Session Laws

Whereas, The deferred operation of this act would tend to defeat its purpose, which is to immediately provide for the establishment of hospital rates and charges, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Chapter 6A of the General Laws is hereby amended by striking out section 31, as appearing in the 1984 Official Edition, and inserting in place thereof the following section:-

Section 31. As used in sections thirty-two to seventy-five A, inclusive, the following words shall, unless the context clearly requires otherwise, have the following meanings:-

"Acute hospital", any hospital licensed under section fifty-one of chapter one hundred and eleven, and the teaching hospital of the University of Massachusetts Medical School, which contains a majority of medical-surgical, pediatric, obstetric, and maternity beds as defined by the department of public health.

"Approved gross inpatient service revenues", for any fiscal year shall be the total approved gross patient service revenues as defined in this chapter less actual gross outpatient service revenues for that year.

"Bad debt", an account receivable based on services furnished to any patient which (i) is regarded as uncollectible, following reasonable collection efforts, (ii) is charged as a credit loss, (iii) is not the obligation of any governmental unit or of the federal government or any agency thereof, and (iv) is not free care.

"Basis of payment", the total reimbursable costs included in the basis upon which Blue Cross payments are calculated pursuant to any hospital agreement.

"Board", the rate setting commission hospital policy review board established under section thirty-four A.

"Case mix", the description and categorization of a hospital's patient population according to relevant criteria approved by the commission such as: primary and secondary diagnoses, primary and secondary procedures, illness severity, patient age, and source of payment.

"Case mix adjusted discharges", the sum of the cost weights of each discharge as stipulated in the current hospital agreement.

"Charge", the amount to be billed or charged by a hospital for each specific service within a revenue center.

"Commission", the rate setting commission established under section thirty-two.

"Community health centers", health centers operating in conformance with the requirements of section 330 of United States Public Law 95-626, as most recently amended by Public Law 97-35, and shall include all community health centers which file cost reports as requested by the commission.

"Disproportionate share hospital", any acute hospital that exhibits a payor mix where a minimum of sixty-eight per cent of the acute hospital's gross patient service revenue was attributable to Title XVIII and Title XIX of the federal Social Security Act and local and state government subsidy and free care and bad debt.

"Eligible person", a person who qualifies for financial assistance from a governmental unit in meeting all or part of the cost of general health supplies, care, social, rehabilitative or educational services and accommodations.

"Free care", a revenue deduction associated with the provision of services to patients who have reasonably been deemed financially unable to pay, in whole or in part, for their care.

"General health supplies, care, social, rehabilitative or educational services and accommodations", all supplies, care and services of medical, optometric, dental, surgical, podiatric, psychiatric, therapeutic, diagnostic, rehabilitative, education, supportive or geriatric nature, including in-patient and out-patient hospital care and services, and accommodations in hospitals, sanatoria, infirmaries, convalescent and nursing homes, rest homes, facilities established, licensed, or approved pursuant to the provisions of chapter one hundred and eleven B, and similar institutions including those providing treatment, training, instruction and care of children and adults.

"Governmental unit", the commonwealth, any department, agency, board or commission of the commonwealth, and any political subdivision of the commonwealth.

"Gross patient service revenue", the total dollar amount of a hospital's charges for services rendered in a fiscal year.

"Hospital", any hospital licensed under section fifty-one of chapter one hundred and eleven, the teaching hospital of the University of Massachusetts Medical School, and any psychiatric facility licensed under section twenty-nine of chapter nineteen.

"Hospital agreement 29", the agreement between Blue Cross of Massachusetts, Inc. and the participating hospitals approved by the commission pursuant to section five of chapter one hundred and seventy-six A and first taking effect on October first, nineteen hundred and eighty-one.

"Hospital agreement", an agreement between a nonprofit hospital service corporation and the hospital signatory thereto approved by the commission under section five of chapter one hundred and seventy-six A.

"Medicaid costs", reimbursable costs included in the basis of payment as calculated pursuant to the hospital agreement then in effect, exclusive of any costs attributable to: free care and bad debt expense or, in any hospital fiscal year beginning on or after October first, nineteen hundred and eighty-five, the uniform allowance for the statewide uncompensated care pool as calculated pursuant to section fifty-one, price level depreciation in excess of historical cost depreciation, and costs or revaluation of assets associated with a transfer of ownership occurring on or after July eighteenth, nineteen hundred and eighty-four, which exceed those permitted by section 2314 of Public Law 98-369.

"Non-acute hospital", any hospital which is not an acute hospital.

"Non-medicare gross inpatient service revenues", gross inpatient service revenues less gross inpatient service revenues associated with Title XVIII patients.

"Patient", any natural person receiving health care services from a hospital.

"Patient care cost", reimbursable costs as defined in hospital agreement 29, exclusive of: free care and bad debt expense, and price level depreciation in excess of historical costs depreciation.

"Private sector share of projected patient care costs", for any hospital in a fiscal year shall be the sum of the projected patient care costs of a hospital service corporation and the projected patient care costs for purchasers and third-party payors who reimburse acute hospitals on the basis of charges.

"Provider of health care services", any person, corporation, partnership, governmental unit, state institution and other entity which furnishes general health supplies, care, social, rehabilitative or educational services and accommodations to an eligible person.

"Projected net patient service revenues from purchasers and third party payors who pay on the basis of charges", the product of the projected basis of payment as specified in the hospital agreement increased by the differential calculated pursuant to section fifty-eight, multiplied by the proportion of services, computed as a proportion of gross patient service revenue, rendered to such purchasers and payors in the acute hospital in the most recently completed fiscal year.

"Projected payments of a hospital service corporation", the projected basis of payment as specified in the hospital agreement multiplied by the proportion of services, computed as a proportion of gross patient service revenue, rendered to a hospital service corporation's members in the acute hospital in the most recently completed fiscal year.

"Projected payments of medicaid", the product of the projected medicaid basis of payment computed in accordance with this chapter multiplied by the proportion of services, computed as a proportion of gross patient service revenue, rendered to patients covered under the reimbursement system of Title XIX of the federal Social Security Act in the acute hospital in the most recently completed fiscal year.

"Projected payments of medicare", the product of the projected medicare basis of payment under the provisions of a waiver granted by the Health Care Financing Administration, Department of Health and Human Services, multiplied by the proportion of services, computed as a proportion of gross patient service revenue, rendered to patients covered under the reimbursement system of Title XVIII of the federal Social Security Act in the acute hospital in the most recently completed fiscal year.

"Projected patient care costs for purchasers and third party payors who pay on the basis of charges", the product of patient care costs as projected in the basis of payment specified in the hospital agreement, multiplied by the proportion of services rendered to such purchasers and payors in the acute hospital in the most recently completed fiscal year.

