INSIDE THE ISSUE

> Senate Passes Oversight Bill
> FY25 State Budget
> Blood Culture Bottles
> Steward Bankruptcy
> Capacity Reporting
> Network Outage
> Medical Respite Program
> 340B and PBMs

MONDAY REPORT

State Senate Passes Sweeping Hospital Oversight Bill

The Massachusetts Senate wrapped up debate last Thursday night and voted 38-2 on its redrafted version of its health system oversight proposal, S.2871, An Act enhancing the market review process.

Many of the reforms in both the House and Senate proposals address gaps in the commonwealth’s oversight framework that the Steward Health Care bankruptcy exposed.

During last week’s debate, Senators did not accept many of the 167 amendments filed. The final proposal did, however, include two MHA priority amendments: Amendment 31, filed by Sen. Brendan Crighton (D-Lynn), that requires the Center for Health Information Analysis to periodically report on, and include in its annual report, the information it receives from health insurance companies as well as data available from the Division of Insurance regarding medical expenses, administrative expenses, medical loss ratios, reserves, and surpluses. Amendment 133, filed by Sen. Nick Collins (D-Boston), removes a provision in the bill that would have allowed the Health Policy Commission to assess a civil penalty on healthcare entities that exceed the cost growth benchmark in lieu of requiring them to file a performance improvement plan.

Also adopted were two amendments filed by Sen. John Keenan (D-Quincy). Amendment 114 requires payers to report on drugs with the highest out-of-pocket cost, including information on, but not limited to, coinsurance, copayments, and deductibles. Keenan’s Amendment 119 adds one representative from the Massachusetts Association of Behavioral Health Systems to the prior authorization task force.

As formal legislative business ends on July 31, House and Senate conferees will need to work quickly to reach a compromise on their respective oversight proposals.

Legislature Approves FY2025 State Budget

Last Friday, the Massachusetts House and Senate passed a $58 billion state budget for fiscal year 2025, which began on June 30. The proposal now awaits Governor Maura Healey’s signature.

The FY2025 budget is a $1.97 billion, or 3.5%, increase over the FY2024 budget.

Notably, the House-Senate compromise budget includes Senate President Karen Spilka’s (D-Ashland) priority to make community college free. It also provides free school meals and no-charge bus rides through the state’s 15 regional transit authorities.

Of great importance to the healthcare sector, legislators included in the budget the MHA-Executive Office of Health & Human Services’ revised hospital assessment proposal that increases the tax on hospitals but ultimately results in more federal dollars flowing back to the state in federal Medicaid funding. The new assessment plan is expected to provide an additional $441 million benefit annually. Related, the budget includes separate language to enhance funding for Cambridge Health Alliance, which has access to federal Medicaid funding as a “non-state owned public hospital.” Both the assessment changes and payment directives included in the budget will require approval from the federal Centers for Medicare and Medicaid Services.

Hospitals Brace for Shortage of Blood Culture Bottles

In a blood culture test, a patient’s blood is inoculated into bottles containing culture media to determine whether infection-causing microorganisms are present in the patient’s bloodstream. The tests are the major tools to diagnose bloodstream infections and sepsis and to determine the proper course of antibiotic treatment.

Some Massachusetts hospitals have informed MHA that they are undertaking conservation efforts with the existing culture bottles.

What’s Going on With Steward?

The future of the seven Steward Health Care hospitals in Massachusetts remains up in the air.

Bids were due on the hospitals last Monday, July 15, and an auction between bidders was scheduled for Thursday, July 18. Last week, in a filing with the Texas bankruptcy court overseeing the dissolution of Steward, the beleaguered health system said it was extending the bid deadline for its physician practice – known as Stewardship – but not its hospitals. The new bid deadline for Stewardship is today with an auction scheduled for this Thursday.

As for the hospitals, no definitive news emerged from Steward as to what offers it received.

Last Thursday, U.S. Senator Bernie Sanders (I-Vt.), chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, joined ranking Republican Bill Cassidy, M.D. (R-La.) in announcing that the committee will vote this Thursday to compel Steward CEO Ralph de la Torre to testify before it. The committee wants answers on how the Steward system devolved to the point that it is being broken up and sold.

HELP Committee member Sen. Ed Markey (D-Mass.) said in a statement with Sanders, “Working with private equity forces, Dr. de la Torre became obscenely wealthy by loading up hospitals from Massachusetts to Arizona with billions in debt and sold the land underneath these hospitals to real estate executives who charge unsustainably high rent … That is corporate greed at its most disgusting.”

New Daily Capacity Reporting Requested

The Steward Health Care bankruptcy has resulted in many patients bypassing the system’s facilities to seek care in overcrowded non-Steward hospitals. Since May, the state and hospitals have been increasing regular capacity reporting to see where patients were going and what hospitals are most affected.

The May request from the state asked for capacity numbers to be uploaded once a week. Last week, through an agreement with MHA, hospitals, and DPH, the request is now for reporting each day by 3 p.m., with weekend numbers submitted by 3 p.m. the following Monday. The new data reporting cadence will remain in place through October 1, 2024.

