a customer the applicable cost-sharing or the current pharmacy retail price for that prescription medication, whichever is less.||Referred to the Committee on Health Care and Financing– 6/29/2017|
|S. 542||AN ACT TO MAKE OUT-OF-POCKET EXPENSES FOR PRESCRIPTION DRUG COVERAGE MORE AFFORDABLE: would prohibit any policy, contract, agreement, plan or certificate of insurance delivered, renewed, amended or continued that provides coverage for prescriptions to 1)impose any cost-sharing that exceeds $130 per 30 day supply for a covered prescription, or 2) place all drugs in a given class on the highest cost-sharing tier in a tiered formulary.||Referred to the Committee on Financial Services- 1/23/2017.|
|AN ACT TO REDUCE HEALTHCARE COSTS BY PROMOTING NON-BIASED PRESCRIBER EDUCATION: would implement and promote an evidence-based outreach and education program about the therapeutic and cost-effective utilization of prescription drugs for physicians, pharmacists and other health care professionals authorized to prescribe and dispense prescription drugs. In developing the program, the department shall consult with physicians, pharmacists, private insurers, hospitals, pharmacy benefit managers, and the MassHealth drug utilization review board.||Referred to the Committee on Public Health– 1/23/17|
|AN ACT TO ENSURE EFFECTIVE HEALTH COST CONTROL: would require the Center for Health Information and Analysis to monitor, review, and evaluate reports related to single payer health care; provided, however, that the center shall also monitor the performance of single payer health care systems in other states and countries. It would establish a “single payer benchmark” that is an estimate of the total cost of providing health care to all residents of Massachusetts under a single payer health care system during the previous year, provided that the single payer health care system offers continuous, comprehensive, affordable coverage for all Massachusetts residents regardless of income, assets, health status, or availability of other health coverage. The center, in conjunction with the Health Policy Commission, would include in its annual report, a comparison of the “single payer benchmark” with the actual health care spending in the state for the previous year, indicating whether the state would have saved money while expanding access to care under a single payer health care system.
If at the outset of fiscal year 2018, the board determines that the single payer benchmark, as calculated by the Center, has outperformed the actual total health care spending and spending growth in the state, the Health Policy commission would (no later than June 30, 2019) submit a “Single Payer Health Care Implementation Plan” to the legislature for consideration. The Implementation Plan will be developed after holding public hearings and meetings across the state, and will consist of legislation to implement a single payer health care system for Massachusetts, and that offers continuous, comprehensive, affordable coverage for all Massachusetts residents regardless of income, assets, health status, or availability of other health coverage.
|Hearing scheduled for 6/20/17– 6/12/2017.|
|S.638||AN ACT ESTABLISHING A PUBLIC HEALTH OPTION: would provide for the offering a public health benefits plan – the public health insurance option – to eligible individuals and groups, to ensure choice, competition, and stability of affordable, high quality coverage throughout Massachusetts.
The Connector Board would establish payment rates for the Public Health Insurance Option for services and providers based on parts A and B of Medicare. The Commonwealth Connector Board may determine the extent to which adjustments to base Medicare payment rates would be made in order to fairly reimburse providers and medical goods and device makers, as well as to maintain a strong provider network. Health care providers (including physicians and hospitals) participating in Medicare are participating providers in the public option unless they opt out through a process to be established by the Commonwealth Connector.
|Hearing scheduled for 6/20/17- 6/12/17|
We compile state statutes relate to healthcare price and competition, including healthcare transparency, markets, and costs. For a complete listing of all health related statutes visit the State Health Practice Database for Research.
- In, 2012, Massachusetts passed the landmark health care cost-containment law, L. Ch. 224, codified Mass. Gen. L. Ch. 6D: “An Act Improving the Quality of Health Care and Reducing Costs through Increased Transparency, Efficiency, and Innovation” The Act established the Health Policy Commission (HPC), a new state agency, tasked with advancing the following goals of the new law:
- Fostering reforms to the health care payment system that aim to reward quality care, improve health outcomes, and more efficiently spend health care dollars;
- Promoting innovative delivery models that will enhance care coordination, advance integration of behavioral and physical health services, and encourage effective patient-centered care;
- Investing in community hospitals and other providers to support the transition to new payment methods and care delivery models;
- Increasing the transparency of provider organizations and assessing the impact of health care market changes on the cost, quality, and access of health care services in Massachusetts;
- Analyzing and reporting of cost trends through data examination and an annual public hearing process to provide accountability of the health care cost-containment goals set forth in Chapter 224;
- Enhancing accountability through the implementation of performance-improvement plans for certain providers and payers that threaten the ability of the state to meet the cost growth benchmark;
- Evaluating the prevalence and performance of initiatives aimed at health system transformation;
- Engaging consumers and businesses on health care cost and quality initiatives; and
- Partnering with a wide range of stakeholders to promote informed dialogue, recommend evidence-based policies, and identify collaborative solutions.
- Gen. L. Ch.12C, §§ 10 through 12 provides broad authority for the Center for Health Information & Analysis (CHIA) to collect information from private and public health care payers, including third-party administrators. CHIA works with the HPC to maintain the state’s All-Payer Claims Database, and to issue other reports and publications in line with its stated mission: “to monitor the Massachusetts health care system and to provide reliable information and meaningful analysis for those seeking to improve health care quality, affordability, access, and outcomes.”