"Projected patient care costs for a hospital service corporation", the patient care costs of the acute hospital as projected in its basis of payment, multiplied by the proportion of services rendered to the hospital service corporation's members by the hospital in the most recently completed fiscal year.

"Projected patient care costs of all patient services which are written off as free care or bad debt", the patient care costs of the acute hospital as projected in its basis of payment, multiplied by the proportion of services written off as free care or bad debt in the most recently completed fiscal year.

"Purchaser", a natural person responsible for payment for health care services rendered by a hospital.

"Revenue center", a functioning unit of a hospital which provides distinctive services to a patient for a charge.

"State institution", any hospital, sanatorium, infirmary, clinic and other such facility owned, operated or administered by the commonwealth, which furnishes general health supplies, care, social, rehabilitative or educational services and accommodations.

"Third-party payor", any entity, including, but not limited to, Title XVIII and Title XIX programs, insurance companies, health maintenance organizations and nonprofit hospital service corporations but not including a purchaser, responsible for payment, either to the purchaser or the hospital, for health care services rendered by a hospital.

SECTION 2. Section 37 of said chapter 6A, as so appearing, is hereby amended by adding the following paragraph:-

If charges are approved pursuant to this section or section thirty-nine for fiscal years beginning October first, nineteen hundred and eighty-seven or July first, nineteen hundred and eighty-eight for an acute hospital which had deficit revenue, as defined in section sixty-three, in the fiscal year beginning October first, nineteen hundred and eighty-six or July first, nineteen hundred and eighty-seven, then the commission shall add to such hospital's projected reasonable financial requirements an amount equal to the sum for the fiscal year beginning on October first, nineteen hundred and eighty-six or July first, nineteen hundred and eighty-seven of: (i) the product of the amount of deficit revenue, multiplied by the proportion of services rendered to purchasers and third party payors who pay on the basis of charges; plus (ii) the product of the amount of deficit revenue, multiplied by the proportion of services rendered to the members of a hospital service corporation, multiplied by one divided by one plus the differential determined pursuant to section fifty-eight, minus (iii) the amount of any settlement for the fiscal year beginning October first, nineteen hundred and eighty-six or July first, nineteen hundred and eighty-seven paid to the hospital by a hospital service corporation pursuant to the hospital agreement.

SECTION 3. Said chapter 6A is hereby further amended by striking out section 51, as so appearing, and inserting in place thereof the following section:-

Section 51. A. For each acute hospital, the basis of payment under the successor hospital agreement to hospital agreement 29 shall include the following limitation for the fiscal year beginning on October first, nineteen hundred and eighty-four or July first, nineteen hundred and eighty-five:

The sum of: (a) the projected payments of a hospital service corporation computed pursuant to the successor hospital agreement, plus

(b) the projected net patient service revenues from purchasers and third party payors who pay on the basis of charges established pursuant to sections fifty-six and fifty-seven shall be the lesser of:

(i) the sum of: (1) the projected patient care costs for a hospital service corporation and to purchasers and third-party payors who reimburse acute hospitals on the basis of charges, and (2) the projected patient care costs of all patient services which are written off as free care or bad debt, and (3) a working capital allowance to be specified by the commission consistent with any discount provided a third party payor for prompt payment; or

(ii) one hundred per cent plus the greater of: (1) one hundred and fourteen per cent or (2) the per cent of free care and bad debt services of the hospital, multiplied by the projected patient care costs for a hospital service corporation and to purchasers and third party payors who reimburse acute hospitals on the basis of charges.

B. For each acute hospital, the basis of payment under the successor hospital agreement to hospital agreement 29 shall include the following limitation for the fiscal years beginning on or after October first, nineteen hundred and eighty-five:

The sum of (a) the projected payments of a hospital service corporation computed pursuant to the successor hospital agreement, plus

(b) the projected net patient service revenues from purchasers and third party payors who pay on the basis of charges established pursuant to sections fifty-six and fifty-seven shall be equal to the sum of:

(1) the projected patient care costs for a hospital service corporation and to purchasers and third party payors who reimburse hospitals on the basis of charges, and

(2) a working capital allowance to be specified by the commission consistent with any discount provided by a third party payor for prompt payment, and

(3) the uniform allowance for statewide uncompensated care as calculated pursuant to subsection C, multiplied by the sum of subclauses (1) and (2).

C. The uniform allowance for statewide uncompensated care for each acute hospital with fiscal years beginning October first, nineteen hundred and eighty-five or July first, nineteen hundred and eighty-six shall be calculated by the commission as follows:

(1) for each acute hospital with a fiscal year beginning October first, nineteen hundred and eighty-five or July first, nineteen hundred and eighty-six, calculate the lesser of: (i) the projected patient care costs of all patients' services which are written off as free care or bad debt net of free care payments made pursuant to section sixty-eight and net of any extra uncompensated care distribution, if any, made pursuant to section sixty-eight A, and net of any net Title XIX differential, if any, as calculated pursuant to said section sixty-eight A, or (ii) the sum of (a) one hundred and fourteen per cent multiplied by the projected patient care cost for a hospital service corporation and for purchasers and third party payors who reimburse acute care hospitals on the basis of charges, and (b) the payments the Title XVIII program made for free care to the acute hospital for the fiscal year beginning October first, nineteen hundred and eighty-four or July first, nineteen hundred and eighty-five trended to the current fiscal year by the most recently available update to the composite inflation index in the current hospital agreement;

(2) sum, across all acute hospitals, the amounts calculated in (1). Add to this sum one-half of the aggregate net Title XIX differential, if any, as calculated pursuant to said section sixty-eight A. Add to this sum the amount of one hundred thousand dollars;

(3) for each acute hospital with a fiscal year beginning October first, nineteen hundred and eighty-five or July first, nineteen hundred and eighty-six, calculate the sum of (a) the private sector share of projected patient care costs and (b) a working capital allowance to be specified by the commission consistent with any discount provided a third party payor for prompt payment. Sum these amounts across all acute hospitals;

(4) divide the sum calculated in clause (2) by the sum calculated in clause (3). The result shall be the uniform allowance for statewide uncompensated care for each acute hospital with a fiscal year beginning October first, nineteen hundred and eighty-five or July first, nineteen hundred and eighty-six.

The uniform allowance for statewide uncompensated care for each acute hospital with a fiscal year beginning October first, nineteen hundred and eighty-six or July first, nineteen hundred and eighty-seven shall be calculated as specified in (1) to (4), except that wherever fiscal years beginning October first, nineteen hundred and eighty-five or July first, nineteen hundred and eighty-six are referenced, October first, nineteen hundred and eighty-six or July first, nineteen hundred and eighty-seven shall be substituted respectively. SECTION 3A. Section 51A of said chapter 6A, as so appearing, is hereby amended by striking out clause (d).

