TL/DR –
A 97-page health care reform bill is advancing in Massachusetts, aimed at controlling costs and transforming regulatory structures. This legislative effort, the most significant in over a decade, includes lessons from the Steward Health Care crisis and changes to how state regulators manage health care spending. The bill includes measures that require hospitals to own the land their facilities are on and notification rules for equipment repossession, as well as stronger reporting requirements, fines for non-compliance, and a shift from a one-year to a three-year cycle for healthcare cost containment.
A New Health Care Reform Bill in Massachusetts
Revolutionizing hospital oversight, a new bill is being advanced in Beacon Hill, representing the most substantial health care cost control legislation in over a decade. The Health Care Financing Committee is pushing a 97-page redrafted proposal that will introduce significant policy changes, following the lessons learned from the Steward Health Care crisis.
The bill will likely reach the House floor for a vote in the coming months. However, its reception in the Senate, which traditionally focuses on reining in prescription drug prices, remains uncertain.
According to House Speaker Ron Mariano, the legislation aims to restore stability and enhance accountability in the healthcare industry. Its ultimate objective is to ensure universal access to quality, affordable health care in Massachusetts. It proposes crucial updates to regulate and monitor the health care market, given the ongoing issues in the sector.
Officials regard this bill as an immense effort to contain health care costs since the enactment of the 2012 law that established the Health Policy Commission, the Center for Health Information and Analysis, and a spending growth benchmark.
The bill also acknowledges that the existing regulatory and analytical structure has been insufficient in limiting cost and spending increases. The financial strain felt by patients is a longstanding issue, predating the public attention drawn to the Steward Health Care crisis this year.
Addressing the Steward Health Care Crisis
The bill suggests proactive changes to prevent similar future problems. Acute care hospitals will be required to own their facilities’ land to acquire state licensure, a direct contrast to Steward’s approach of leasing back hospitals it had sold to Medical Properties Trust. This maneuver has burdened hospitals with financial difficulties. Steward’s hospitals, licensed before April 1, 2024, will be exempt from this requirement.
The bill would also mandate creditors and vendors to notify the Department of Public Health 60 days before repossessing medical or surgical equipment. This is a direct response to the tragic case of Sungida Rashid reported by The Boston Globe.
Hospitals will also need to disclose audited financial statements about their parent organizations, private equity investors, real estate investment trusts, and management services organizations. Fines for failing to comply will increase from $1,000 to $25,000 per violation, with no maximum cap. The bill further empowers the Department of Public Health to reject certain licensure or expansion approval against a system that has failed to submit appropriate financial data to the state.
Other Proposed Reforms
The redrafted legislation will also revamp health care cost containment and management at the state level. It will change the existing one-year benchmark to a three-year cycle. The bill explicitly subjects “payers” such as health insurance plans to Health Policy Commission scrutiny. It will also give the Health Policy Commission more power to instruct entities on cost-cutting measures, rather than leaving the decisions to hospitals.
Moreover, the bill seeks to protect Bay Staters from the loss of services and strengthen smaller community hospitals against larger academic medical centers. It will require any entity seeking to open a surgery center in an area already served by a community hospital to secure the support of the preexisting facility. Also, the Health Policy Commission will be involved in the decision-making process when a hospital or provider plans to shut down an essential service.
While the Health Care Financing Committee gave members until Tuesday evening to consider the proposal, the majority support from representatives is likely to let the bill advance. However, Senate President Karen Spilka’s team is not yet committed to the bill and needs more time for review and feedback.
Over the past few years, legislative leaders have agreed to bills expanding access to mental health care services, protecting reproductive and gender-related care, and boosting insurance coverage of telehealth. Despite these advancements, they have yet to reach a consensus on some top priorities in the health care arena.
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