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MONDAY REPORT

Legislature Passes Market Oversight Bill

Governor Maura Healey has until Thursday to sign (if she hasn’t already) a comprehensive healthcare oversight bill that, among other things, reconfigures the Health Policy Commission (HPC) and places more components of the healthcare system – from private equity investors to pharmacy benefit managers – under its regulatory jurisdiction.

Throughout 2024, competing oversight bills from the House and Senate were debated, then passed, sent to conference committee, revised, and then stalled for months; it appeared oversight and pharmaceutical legislation (see story below) would be scuttled and filed again in the current legislative session that began January 1. But all that changed suddenly on the Friday following Christmas when negotiators announced they had a deal, which legislators voted on and sent to the governor on December 30.

Under An Act Enhancing the Market Review Process, the HPC Commission remains an 11-person body but the appointees must now include a “member with expertise representing hospitals or hospital health systems,” as well as someone “with expertise in healthcare innovation, including pharmaceuticals, biotechnology, or medical devices.” Previously, the governor, attorney general, and auditor each could pick three HPC Commissioners. Now the governor is tasked with picking six, and the AG has three choices. Two of the governor’s choices must be from lists of nominees from the Senate President and Speaker of the House. The other two HPC Commissioners are the Secretary of the Executive Office of Health & Human Services or designee, and the Division of Insurance Commissioner or designee.

The new law expands the scope of the annual HPC Cost Trends Hearings to include an examination of pharmaceutical manufacturing companies and pharmacy benefit managers. Currently, hospitals, health insurers, and ambulatory surgical centers are taxed annually to pay for the HPC operations; under the new law, non-hospital provider organizations (imaging facilities, clinical labs, non-hospital physician practices, etc.) now will be assessed along with pharmaceutical manufacturing companies and pharmacy benefit managers (PBMs). A similar funding structure was also revised for the Center for Health Information and Analysis (CHIA). Penalties for not meeting CHIA’s filing deadlines increase from $1,000 to $25,000 per violation.

The HPC will now have authority to consider the market impact of transactions involving a “significant equity investor;” significant acquisitions, sales, or transfers of assets, including real estate sale lease-back arrangements; and conversions of a provider organization from non-profit to profit. The impact of significant equity investors, healthcare real estate investment trusts, and management services organizations will also be included in the HPC hearings. These and other changes are in direct response to the Steward Health Care bankruptcy debacle.

Also driven by the Steward bankruptcy, the new law prohibits the Department of Public Health (DPH) from issuing a license to establish or maintain an acute care hospital if the main campus of the acute hospital is leased from a healthcare real estate investment trust.

And in recognition of a long-standing call by many stakeholders for the state to assess the current system and plan better for the future, the bill establishes a new Office of Health Resource Planning under the HPC to produce a state health plan as a forecast of anticipated demand, production, supply, and distribution of healthcare resources on a state-wide and regional basis. The office will also conduct focused assessments of supply, distribution, and capacity in relation to projected need of healthcare services.

Rx Bill Caps Insulin and Other Drug Costs

In addition to the market oversight bill (see above), the legislature passed and sent to Governor Healey An Act Relative to Pharmaceutical Access, Costs and Transparency that mandates insurance companies provide coverage for one generic drug and one brand name drug to treat diabetes, asthma, and the two most prevalent heart conditions. The selected generic drug can’t be subject to any cost sharing for the patient, and insulin payments are capped at $25 for a 30-day supply.

In general, the new law if signed by the required January 9 deadline, provides state government additional oversight of the pharmaceutical industry, which the HPC has identified as a main driver of increasing healthcare costs. The Division of Insurance will now be able to license and regulate pharmacy benefit managers (PBMs). CHIA will be able to collect a range of drug cost information from pharmaceutical manufacturers and PBMs.

The law also establishes the Office for Pharmaceutical Policy and Analysis within HPC, which will be tasked with analyzing trends related to pharmaceutical access, affordability, and spending in Massachusetts.

Agency Name Change, Honoring DeMaria, and more …

The Massachusetts legislature in an end-of-the year burst of activity sent Governor Maura Healey 95 bills on December 31, adding to the 27 already pending on her desk. Within the new bills, and in addition to the hospital oversight and pharmacy bills (see above), were the following of interest to the healthcare community.

H. 5063 names the state public health laboratory campus laboratory in Jamaica Plain “The Dr. Alfred DeMaria, Jr. Campus,” in recognition of the former state epidemiologist, chief infectious disease medical officer and assistant commissioner of the Department of Public Health.

S. 3006 renames the Executive Office of Elder Affairs to the Executive Office of Aging and Independence. The legislation also changes language throughout state law, replacing “the elderly” with “older adults.”

S. 2994 increases the list of permissible groups that can establish and maintain a blood bank in Massachusetts by adding “organizations registered as blood establishments with the United States Food and Drug Administration” to the current law.

S. 2970 mandates that insurers provide coverage for the treatment of Down syndrome through “applied behavior analysis services” in addition to the already-covered speech, occupational, and physical therapies.

The deadline for signing the bills varies, with some due for Healey’s signature over the weekend, while other deadlines occur by this week’s end.

All Massachusetts Hospitals Commit to National Health Equity Certification

Massachusetts hospitals have achieved yet another first-in-the-nation recognition regarding health equity – all of the commonwealth’s acute care hospitals have applied to receive The Joint Commission’s (TJC’s) Health Care Equity Certificate. No other state’s entire contingent of hospitals has filed the applications.

In February 2024, all Massachusetts hospitals became the first to achieve TJC’s new healthcare equity accreditation standard, which demonstrated that reducing health disparities is a quality and safety priority for them. The more rigorous Health Care Equity Certification that all Massachusetts hospitals have now voluntarily committed to recognizes organizations that go beyond the basic accreditation requirement and seek to formalize structures, processes, and goals for identifying and addressing health disparities.

Three Massachusetts hospitals/systems are among only 12 hospitals in the U.S. that already have been certified: Southcoast Hospitals Group, Lawrence General Hospital, and Dana-Farber Cancer Institute. The state’s other hospitals are on track to achieve certification in 2025.

The groundbreaking 1115 Medicaid Waiver empowers hospitals to embed health equity efforts at the point of care, make services more accessible for patients, and reduce persistent disparities. The state worked extensively with Massachusetts hospitals to establish concrete health equity goals and establish processes to better understand and care for all patient populations.

John LoDico, Editor