SECTION 4. Said chapter 6A is hereby further amended by striking out section 52, as so appearing, and inserting in place thereof the following section:-

Section 52. For each acute hospital with a fiscal year beginning July first, nineteen hundred and eighty-three and for each fiscal year thereafter the basis of payment shall be determined in the same manner as set forth in section fifty and the reduced basis of payment shall be determined in the same manner and shall be subject to the same productivity factors as are set forth in section fifty-one A; except that wherever fiscal years beginning in nineteen hundred and eighty-two, nineteen hundred and eighty-three, nineteen hundred and eighty-four, nineteen hundred and eighty-five, and nineteen hundred and eighty-six are referenced in section fifty or fifty-one A, fiscal years beginning in nineteen hundred and eighty-three, nineteen hundred and eighty-four, nineteen hundred and eighty-five, nineteen hundred and eighty-six, and nineteen hundred and eighty-seven, respectively, shall be substituted.

SECTION 5. Said chapter 6A is hereby further amended by striking out section 53, as so appearing, and inserting in place thereof the following two sections:-

Section 53. Every acute hospital shall establish its charges to the general public in accordance with the provisions of this chapter for determining approved gross patient service revenues in each fiscal year. Charges shall be established and revised periodically in accordance with the compliance standards set forth in section sixty-three and in the following manner:

(a) For hospitals with fiscal years beginning on October first, nineteen hundred and eighty-two, October first, nineteen hundred and eighty-three, and October first, nineteen hundred and eighty-four, approved gross patient service revenues for each fiscal year shall be earned without excess or shortfall.

(b) For hospitals with fiscal years beginning on October first, nineteen hundred and eighty-five, and October first, nineteen hundred and eighty-six, approved non-medicare gross inpatient service revenues for each fiscal year shall be earned without excess or shortfall.

The commission shall require that charges for health care services rendered in each acute hospital shall be uniform for all patients receiving comparable services.

Section 53A. For each acute hospital with a fiscal year beginning July first, nineteen hundred and eighty-three and for each fiscal year thereafter, charges shall be established and revised in the same manner as set forth in section fifty-three; except that wherever fiscal years beginning October first, nineteen hundred and eighty-two, October first, nineteen hundred and eighty-three, October first, nineteen hundred and eighty-four, October first, nineteen hundred and eighty-five, and October first, nineteen hundred and eighty-six are referenced in section fifty-three, fiscal years beginning July first nineteen hundred and eighty-three, July first, nineteen hundred and eighty-four, July first, nineteen hundred and eighty-five, July first, nineteen hundred and eighty-six, and July first, nineteen hundred and eighty-seven, respectively, shall be substituted.

SECTION 6. Said chapter 6A is hereby further amended by striking out section 56, as so appearing, and inserting in place thereof the following section:-

Section 56. For each acute hospital with a fiscal year beginning October first, nineteen hundred and eighty-four and for each fiscal year thereafter, approved gross patient service revenues shall be equal to the basis of payment established under section fifty-one A, increased by the uniform statewide differential determined under section fifty-eight.

For each acute hospital with fiscal years beginning October first, nineteen hundred and eighty-five and October first, nineteen hundred and eighty-six, the amount of approved non-medicare gross inpatient service revenue shall be determined by first calculating the ratio of the per cent of actual gross inpatient service revenue attributable to non-medicare patients to the per cent of case mix adjusted discharges attributable to non-medicare patients. Said calculation shall utilize gross inpatient service revenues and case mix adjusted discharges for the final six months of the fiscal year beginning on October first, nineteen hundred and eighty-three and the first six months of the fiscal year beginning on October first, nineteen hundred and eighty-four. This ratio will then be multiplied by approved gross inpatient service revenues calculated for the rate year and the resultant product shall be multiplied by the per cent of case mix adjusted discharges attributable to non-medicare patients in the rate year.

SECTION 7. Said chapter 6A is hereby further amended by striking out section 57, as so appearing, and inserting in place thereof the following section:-

Section 57. (a) For each acute hospital with a fiscal year beginning July first, nineteen hundred and eighty-three, approved gross patient service revenues shall be determined from the gross patient service revenues for the fiscal year ending June thirtieth, nineteen hundred and eighty-three approved by the commission under the provisions of chapter four hundred and nine of the acts of nineteen hundred and seventy-six, multiplied by the sum of one plus the prospectively calculated percentage change in the basis of payment calculated under hospital agreement 29 less one and four-tenths per cent.

(b) For each acute hospital with fiscal years beginning July first, nineteen hundred and eighty-four and for each fiscal year thereafter, approved gross patient service revenues shall be determined in the same manner and shall be subject to the same calculations as set forth in sections fifty-five and fifty-six; except that wherever fiscal years nineteen hundred and eighty-three and eighty-four are referenced in either of said sections fifty-five and fifty-six, fiscal years nineteen hundred and eighty-four and nineteen hundred and eighty-five, respectively, shall be substituted.

(c) In no event shall approved gross patient service revenues, as otherwise determined in accordance with the provisions of this section for any acute hospital, for the fiscal year beginning on either July first, nineteen hundred and eighty-three, or July first, nineteen hundred and eighty-four, be less than such hospital's basis of payment for such fiscal year as computed under hospital agreement 29 and the provisions of section fifty-two hereof.

(d) For each acute hospital with fiscal years beginning July first, nineteen hundred and eighty-six, and July first, nineteen hundred and eighty-seven, the calculation of approved non-medicare gross inpatient service revenue shall be determined in the same manner as set forth in section fifty-six; except that wherever fiscal years beginning October first, nineteen hundred and eighty-three, October first, nineteen hundred and eighty-four, October first, nineteen hundred and eighty-five, and October first, nineteen hundred and eighty-six are referenced in section fifty-six, July first, nineteen hundred and eighty-four, July first, nineteen hundred and eighty-five, July first, nineteen hundred and eighty-six, and July first, nineteen hundred and eighty-seven, respectively, shall be substituted.

SECTION 8. Said chapter 6A is hereby further amended by inserting after section 59 the following section:-

Section 59A. Any health maintenance organization organized under chapter one hundred and seventy-six G may (i) negotiate directly with any hospital or hospitals with respect to such health maintenance organization's rate of payment for hospital services and (ii) enter into an agreement with such hospital or hospitals reflecting such rate of payment without the approval of the commission established under section thirty-two. The specification in this section of contracting rights of health maintenance organizations shall not be construed as affirming or denying such rights with respect to any other third party payor.

