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MONDAY REPORT

New Substance Use Disorder Bill Will Make a Difference

The Massachusetts House and Senate last Thursday passed a compromise substance use disorder (SUD) bill, sending it to Governor Healey, who is expected to sign it.

Negotiations over the sweeping law – An Act Relative to Treatments and Coverage for Substance Use Disorder and Recovery Coach Licensure – had been in the works for months and the end-of-the-session passage of it was a welcome development.

The legislation includes an important provision that MHA and the hospital community had strongly advocated for; it mandates that health insurance companies provide coverage and reimbursement of naloxone that is prescribed or ordered as a medical benefit when dispensed by a healthcare facility, or as a pharmacy benefit dispensed by a pharmacist. The provision ensures that hospitals have the resources to discharge patients with naloxone in hand, as is best practice. Currently, many hospitals have pursued grants and philanthropy to keep stocks of naloxone on hand.

“Substance use disorder touches virtually every family and neighborhood in Massachusetts, and this legislation has the power to do the same,” said MHA’s Senior Director of Healthcare Policy Leigh Simons. “It connects patients with many of the resources they need, including lifesaving medications, protections that can further reduce stigma and break down barriers to care, and recovery coaches that are there for them every step of the way. MHA and our members applaud the legislature for keeping this critical public health issue front-and-center, and for making these strides possible on behalf of patients and caregivers across the commonwealth.”

The bill also modifies mandated reporting requirements regarding newborns whose birthing parents are taking prescribed medications for opioid use disorder. Currently, many hospitals encountering substance-exposed newborns make an automatic referral to the Department of Children and Families. Other hospitals have begun interpreting the law differently over the past year, making such a referral only when the child is dependent upon a non-prescribed drug at birth. Now, state agencies will draw up new regulations regarding such “51A” reporting. For pregnant and birthing persons who appropriately take methadone and buprenorphine for their substance use disorder, these changes will reduce the fear of losing custody of their child for taking their practitioner-directed medication.

Among other things, the prospective law, beginning on July 1, 2025, would require care facilities to prescribe or dispense at least two doses of naloxone at discharge to patients with a history of overdose; it establishes recovery coach licensure at the Department of Public Health as well as reimbursement of recovery coach services; and prohibits life insurance companies from placing limits on or refusing to cover individuals solely because they obtained naloxone for themselves or others.

Hospital Finances: An Important Primer

As the calendar year comes to a close, numerous health systems issuing their end-of-the-year financial disclosures are expected to report massive losses. Meanwhile, the public, policymakers, and media members are once again confronted with the important task of accurately interpreting intricate healthcare finance data.

Among the main measures hospital and health systems disclose are “total” margins and “operating” margins. As the state’s Center for Health Information & Analysis reports, quarterly, “unrealized” or “paper” gains make up the lion’s share of total margins. That is, a hospital’s total margin will increase during bull markets such as the U.S. has experienced in 2024 and is therefore not the best barometer of an institution’s financial health.

Operating margins, on the other hand, track the actual money hospitals take in for the care they provide against the cost of that care. As CHIA’s latest report of hospital financials showed, more than half of the hospitals in the state are operating in the negative and two-thirds of hospital health systems are consistently losing money on their operations. The median operating margin for hospitals stood at negative -0.9% through June of this year.

As an analogy, an individual’s 401K could increase dramatically over the course of a year. That’s the total margin. But that person’s utility costs, food costs, price of gasoline, etc., could increase while their income remains stagnant. That’s operating cost. In this example, the individual’s total margin looks good, but their operating margin is driving them into debt.

The accurate use of these metrics goes beyond just semantics; it is essential for the education of policymakers and other healthcare stakeholders as they decide how to devote resources and meet the needs of patients.

“Facts are facts,” said Steve Walsh, the president & CEO of MHA. “Right now, our system is hemorrhaging money with little end in sight. About 2,000-plus patients are stuck in acute care hospitals unable to transition to the next level of care they need. Hospitals are spending more than $400 million each year to provide extra, unpaid care to patients as they await discharge to a post-acute setting. We have 300-plus behavioral health patients boarding in EDs. Labor accounts for more than 60% of hospitals’ operating costs, and our current shortage of 15,000-plus healthcare workers in Massachusetts is driving up costs to recruit and retain talented, in-demand personnel. And those costs are just the tip of the iceberg.”

Walsh spelled out the details behind the current healthcare crisis in this recent CommonWealth Beacon opinion piece.

MHA and the hospital community have stated at legislative hearings, community gatherings, press interviews, and many other forums that the resolution to the growing healthcare-wide crisis requires thoughtful, all-hands-on-deck cooperation.

“That starts with understanding the basic ledger sheet components of the problem,” Walsh said. “And those numbers are painting a clear picture: hospitals are struggling mightily. That’s the current, etched-in-stone facts of the Massachusetts healthcare system from the largest academic medical centers to the smallest community hospital.”

Government Shutdown Avoided, Health Flexibilities Extended Briefly

The last-minute Congressional efforts to pass a continuing resolution bill to keep the government operating resulted in a slimmed-down package that contains healthcare items of significant interest.

The House passed the stopgap bill on Friday by a vote of 366-34, and the Senate followed with an 85-11 vote early Saturday morning. President Biden signed the bill later on Saturday.

The final legislation includes a short-term extension of telehealth and hospital-at-home programs only through March 31, 2025. The American Hospital Association reported that scheduled cuts to Medicaid Disproportionate Share Hospitals were once again forestalled, but only to April 1. Those cuts, if implemented, would have totaled $8 billion.

The initial bipartisan House bill contained a two-year extension of Medicare telehealth flexibilities, a five-year re-authorization of the acute Hospital at Home program, and a two-year delay of the scheduled DSH cuts. But as has been well reported, that deal fell apart at the urging of President-elect Trump and Twitter/X owner Elon Musk.

An item that was removed between the initial agreement and what ultimately passed would have more strongly regulated pharmacy benefit managers. The initial pact also would have halted a scheduled Medicare physician payment cut. With that provision stripped out of the final deal, physicians will face a 2.8% payment reduction on January 1.

Happy Holidays! Happy New Year!

What a year!

From the bankruptcy of the Steward system to its rescue by three trusted buyers with state assistance, from Change Healthcare cyberattacks to hurricanes disrupting the supply chain and more, the healthcare system was buffeted but endured.

This is the year that Massachusetts became the first U.S. state in which all hospitals took the meaningful step to close health disparities by meeting The Joint Commission’s new healthcare equity accreditation standard. It was also the year in which the legislature passed and the governor signed important bills relating to maternal health, substance use disorder, the Nurse Licensure Compact, graduate nurse practice, and a hospital assessment to maximize Medicaid funding for hospitals, among many other positive, law-making developments.

As the year ended, hospitals and health systems were struggling mightily to keep their doors open and their service lines operating. But whatever they faced, they met the moment as this MHA holiday message to you shows.

MHA wishes you and yours a healthy and happy new year. Monday Report is taking a holiday break and will return January 6.

John LoDico, Editor