- Gen. L. Ch. 12C, §§ 8 through 9 requires providers to report revenues, charges, costs, prices, and utilization of health care services uniformly as required by CHIA. The Center will collect and analyze such data and publish annual reports on its website, available here. Data submission and reporting regulations promulgated by CHIA are available here.
- Gen. L. Ch. 12C, § 16 directs CHIA to publish an annual report concerning health care provider and public and private payer costs and cost rends relative to market power reviews and relative to quality data.
- Gen. L. Ch. 12C, § 18 directs CHIA to perform an ongoing analysis of the payer and provider data collected under the same chapter to determine which organizations are experiencing an excessive increase in health status adjusted total medical expense such that it threatens the ability of the state to meet the health care growth benchmark under the healthcare cost-containment law (see Ch. 6D above). Organizations identified by CHIA are referred to the Health Policy Commission, who shall establish procedures to the assist the health care entity to improve efficiency and reduce cost growth by requiring them to file and implement a performance improvement plan.
- Gen. L. Ch. 1760, § 27, as part of the chapter on “Health Insurance Consumer Protections, requires that the state’s division of insurance “develop a common summary of payments form to be used by all health care payers in the commonwealth that is provided to health care consumers with respect to provider claims submitted to a payer and written in an easily readable and understandable format showing the consumer’s responsibility, if any, for payment of any portion of a health care provider claim.”
- Gen. L. Ch. 176J, § 15 requires that any insurer offering a tiered network plan clearly and conspicuously indicate the cost-sharing differences for enrollers in the various tiers on all promotional and agreement materials.
- Gen. L. Ch. 93, §§ 1 through 14A, the “Massachusetts Antitrust Act,” prohibits unreasonable restraints of trade and monopolistic practices.
- Gen. L. Ch. 93A, §§ 1 through 11 prohibits unfair or deceptive acts or practices in the conduct of any trade or commerce.
- Gen. L. Ch. 176D prohibits unfair or deceptive acts or practices in the provision of insurance.
- Gen. Law. Ch. 176G, § 9 applies trade regulation respecting antitrust and unfair business practices to the ownership, organization, operation and health care services provided by a health maintenance organization (HMO).
- Gen. Law. Ch. 176G, § 27 prohibits a person from acquiring an ownership interest and right to control an HMO unless such person has filed with the commissioner and obtained approval for the transaction. The commissioner will approve or disapprove a merger or acquisition on the basis of whether, among other factors, the effect of the merger or other acquisition of control would be substantially to lessen competition in the health care insurance market or tend to create a monopoly in the state.
- Gen. L. Ch. 176J, § 12 permits small business group purchasing cooperatives for health insurance. Rates offered by insurance carriers to a certified group purchasing cooperative are regulated under this section. CHIA is directed to report to the legislature on the cost savings of purchasing cooperatives on the qualified association members and the effect of such cooperatives on the risk pool and premium costs in the merged market.
- Gen. Law. Ch. 111, § 25C, Massachusetts’ Determination of Needs program, was established by the Legislature in 1971 to encourage equitable geographic and socioeconomic access to health care services, help maintain standards of quality, and constrain overall health care costs by eliminating duplication of expensive technologies, facilities and services.
- Gen. L. Ch. 176O, § 9A prohibits carriers from entering into contracts that limit tiered networks or guarantee a provider’s participation.
FY 2018 Budget
Massachusetts is funded on a fiscal year basis. The 2018 fiscal year runs from July 1, 2017 through June 30, 2018. The Governor is expected to sign the new budget at the end of June, 2018. To view Massachusetts’ FY 2018 Budget, click here.
- Southcoast Hospitals Group sued a rival hospital chain Steward St. Anne’s and the state health agency in October 2015 in Suffolk County superior court, seeking to stop the competitor from opening a cardiac service and alleging that the move was made possible by the improper influence of a former health official. The case centers on a 2014 Mass. Dept. of Health Circular providing an exception for ACOs, allowing them to transfer licenses to provide cardiac care which were otherwise subject to a moratorium. Read the Boston Globe article and the complaint. The lawsuit was dismissed in March 2016.
- On Jan. 30, 2015, Suffolk Superior Court Judge Sanders declined to enter the consent judgment reflecting the deal negotiated between former Massachusetts Attorney General Martha Coakley and Partners Healthcare. The decision comes three days after newly elected Attorney General Maura Healey filed a Notice of her office’s position on the deal. That Notice raised concerns over the deal’s terms, and indicated that if the court rejected the consent judgment, the A.G.’s office would void its agreement with Partners and litigate to enjoin Partners’ proposed acquisition of South Shore Hospital, and would take more time to further evaluate the potential acquisition of Hallmark Hospital. In declining to enter the judgment, Judge Sanders expressed concerns about the provider’s market power, and both the inadequacy and difficulty of enforcing the remedies proposed by the parties. The agreement between former A.G. Coakley and Partners was the result of five years of investigation and negotiation. The proposed agreement received substantial criticism from antitrust experts and others who warned it would have anti-competitive effects. Please see Executive Editor Jaime King’s post on Partners on The Source Blog.
- On September 25, 2014, the Massachusetts Attorney General’s Office, under the direction of then A.G. Martha Coakley, announced that it had filed a revised consent judgment to its previously announced June settlement with Partners Healthcare regarding the proposed acquisition of South Shore Hospital it had claimed would “alter [the] provider’s negotiating power, restrict growth and health costs.” The new deal would impose stricter conditions including price caps and rules regarding access to certain hospital services.