SECTION 9. Said chapter 6A is hereby further amended by striking out section 63, as appearing in the 1984 Official Edition, and inserting in place thereof the following two sections:-

Section 63. Every acute hospital shall file with the commission within ninety days after the beginning of each fiscal year and at least once during the fiscal year, as deemed appropriate by the commission, a summary of revenues, costs and such statistical information as the commission may require in order to document the following:

(a) For hospitals with fiscal years beginning on October first, nineteen hundred and eighty-two, October first, nineteen hundred and eighty-three and October first, nineteen hundred and eighty-four the relationship of actual gross patient service revenues to approved gross patient service revenues for such fiscal year and for any prior fiscal year so that the commission may determine the extent to which excess revenue, the amount by which actual gross patient service revenues exceed approved gross patient service revenues, or deficit revenue, the amount by which approved gross patient service revenues exceed actual gross patient service revenues, was generated for such fiscal year or the prior fiscal year.

(b) For hospitals with fiscal years beginning on October first, nineteen hundred and eighty-five and October first, nineteen hundred and eighty-six, the relationship of actual non-medicare gross inpatient service revenues to approved non-medicare gross inpatient service revenues so that the commission may determine the extent to which excess revenue, the amount by which actual non-medicare gross inpatient service revenues exceed approved non-medicare gross inpatient services revenues, or deficit revenue, the amount by which approved non-medicare gross inpatient service revenues exceed actual non-medicare gross inpatient service revenues, was generated for such fiscal years.

For each fiscal year beginning on October first, nineteen hundred and eighty-three, October first, nineteen hundred and eighty-four, and October first, nineteen hundred and eighty-five, approved gross patient service revenues shall be adjusted by the commission downward or upward, as the case may be, by the percentage amount by which actual gross patient service revenues in any prior fiscal year beginning on or after October first, nineteen hundred and eighty-two, exceeded, or was less than, approved gross patient service revenues for such prior fiscal year.

For the fiscal year beginning on October first, nineteen hundred and eighty-six, approved non-medicare gross inpatient service revenues will be adjusted by the commission downward or upward, as the case may be, by the percentage amount by which actual non-medicare gross inpatient service revenues, in the fiscal year beginning on October first, nineteen hundred and eighty-five, exceeded, or were less than, approved non-medicare gross inpatient service revenues for such fiscal year.

The commission shall revise approved gross patient service revenues for fiscal years beginning on October first, nineteen hundred and eighty-three, October first, nineteen hundred and eighty-four, and October first, nineteen hundred and eighty-five, and approved non-medicare gross inpatient service revenues for the fiscal year beginning on October first, nineteen hundred and eighty-five and October first, nineteen hundred and eighty-six, and approved charges within thirty days after it has approved an exception to the basis of payment under a hospital agreement.

The commission shall make such adjustments as necessary during the fiscal year, pursuant to regulations promulgated under the authority of this chapter to ensure that, for fiscal years beginning October first, nineteen hundred and eighty-two, October first, nineteen hundred and eighty-three, October first, nineteen hundred and eighty-four, approved gross patient service revenue shall be earned without excess or shortfall and for fiscal years beginning October first, nineteen hundred and eighty-five, and October first, nineteen hundred and eighty-six, approved non-medicare gross inpatient service revenues shall be realized without excess or shortfall.

If a subsequently enacted statute establishes a system of hospital revenue controls for fiscal year nineteen hundred and eighty-eight and later, said system should reflect excess or deficit revenue for the fiscal year beginning October first, nineteen hundred and eighty-six. If no subsequently enacted statute establishes a system of hospital revenue controls for fiscal years nineteen hundred and eighty-eight and later which reflects excess or deficit revenue for the fiscal year beginning October first, nineteen hundred and eighty-six, then each acute hospital which has excess revenue for the fiscal year beginning October first, nineteen hundred and eighty-six shall pay to the statewide uncompensated care pool in addition to its net liability to the pool as specified in paragraph (1) of section seventy-five, an amount equal to: (i) the product of the amount of excess revenue, multiplied by the proportion of non-medicare inpatient services rendered to purchasers and third party payors who pay on the basis of charges, plus (ii) the product of the amount of excess revenue, multiplied by the proportion of non-medicare inpatient services rendered to the members of a hospital service corporation, multiplied by one divided by one plus the differential determined pursuant to section fifty-eight, minus (iii) the amount of any settlement for the fiscal year beginning October first, nineteen hundred and eighty-six paid by the hospital to a hospital service corporation pursuant to the hospital agreement.

Section 63A. For each acute hospital with a fiscal year beginning July first, nineteen hundred and eighty-three and for each fiscal year thereafter, excess or deficit revenue shall be determined in the manner set forth in section sixty-three; except that wherever fiscal years beginning October first, nineteen hundred and eighty-two, October first, nineteen hundred and eighty-three, October first, nineteen hundred and eighty-four, October first, nineteen hundred and eighty-five, October first, nineteen hundred and eighty-six are referenced in section sixty-three, fiscal years beginning July first, nineteen hundred and eighty-three, July first, nineteen hundred and eighty-four, July first, nineteen hundred and eighty-five, July first, nineteen hundred and eighty-six, and July first, nineteen hundred and eighty-seven, respectively, shall be substituted.

SECTION 10. Subsection B of section 68 of said chapter 6A, as so appearing, is hereby amended by striking out paragraph (d) and inserting in place thereof the following paragraph:-

(d) medicaid payments shall be computed in the following manner:

