Big goals attached to health care bill
BOSTON — Representatives were near-unanimous Thursday in their support of a major hospital sector oversight and health care reform bill that directs tens of millions of dollars in supplemental aid to strained community hospitals and aims to control spending "to ensure that everyone in Massachusetts has access to quality, affordable health care."
The House voted 152-1 to approve a bill that combines reforms intended to avert a repeat of the Steward Health Care crisis with changes designed to boost state oversight of facility expansions and closures, refine cost control tools to better account for fluctuations, and increase funding for hospitals that typically serve high shares of low-income patients and people of color.
Rep. John Lawn, the chamber's top health care deputy, said the more than 100-page proposal (H 4643) "is not just about Steward" and reaches across pressure points that erupted after the COVID-19 pandemic rewired the industry.
"As our health care system attempts to recover from COVID, the health care landscape is rapidly shifting," Lawn said while introducing the bill. "New partnerships, disruptive entrants into the marketplace, and private equity investment that is soaring in every aspect of care — this legislation aims to stabilize that system."
The House's Steward-related reforms focus on preventing a similar situation from unfolding in the future rather than responding directly to the current upheaval, which is now playing out in bankruptcy court.
"I think it goes a long way to stopping any repetition of what Steward did," House Speaker Ron Mariano told reporters Wednesday, before his chamber took up the bill. "The fact that we could never get out the information of what Steward was doing, the money they made, because they never reported it ... You won't get a license if you're not willing to comply with the regulations, and we double the fines, because the fines are a drop in the bucket to them."
He continued, "We've made it as difficult as possible for an outside financier to come in and not report everything, open up their books ... We really tried to tighten that up as much as we could."
Hospitals would face steeper penalties and licensure consequences for failing to disclose financial information to regulators. Lessors would need to give the state 60 days notice before repossessing any medical equipment or supplies, a provision inspired by a Boston Globe story about a woman who died after Steward doctors could not use an embolism coil to treat her internal bleeding because it had been repossessed due to unpaid bills. And the attorney general's office would gain more investigative authority to examine health care transactions that involve private equity or real estate investment trusts.
House Democrats backed away from their original push to require all hospitals to own their property. Under the redraft, hospitals would instead be barred specifically from leasing the property of their main campuses from real estate investment trusts, like Steward did with Medical Properties Trust, which now serves as the system's de facto landlord.
Other leases with entities that are not real estate investment trusts would be allowed. The bill also exempts facilities with existing real estate investment trust lease agreements, so the new requirements would not apply to the Steward hospitals.
"We didn't take it out entirely, it's still — the main campus of the hospital has to be owned by the corporation. What we found in doing this is that there are a lot of good actors, including medical schools which are often on land owned by the university," Mariano said. "So there were so many exemptions to this that we just said, 'You have to be headquartered on the land that you own.' Because, obviously, the guys who are getting the money from the lease land sale were the executives in the corporation, not the guys from the hospital."
The bill weaves together many priorities for Mariano, who has long been involved in health care policy. Lawn began his introduction to the bill by telling Mariano, "Mr. Speaker, for three decades, you've been a leader in the House on health policy."
As is often the case, the House chamber fell into a lengthy lull after Lawn's opening remarks, ostensibly while deliberations about amendments took place outside of public view. Once proceedings started back up again, Mariano himself wielded the gavel at the rostrum — a rarity for any speaker and likely an indication of his personal investment in the issue.
Reaching beyond Steward, the bill takes aim at pressure points about which industry leaders and patient advocates have long warned, like financial challenges facing community hospitals and limited regulatory power over facility closures.
Representatives made a major change on the floor, approving an amendment from Rep. Frank Moran of Lawrence that would steer much-needed cash to some of the state's most vulnerable hospitals.
The amendment would provide a 5% MassHealth rate enhancement to certain facilities that serve high shares of public payers and receive comparably low reimbursements, like Lawrence General Hospital, for two years.
Those combined supplements could not surpass $35 million per year. The bill does not appropriate new funding, and so MassHealth would need to find money from its existing allocation in the first year, according to a Mariano aide.
"Every day, nonprofit hospitals such as Lawrence General Hospital are going above and beyond to provide patients with top-tier medical care," Moran, a member of Mariano's leadership team, said. "These hospitals oftentimes serve some of our state's most vulnerable residents but are reimbursed at lower rates than their private, commercial peers."
The new funding, Moran said, would "bridge this gap."
Under the bill, MassHealth — which combines the state's Medicaid and Children's Health Insurance Program under one umbrella — would be instructed to seek as much federal reimbursement as possible to cover the rate enhancements for vulnerable hospitals, but it's not clear how much of the money could eventually come from Washington, D.C.
Beacon Hill approved a similar enhanced rate program in 2021, early in the COVID-19 pandemic.
The bill would also overhaul the costcontainment approach laid out in a 2012 law, which created the Health Policy Commission, Center for Health Information
Analysis and an annual benchmark that represents the goal for reasonable health care spending growth.
Under the bill, the one-year benchmark would shift into a three-year benchmark, which Lawn said would "capture trends and account for temporary, but significant, impacts on spending such as a pandemic or costs of unforeseen events."
"Even though we as a Legislature have supported this industry with over $750 million, we know it is still fragile and needs time to stabilize," Lawn said. "This benchmark will give them the time to do this."
One significant part of the bill would spin out a new Division of Health Insurance from the existing Division of Insurance, which oversees health, auto, life and other policies under one umbrella.
Lawn said the new office will examine rates submitted by health plans and will assess if they "meet standards of affordability for consumers and employers" before approving them.
Even before the Steward crisis stumbled into public view this year, almost every facet of the health care world has been sounding the alarm about growing pressures, often pointing fingers at other industry segments.
Total health care spending across Massachusetts rose to $71.7 billion in 2022, according to the Center for Health Information and Analysis. That's more than $15 billion more than the annual state budget Gov. Maura Healey signed last year.
In a statement provided by Mariano's office, Attorney General Andrea Campbell said Thursday that the House's bill incorporated "many proposals from my office such as strengthening our consumer protection enforcement tools and making it easier to use our authority to hold private equity owners accountable."
"Importantly, this legislation addresses systemic vulnerabilities brought to light by the Steward Health Care crisis to help ensure that such a crisis does not happen again," Campbell said.
The bill heads to the Senate, where top Democrats have voiced an interest in applying lessons learned from the Steward crisis and strengthening the HPC but have laid out no specific plans.