The movement of Steward patients to other local facilities adds yet another factor to a system already struggling with tight capacity constraints.

DPH Commissioner Robbie Goldstein told the Public Health Council last week, as reported by State House News Service, that DPH is having regular check-ins with MHA and its members, and added that provider organizations are “ready to do what is needed to protect healthcare for those caught up in these challenges through no fault of their own.”

Network Outages Disrupt Care

The global network outage that disrupted computer systems across the globe affected healthcare operations in Massachusetts. MHA began coordinating with DPH and the Conference of Boston Teaching Hospitals in the early morning hours last Friday as numerous hospitals were forced to cancel non-emergency care and faced delays in discharging patients.

Across the state, DPH tracked delays in lab ordering and processing, delays in getting prescriptions to pharmacies, and cancelled surgeries and radiology cases, among many other disruptions that further slowed the flow of patients throughout the care continuum.

Hospitals and state government will continue to keep in close contact as the IT glitch, while curable and not the result of a malicious attack, will nonetheless take time to resolve.

EOHHS Developing Homeless Medical Respite Service Program

As part of the recent Center for Medicare and Medicaid Services (CMS) approval of amendments to Massachusetts’ Medicaid waiver, MassHealth is developing a homeless medical respite program to provide a safe space for people experiencing homelessness to recover from their physical illness.

The Executive Office of Health & Human Services (EOHHS) will publish proposed regulations late this summer for MassHealth coverage of medical respite services for individuals experiencing homelessness, with the program anticipated to begin in January 2025. The preliminary plan is to provide a safe space for recovery for up to six months, while assisting individuals in the search for an appropriate long-term housing option.

People experiencing homelessness have high rates of chronic medical conditions and experience multiple barriers to hospital discharge, with the primary obstacle being lack of a safe and appropriate location to recover. Shelters are not ideal locations for discharge because in general they lack private bedrooms and bathrooms; are often not available during the day; do not usually have staff on site to support medical issue resolution or medication reminders; and do not usually have appropriate space for medical service delivery onsite. At the same time, hospitals are facing challenges related to bed capacity. Without the ability to discharge people, hospital beds remain filled, which can lead to patients remaining in emergency rooms beyond the time that they require for emergency services and reducing the number of available beds for new patients requiring hospital-level care.

The new coverage plan will build off a pilot program that has been in place with five homelessness agencies working in coordination with Baystate Health System, Cooley Dickinson Hospital, Mercy Medical Center, Cape Cod Healthcare, Beverly and Salem hospitals, and UMass Memorial Medical Center. Funding for the pilot program ends March 31, 2025.

A Renewed Focus on 340B and PBMs

The Senate’s healthcare oversight bill (see story above) focused on, among other things, increased state oversight of pharmacy benefit managers – a move that the hospital community strongly endorsed.

For-profit PBMs work for insurance companies and other entities to negotiate prices with drug companies. Their role has become especially problematic as it has been shown by numerous sources that the PBMs are incentivized to maximize their own profits, which stands in direct conflict with the objectives of hospitals and clinics participating in the 340B program.

The federal 340B drug discount program requires pharmaceutical manufacturers to sell outpatient drugs at discounted prices to healthcare organizations that care for uninsured and low-income patients. Savings from the 340B program allow eligible hospitals in Massachusetts to support patient services that would normally operate at a loss due to Medicaid and Medicare underpayment

Because the for-profit PBMs lack transparency in their negotiation and rebate practices, they are widely criticized for inflating drug prices to support their own bottom lines. This opacity can obscure how much of the savings and discounts from the 340B program are actually passed on to covered entities, such as hospitals and clinics.

340B drug savings are an integral part of the finances for many hospitals in Massachusetts. For example, Baystate Health uses 340B savings to help support operations at Baystate Medical Center, Baystate Franklin Medical Center, and Baystate Noble Hospital. Specifically, the system uses the 340B savings to, among other things, fund its Pharmacy Discharge Prescription Service, provide clinical services at its community health centers, supply Narcan to first responders, and embed trained pharmacy liaisons at key locations.

Beth Israel Lahey Health uses 340B savings to construct and support the on-site pharmacy at the Bowdoin Street Health Center in Dorchester, which serves one of the most densely populated and diverse urban communities in the state. Integration of the pharmacy and clinical care teams at the health center brings a higher level of care management and engagement with patients to help with medication management and adherence. Distributing prescriptions and instructions in a patient’s preferred language and having pharmacists available on-site that patients feel comfortable with and see as a part of their community opens up opportunities for patients to share things like how a medication made them feel, or for a pharmacist to ask if a patient remembered to take a prescription with food, or knows not to take certain medications at the same time.

Holyoke Medical Center (HMC) has a public payer mix that is greater than 75%. Because of this high percentage, cost saving initiatives such as the 340B program are essential to the institution and the communities it serves. The 340B program helps HMC to continue to provide and expand healthcare to a population that is historically at risk. These services include comprehensive ambulatory pharmacy services, medication management, community navigation, clinics to address substance use and mental health disorders, as well as cancer care.

Read more hospital 340B stories as well as an overview of the 340B Drug Pricing Program at this newly created MHA webpage.

John LoDico, Editor