(1) For acute hospitals with fiscal years beginning October first, nineteen hundred and eighty-two, October first, nineteen hundred and eighty-three and October first, nineteen hundred and eighty-four, the medicaid basis of payment derived under paragraph (c) shall be apportioned to medicaid and all other payors pursuant to the apportionment methods specified in the hospital agreement using the charge data applicable to Title XIX beneficiaries. For the fiscal year beginning October first, nineteen hundred and eighty-four, the resulting medicaid payments shall be adjusted by subtracting the amount determined pursuant to paragraph (e). For the fiscal year beginning October first, nineteen hundred and eighty-five, the medicaid basis of payment derived under paragraph (c) shall be apportioned to medicaid in the following manner: (i) approved gross inpatient service revenue shall be multiplied by the ratio of actual non-medicare gross inpatient service revenue divided by approved non-medicare gross inpatient service revenue; (ii) the resultant product shall be apportioned to all inpatient settlement areas specified in the current hospital agreement, based upon the percentage of actual gross inpatient service revenues attributable to the respective inpatient settlement areas. Actual outpatient charges shall continue to be apportioned to the outpatient settlement area specified in the current hospital agreement; (iii) medicaid's per cent liability within each settlement area will then be obtained by dividing medicaid actual charges by the charges apportioned in accordance with clause (ii); (iv) said percentages will then be multiplied by the medicaid basis of payment apportioned to the respective settlement area. The resulting sum of the individual products will then be further adjusted by subtracting the amount determined pursuant to paragraph (e). For the fiscal year beginning October first, nineteen hundred and eighty-six, the medicaid basis of payment derived under paragraph (c) shall be apportioned to medicaid in the following manner: (i) approved gross inpatient service revenue shall be multiplied by the ratio of actual non-medicare gross inpatient service revenue divided by approved non-medicare gross inpatient service revenue unadjusted for any excess or deficit non-medicare gross inpatient service revenue earned in the preceding year; (ii) the resultant product shall be apportioned to all inpatient settlement areas specified in the current hospital agreement based upon the percentage of actual gross inpatient service revenues attributable to the respective inpatient settlement areas. Actual outpatient charges shall continue to be apportioned to the outpatient settlement area specified in the current hospital agreement; (iii) medicaid's per cent liability within each settlement area will then be obtained by dividing medicaid actual charges within each settlement area by the charges apportioned in accordance with clause (ii); (iv) said percentages will then be multiplied by the medicaid basis of payment apportioned to the respective settlement area. The resulting sum of the individual products will then be further adjusted by subtracting the amount determined pursuant to paragraph (e).

(2) For acute care hospitals with fiscal years beginning July first, nineteen hundred and eighty-two, July first, nineteen hundred and eighty-three, July first, nineteen hundred and eighty-four and July first, nineteen hundred and eighty-five, the medicaid basis of payment derived under paragraph (c) shall be apportioned to medicaid and all other payors pursuant to the apportionment methods specified in the hospital agreement using the charge data applicable to Title XIX beneficiaries. For fiscal years beginning July first, nineteen hundred and eighty-four and July first, nineteen hundred and eighty-five, the resulting medicaid payments shall be further adjusted by subtracting the amount determined pursuant to paragraph (e). For fiscal year beginning July first, nineteen hundred and eighty-six, the medicaid basis of payment derived under paragraph (c) shall be apportioned to medicaid in the following manner: (i) approved gross inpatient service revenue shall be multiplied by the ratio of actual non-medicare gross inpatient service revenue divided by approved non-medicare gross inpatient service revenue; (ii) the resultant product shall be apportioned to all inpatient settlement areas specified in the current hospital agreement based upon the percentages of actual gross inpatient service revenues attributable to the respective inpatient settlement areas. Actual outpatient charges shall be apportioned to the outpatient settlement area specified in the current hospital agreement; (iii) medicaid's per cent liability within each settlement area will then be obtained by dividing medicaid actual charges within each settlement area by the charges apportioned in accordance with clause (ii); (iv) said percentages will then be multiplied by the medicaid basis of payment apportioned to the respective settlement area. The resulting sum of the individual products will then be further adjusted by subtracting the amount determined pursuant to paragraph (e). For the fiscal year beginning July first, nineteen hundred and eighty-seven, the medicaid basis of payment derived under paragraph (c) shall be apportioned to medicaid in the following manner: (i) approved gross inpatient service revenue shall be multiplied by the ratio of actual non-medicare gross inpatient service revenue divided by approved non-medicare gross inpatient service revenue unadjusted for any excess or deficit non-medicare gross inpatient service revenue earned in the preceding year; (ii) the resultant product shall be apportioned to all inpatient settlement areas specified in the current hospital agreement, based upon the percentage of actual gross inpatient service revenues attributable to the respective inpatient settlement area. Actual outpatient charges shall continue to be apportioned to the outpatient settlement area specified in the current hospital agreement; (iii) medicaid's per cent liability within each settlement area will then be obtained by dividing medicaid actual charges within each settlement area by the charges apportioned in clause (ii); (iv) said percentages will then be multiplied by the medicaid basis of payment apportioned to the respective settlement area. The resulting sum of the individual products will then be further adjusted by subtracting the amount determined pursuant to paragraph (e).

SECTION 11. Said chapter 6A is hereby further amended by striking out section 68A, as so appearing, and inserting in place thereof the following section:-

Section 68A. If the Title XIX payment methodology set forth in section sixty-eight is not approvable by the Health Care Finance Administration hereinafter referred to as HCFA, the commission is hereby authorized and directed to modify the Title XIX payment methodology set forth in section sixty-eight as may be required to secure HCFA approval. In making said modification, the commission shall seek a methodology which provides Title XIX payments to acute hospitals which are in aggregate comparable to those provided for by the methodology of said section sixty-eight.

If, in order to gain HCFA approval, modifications are required affecting only disproportionate share hospitals which for any disproportionate share hospital result in reimbursement which is not approximately equal to reimbursement provided by the methodology of said section sixty-eight for the fiscal year beginning on or after October first, nineteen hundred and eighty-five, then for each such disproportionate share hospital, the commission shall calculate the difference between (a) the expected Title XIX payments to that hospital under the methodology set forth in said section sixty-eight and (b) the Title XIX payments to that hospital as modified to obtain HCFA approval. This difference shall be called the Title XIX differential. The sum of the Title XIX differentials across all disproportionate share hospitals shall be called the aggregate Title XIX differential. The commission is authorized and directed to modify the Title XIX payment methodology so that Title XIX payments to acute hospitals other than disproportionate share hospitals are increased to the extent approvable by HCFA by an amount, equal in the aggregate, to the aggregate Title XIX differential. In the event that the commission modifies the payment methodology pursuant to this paragraph, the increased payments to such hospitals shall be called Title XIX increments, and shall be paid into the statewide uncompensated care pool in accordance with the provisions of section seventy-five. The sum of the Title XIX increments across all acute hospitals shall be called the aggregate Title XIX increment. The aggregate Title XIX increment shall be distributed to disproportionate share hospitals in accordance with the provisions of said section seventy-five. The amount distributed to each disproportionate share hospital shall be equal to its respective Title XIX differential multiplied by the aggregate Title XIX increment divided by the aggregate Title XIX differential. The amount so distributed shall be called the extra uncompensated care distribution.

In the event that there is an aggregate Title XIX differential; and in the event that the aggregate Title XIX increment is not approximately equal to the aggregate Title XIX differential, then for each disproportionate share hospital, the commission shall subtract the extra uncompensated care distribution from the Title XIX differential. This difference shall be called the net Title XIX differential. The sum of this difference across all disproportionate share hospitals shall be called the aggregate net Title XIX differential. The commission is hereby authorized and directed to provide that each disproportionate share hospital be paid one-half of its net Title XIX differential by the Medical Assistance Program.

