Massachusetts remains a leader on the health care cost containment, price transparency, and market regulation fronts. In the 2017 legislative 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. Massachusetts introduced several bills that seek to improve transparency and health care costs; however, most of them failed to pass.
In this current legislative session, Massachusetts has carried over several bills that seek to improve transparency and health care cost.
Massachusetts’ current regular legislative session runs from 1/3/2018 – 1/1/2019.
Recent Legislative Developments
|2017-2018||S.1163 /H.491||AN ACT RELATIVE TO TRANSPARENCY AND ACCESS IN HEALTHCARE: requires that each drug manufacturer that has experience a wholesale acquisition cost increase of 15% or more to file a report of the total costs paid for research and development in the prescription drug’s therapeutic category; estimated costs incurred relating to research and development of new products, processes or services, including the costs of research and development of new products or services that were acquired or obtained via a license; research and development costs as a percentage of revenue; estimated total annual revenues for prescription drugs sold in North America; and if the manufacturer sells or markets in the commonwealth four or more prescription drugs covered or purchased by MassHealth pursuant to chapter 118E, total rebates, discounts or other price concessions paid to the commonwealth for such drugs in the aggregate and without disclosure of any information that is likely to compromise its financial, competitive or proprietary nature.||Active – accompanied by a study order 4/12/18.|
|AN ACT RELATING TO HEALTH CARE COST TRANSPARENCY: The connector shall ensure that the following information about each health benefit plan offered for sale to consumers in the commonwealth shall be available to consumers in a clear and understandable form for use in comparing plans, plan coverage, and plan premiums: (a) The ability to determine whether specific types of specialists are in network and to determine whether a named physician, hospital or other health care provider is in network; (b) Any exclusions from coverage and any restrictions on use or quantity of covered items and services in each category of benefits; (c) A description of how medications will specifically be included in or excluded from the deductible, including a description of out-of-pocket costs that may not apply to the deductible for a medication; (d) The specific dollar amount of any co-pay or percentage coinsurance for each item or service; (e) The ability to determine whether a specific drug is available on formulary, the applicable cost-sharing requirement, whether a specific drug is covered when furnished by a physician or clinic, and any clinical prerequisites or authorization requirements for coverage of a drug; (f) The process for a patient to obtain reversal of a health plan decision where an item or service prescribed or ordered by the treating physician has been denied; and (g) An explanation of the amount of coverage for out of network providers or non- covered services, and any rights of appeal that exist when out of network providers or non-covered services are medically necessary.||Active – Carried over into 2018 legislative session 3/1/18.|
|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.||Active – Carried over into 2018 legislative session 3/1/18.|
|S.627||AN ACT TO PROMOTE PRICE TRANSPARENCY IN PRESCRIPTION DRUG PRICES: The Health Policy Commission, in collaboration with the Center for Health Information and Analysis, shall identify annually up to 15 prescription drugs on which the State spends significant health care dollars and for which the wholesale acquisition cost has increased by 50 percent or more over the past five years or by 15 percent or more over the past 12 months, or is a new drug whose price may have a significant impact on the cost benchmark. For each prescription drug identified pursuant to subsection (b) of this section, the Office of the Attorney General shall require the drug’s manufacturer to provide a justification for the increase in the wholesale acquisition cost of the drug.||Active – Carried over into 2018 legislative session 3/1/18.|
|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.
|Active – Carried over into 2018 legislative session 3/1/18|
|H.1228||AN ACT TO PROMOTE TO TRANSPARENCY AND COST CONTROL OF PHARMACEUTICAL DRUG PRICES: Under this bill, the Health Policy Commission develop a list of critical prescription drugs for which there is a substantial public interest in understanding the development of its pricing. For each prescription drug that the commission places on the critical prescription drug list pursuant to subsection (a), the commission shall require the manufacturers of said prescription drug to report the following information to the commission: i. Total cost of production, and approximate cost of production per dose; ii. Research and development costs of the drug, including: a. research and development costs paid with public funds, including any amount from federal, state, or other governmental programs or any form of subsidies, grants, or other support; b. after-tax research and development costs paid by the manufacturer; c. research and development costs consisting of payments to predecessor entities; d. research and development costs paid by third parties; and e. the costs to acquire the intellectual property rights to a drug, including costs for the purchase of patents, licensing, or acquisition of any corporate entity owning any rights to the drug while in development.||Failed.|
|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.||Failed.|
|S.2202||This bill assembles a 5 regional health policy councils in geographically diverse areas to : (i) identify innovations and best practices in health care within the region; (ii) identify interventions that improve population health at the regional or community level, including social determinants that impact health outcomes; (iii) identify shortages of health care resources in the region; and (iii) facilitate implementation of innovations, best practices and interventions throughout the region. It also provides that health care services delivered by way of telemedicine shall be covered to the same extent as if they were provided via in-person consultation or delivery. The bill Implements a floor for providers, sets a benchmark for hospital spending, and imposes penalties if that amount is exceeded. This bill also creates a task force to investigate the impact to state agencies of joining a non-Medicaid, multi-state prescription drug bulk purchase consortium.||Failed.|
|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.||Failed.|
|S.2108 (formerly 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.||Active – Carried over into 2018 legislative session 3/1/18.|
|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.||Active – Referred to Committee on Health Care Financing 4/2/18.|
|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.||Failed.|
|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.||Failed.|
|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.
|Active – Carried over into 2018 legislative session 3/1/18.|
|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.
|Active –Carried over into 2018 legislative session 3/1/18.|
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.