SECTION 12. Said chapter 6A is hereby further amended by adding the following two sections:-

Section 75. In order to more equitably distribute the burden of financing uncompensated acute hospital services across all acute hospitals, there shall be a statewide uncompensated care pool. Each acute hospital's approved gross patient service revenue shall include a uniform allowance for statewide uncompensated care, as specified pursuant to section fifty-one. It is the intention that all nongovernmental payors shall contribute to the cost of uncompensated care as funded through said pool, either through the payment of charges or the payment of negotiated rates.

Said pool shall be administered as follows:

(1) For each acute hospital with a fiscal year beginning on or after October first, nineteen hundred and eighty-five, multiply the corresponding fiscal year's uniform allowance for statewide uncompensated care by the sum of the private sector share of projected patient care costs and the working capital allowance specified by the commission pursuant to section fifty-one. Add to this product the Title XIX increment, if any, as calculated pursuant to section sixty-eight A for the current year. Define this sum as the hospital's gross liability to the said pool. Subtract from this amount the lesser of (i) the projected patient care costs of all patients' services which are written off as free care or bad debt, net of free care payments made pursuant to section sixty-eight and net of any extra uncompensated care distribution, if any, made pursuant to said section sixty-eight A, and net of any net Title XIX differential, if any as calculated pursuant to said section sixty-eight A, or (ii) the sum of (a) one hundred and fourteen per cent multiplied by the projected patient care costs for a hospital service corporation and for purchasers and third party payors who reimburse acute hospitals on the basis of charges, and (b) the payments made by the Title XVIII program for free care to the acute hospital for the fiscal year, beginning October first, nineteen hundred and eighty-four, for hospitals with fiscal years that begin on October first or July first, nineteen hundred and eighty-five, for hospitals with fiscal years that begin on July first, trended to the current fiscal year by the most recently available update to the composite inflation index in the current hospital agreement. Subtract from this result the extra distribution for uncompensated care calculated pursuant to section sixty-eight A, if any; and subtract from this result one-half of the net Title XIX differential, if any, as defined in said section sixty-eight A. The result, if positive, is the net hospital liability to said pool; the result, if negative, is the net liability of said pool to the hospital.

(2) Prior to the beginning of each hospital fiscal year, the commission shall, using the most appropriate and accurate data available, estimate the uniform allowance for statewide uncompensated care. These estimates shall be updated, on a timely basis, as significant new information becomes available. The commission shall use these same data and estimates to calculate each acute hospital's net estimated liability to the pool, and the commission shall notify the hospital and said pool's administrative agent of the estimated net liability to said pool, or adjustment thereof, no later than thirty days in advance of the first periodic payment and fifteen days in advance of any subsequent adjustment to said periodic payment. The commission shall, no later than June first, nineteen hundred and eighty-seven, re-estimate the uniform allowance for statewide uncompensated care and hospital specific interim payments to be effective for the fiscal year ending September thirtieth, nineteen hundred and eighty-seven or June thirtieth, nineteen hundred and eighty-eight, so as to assure that there will be no year-end deficit in said pool. The commission shall, where it deems necessary, conduct audits of the fiscal year nineteen hundred and eighty-six bad debt and free care data in arriving at this re-estimate.

(3) The commission shall establish an interim payment system to assure periodic payments of estimated liabilities to and from the pool. Acute hospitals that have an estimated annual net liability to the pool shall be required to pay monthly one-twelfth of their estimated net annual liability to said pool and acute hospitals to which said pool owes an estimated net liability shall receive monthly payments from said pool equal to one-twelfth of this estimated annual net liability, beginning with the third month of the first fiscal year in which the hospital participates in said pool, except that in the last month of the first fiscal year in which the hospital participates in said pool the net liability paid to or from said pool shall equal one-fourth of the hospital's estimated annual net liability to or from said pool for said fiscal year.

(4) The commission shall contract with a nonprofit hospital service corporation to act as its administrative agent for payments to and from said pool. Said agent shall maintain any cash balance in the pool in a separate interest-bearing account and any interest on this account shall accrue and be applied to the final settlement of said pool. Said agent shall disburse payments determined by the commission, subject to paragraph (5). Said agent shall provide the commission with the detail of monthly receipts to and payments from said pool at the end of each monthly period, including the name of any acute hospital which did not make its scheduled periodic payment to said pool. Upon proper notification by said agent and verification by the commission, the commission shall instruct said agent to offset payments on hospital claims from the agent in the amount of the payment owed to the pool, plus a surcharge of five per cent on that amount, and to transfer the withheld funds into said pool.

(5) At no time shall said agent make periodic pay-outs from said pool in excess of monies that have been paid into the pool for the same period. Each acute hospital having an estimated net liability to said pool shall make payment to said agent on the first day of each month, beginning December, nineteen hundred and eighty-five, for hospitals with fiscal years beginning October first, and beginning September, nineteen hundred and eighty-six, for hospital with fiscal years beginning July first, for its periodic net liability. On the fifteenth day of the same months, the agent shall make payment to each hospital that is to receive a periodic payment for an amount which shall equal said pool's periodic net liability to the hospital multiplied by the lesser of (i) one, or (ii) the ratio of said pool's total receipts to the pool's total expected receipts for that period; except that any late payments to said pool made in one period for prior periods shall be added on a pro rata basis to the next periodic payment to hospitals.

(6) Acting upon the instructions of the commission and as its administrative agent, the nonprofit hospital service corporation shall be immune from all liability, legal actions, damages or other penalty for administration of said pool, except for its own fraudulent or negligent acts. If said agent offsets claims payments as ordered by the commission, it shall be deemed not to be in breach of contract, and hospitals to which payment is offset under order of the commission must serve all subscribers and members of the nonprofit hospital service corporation in accordance with HA-30 or other hospital agreements then in effect. For the cost of administering said pool, the administrative agent shall collect from said pool its reasonable costs up to one hundred thousand dollars per hospital fiscal year that it serves as agent. Such payment is to be financed by an increment to the uniform statewide allowance for uncompensated care, as specified in section fifty-one.

(7) There shall be rendered, at the conclusion of each calendar year, starting with nineteen hundred and eighty-five, an audit opinion of said agent's administration of said pool. This audit opinion shall be made by the outside auditors employed by said agent to audit its other financial operations, and the audit results shall be reported to the commission for review.

Section 76. There is hereby established a program, subject to appropriation, to assist community health centers deliver services to uninsured individuals. For fiscal year nineteen hundred and eighty-six, the commission shall develop a distribution formula based upon community health center cost reports for fiscal year nineteen hundred and eighty-five arrived at in consultation with the Massachusetts league of community health centers and other interested parties. The amount of assistance for services provided to uninsured individuals for fiscal year nineteen hundred and eighty-seven, subject to appropriation, shall be the amount provided in uncompensated care by the community health centers for nineteen hundred and eighty-six according to a distribution formula to be developed by the commission, after consultation with the Massachusetts league of community health centers and other interested parties.

The commission shall establish criteria which include provision that community health centers make reasonable efforts to collect payment for community health center services prior to attributing those services to uncompensated care. In developing such criteria, the commission shall identify those populations which shall not require collection action; provided, however, that the commission, in carrying out its duties set forth in this section, shall not consider the following resources of such community health center: unrestricted grants, gifts, and donations, and restricted grants, gifts and donations which are not restricted to subsidy for uncompensated care.

SECTION 13. Chapter 111 of the General Laws is hereby amended by inserting after section 51C the following section:-

Section 51D. No acute hospital shall impose any discriminatory restrictions or conditions relating to admission, availability of services, treatment, transfer or discharge with respect to any patient because that patient is a medicare beneficiary. Prohibited practices include, but are not limited to, any such discrimination based on the diagnostically related group classification of such a beneficiary or any other criteria, including cost of treatment, severity of illness, and average length of stay, which are not equally applied to all patients with comparable medical needs seeking or receiving the services of the hospital. For medicare patients, admission and discharge shall be consistent with Public Laws 97-248, 98-21 and 09-369 and any other applicable federal statutes and regulations.

The department shall establish an advocacy office for the receipt of complaints of alleged violations of the provisions of this section. Said advocacy office shall investigate such alleged violations and if the advocacy office finds cause for crediting the allegations of a complaint, it will seek to resolve such complaint through negotiation. Hospitals shall cooperate with the said advocacy office in the investigation and resolution of an alleged violation. Such cooperation shall include, but not be limited to, the provisions of nonconfidential information reasonably related to the alleged violation, and the provision of patient records with the consent of the patient.

If the advocacy office cannot promptly negotiate a resolution to a complaint, the department may forward the complaint and any information obtained to the attorney general. The attorney general may bring a civil action for injunctive or other equitable relief to enforce the provisions of this section.

If the advocacy office cannot negotiate a resolution to the complaint and has cause to believe there exists a practice or pattern of violations of this section at any hospital, the department may also forward the complaints to the regional office of the health care financing administration for appropriate action.

Any information supplied by a hospital to the department which is provided to the attorney general shall not, unless otherwise ordered by a court for good cause shown, be disclosed to any person other than the patient, the authorized agent of the patient or representative of the attorney general, unless with the consent of the hospital providing the same.

The department shall have the authority to promulgate such regulation as may be necessary to implement the provisions of this section.

The attorney general may bring a civil action for injunctive or other equitable relief to enforce the provisions of this section.

In any action brought by the attorney general under this section, the court may also award a civil penalty of not more than five thousand dollars for each violation unless the peer review organization of said health care financing administration has formally commenced sanction proceedings against an institution as provided in 42 CFR 474.30.

Hospitals shall provide written notice of the rights established by this section to every medicare eligible person seeking services in the facility. In addition, notice of such rights shall be conspicuously posted in the facility.

Nothing in this section shall be construed to prevent a hospital from implementing a decision relating to patient care which is in the best interest of a patient and in conformity with good medical and hospital practice.

Nothing in this section shall be construed as limiting any other rights or remedies provided by law to medicare patients. Nothing in this section shall be construed to limit the applicability of section sixty B of chapter two hundred and thirty-one. Nothing in this section shall give rise to or limit an otherwise available cause of action in negligence or medical malpractice.

The department shall conduct an evaluation as to whether the introduction of the medicare prospective payment system has affected the delivery of quality care to medicare beneficiaries including the appropriateness of admissions and discharges to acute care hospitals. Said department shall submit an interim report of its findings to the clerk of the house of representatives to the general court no later than March first, nineteen hundred and eighty-seven, and a final report not later than March first, nineteen hundred and eighty-eight, including any applicable recommendations for legislation arrived after consultation with the Massachusetts Hospital Association, the Massachusetts Medical Society, and others. Acute hospitals are hereby required to submit to the department relevant data reasonably necessary to conduct this evaluation. The department shall not seek information directly from hospitals when such information is available from other sources. The department shall protect the confidentiality of patient information provided by the hospitals. No data, findings, conclusions or reports developed by the department during or as a result of such evaluation from hospital/practitioner data shall be released without thirty days prior notice to such hospital. Comments by the hospital shall accompany the release of the data, findings, conclusions or reports.

SECTION 14. Section 10 of chapter 372 of the acts of 1982 is hereby amended by striking out the third sentence and inserting in place thereof the following sentence:- Sections one, one A, one B, two, five, five A, six, and eight of this act shall not apply to services provided after September thirtieth, nineteen hundred and eighty-seven, for hospitals with fiscal years beginning on October first or to services provided after June thirtieth, nineteen hundred and eighty-eight, for hospitals with fiscal years beginning July first.

SECTION 15. Section eight of chapter three hundred and forty-seven of the acts of nineteen hundred and eighty-four is hereby repealed.

SECTION 16. Said chapter 347 is hereby further amended by striking out section 11 and inserting in place thereof the following section:-

Section 11. No other section of this act shall become operative prior to October first, nineteen hundred and eighty-five unless any federal approval of the provisions of sections three, four, and five of this act required by the terms of the waiver of Title XIX principles of reimbursement dated September thirtieth, nineteen hundred and eighty-two is obtained and in effect; provided, however, that lack of federal approval of the provisions contained in the second sentence of subparagraph (3) of paragraph (c) of subsection B of section sixty-eight of chapter six A and the last sentence of paragraph (e) of subsection C of said section sixty-eight shall not prevent any other provisions of this act from becoming operative.

SECTION 17. Said chapter 347 is hereby further amended by adding the following section:-

Section 12. The provisions of this act shall not apply to any services provided after September thirtieth, nineteen hundred and eighty-seven for hospitals with fiscal years beginning on October first, or to services provided after June thirtieth, nineteen hundred and eighty-eight for hospitals with fiscal years beginning July first.

SECTION 18. Within thirty days after the effective date of this act, the parties to the existing hospital agreement shall develop an amendment to said agreement which has the purpose of bringing the agreement into conformance with this act. The Massachusetts Hospital Association may act as a negotiating agent pursuant to section five of chapter one hundred and seventy-six A of the General Laws. The executed hospital agreement amendment shall be submitted to the commission for approval pursuant to said section five.

Within thirty days of the approval of the rate setting commission, a nonprofit hospital service corporation shall offer the approved hospital agreement amendment developed pursuant to this section to the individual acute hospital for execution.

The hospital agreement in effect at the time of the passage of this act shall terminate as to those acute hospitals choosing not to execute the amendment developed pursuant to this section. The provisions of section sixty of chapter six A of the General Laws shall apply to such acute hospitals.

SECTION 19. There is hereby established a special commission on health care financing and delivery reform. Said commission shall consist of the secretary of the executive office of human services or his designee, the secretary of the executive office of consumer affairs and business regulation or his designee, the secretary of the executive office of elder affairs or his designee, and eight persons to be appointed by the governor, one of whom shall be a consumer of health care, one of whom shall be a representative from each of the following organizations, to be selected from a list of recommendations provided by that organization: the state council of the AFL-CIO, Blue Cross of Massachusetts, Inc., the Life Insurance Association of Massachusetts, the Massachusetts Association of Health Maintenance Organizations, the Massachusetts Business Roundtable, the Massachusetts Hospital Association and the Massachusetts Medical Society.

Said commission shall investigate health care financing options, for hospital, ambulatory, and post-hospital care, including the impact of increased competitiveness on the health care delivery system of the commonwealth and on access to affordable, high quality health care for every citizen of the commonwealth. In recognition of the increasingly competitive environment, said commission is charged with addressing: necessary changes in the method of provider payments; market entry requirements at both the provider and insurer level; the provision of insurance and the development of a competitive insurance market; funding, delivery, and utilization of health services for the uninsured and underinsured and recipients of benefits under chapter one hundred and seventeen funding a continuum of health care services, including preventive care, ambulatory care, acute hospital care, aftercare, and chronic care; funding graduate medical education; and the economic impact of potential dislocation in the health care industry.

Said commission shall also examine, but not be restricted to, the following issues: the extent to which hospital prices will be deregulated; the extent to which funding for services to the underinsured and uninsured should be removed from the charges of medical providers; the extent to which the uninsured are employees who lack health care coverage as a fringe benefit; the treatment of monopoly providers; the contracting rights of all purchasers of health care services; the role of insurance rate regulation; and the role of the Determination of Need program. Said commission shall also examine incentives to insurers to underwrite individuals that are clinically high risk, utilization review principles, the need for information in a competitive market, developing physician payment methodologies which are consistent with a competitive market, and insuring that a viable market is maintained for Medicare supplement subscribers and nongroup populations.

Said commission shall also be charged with recommending any special consideration that must be given to existing payor and provider responsibilities that may not be appropriately accommodated in a transition from a prospective rate-regulated financing system to a more competitive system. Said commission shall propose specific legislative solutions for any transition issues which are identified. This shall include a recommendation of a method for settling the liability of the pool to the hospitals on the basis of the actual costs of bad debt and free care incurred in the fiscal years covered by the statewide uncompensated care pool, established by section seventy-five of chapter six A of the General Laws. It is intended that all monies remaining in said pool after all payments to and from the pool have been made shall be transferred to the mechanism for funding uncompensated care that said commission might recommend. It is further intended that said funding mechanism should include provisions to make a final settlement of said pool which ensures that each acute hospital recovers no more and no less than its actual bad debt and free care costs for the fiscal years covered by said pool.

It is also intended that all companies authorized to sell accident and health insurance under chapter one hundred and seventy-five, of the General Laws, nonprofit hospital service corporations, corporations doing business in Massachusetts, other employers including governmental employers, and health care providers including health maintenance organizations, shall cooperate fully with any efforts by the study commission to investigate sources of broad-based financing for uncompensated care that do not rely upon the hospital charge structure. Said commission may establish a data bank into which the data gathered to carry out the requirements of this section may be deposited. Said commission is hereby authorized to contract for the services necessary for the establishment of such data bank.

There shall be an advisory group to said commission known as the health service access and quality advisory group. Said group shall include a representative selected by each organization represented on said commission, and shall also include thirteen others to be appointed by the secretary of human services, one of whom shall be a representative of the uninsured, one of whom shall be a representative of a public hospital, one of whom shall be a Medicaid recipient, one of whom shall be a Medicare recipient, one whom shall be a representative of the Massachusetts Nurses Association, one of whom shall be a representative of the Massachusetts league of community health centers, one of whom shall be a representative of a health systems agency, one of whom shall be a representative of small business, one of whom shall be a health policy analyst with background in the problems of the uninsured and the underinsured, one of whom shall be a representative of a major teaching hospital, one of whom shall be a representative of the Massachusetts Federation of Nursing Homes, and one of whom shall be a representative of the Massachusetts Association of Community Health Agencies.

Said group shall investigate the needs of the uninsured and the underinsured in the commonwealth for health care services and issues of quality health care in a changing health care environment.

Said group shall make recommendations to said commission concerning adequate means to provide health care coverage for all citizens of the commonwealth and the financial and regulatory requirements necessary to ensure the effective delivery and efficient utilization of health services. Said group shall meet with said commission three times prior to said commission's reporting deadline and at any other time as it deems necessary by agreement between the chairpersons of said group and said commission.

Said group shall submit its findings and recommendations no later than April first, nineteen hundred and eighty-six to said commission and to the clerk of the house of representatives who shall refer a copy of said findings and recommendations to the joint committee on health care and the house and senate committees on ways and means.

Said commission shall be subject to the open meeting law as provided for under the provisions of section two A of chapter four of the General Laws. Said commission shall issue a final report to the clerk of the house of representatives on or before June first, nineteen hundred and eighty-six.

SECTION 20. The commissioner of the division of insurance is hereby authorized and directed to render an opinion on the status of so-called "preferred provider organizations." Said commissioner shall present his results by December thirty-first, nineteen hundred and eighty-five, to the speaker of the house of representatives, the president of the senate, and the membership of the special commission on health care financing and delivery reform, established by section nineteen of this act.

SECTION 21. After the effective date of this act no waiver of the Medicare principles of reimbursement for acute hospital inpatient services for Title XVIII services pursuant to the Social Security Act shall be implemented in the commonwealth.

SECTION 22. The provisions of chapter three hundred and eighty-nine of the acts of nineteen hundred and eighty-three, and chapter one hundred and eighty-three of the acts of nineteen hundred and eighty-four, shall not apply to any services provided after September thirtieth, nineteen hundred and eighty-seven for hospitals with fiscal years beginning on October first, or to services provided after June thirtieth, nineteen hundred and eighty-eight for hospitals with fiscal years beginning July first.

SECTION 23. Notwithstanding the provisions to the contrary of chapter six hundred and thirty-six of the acts of nineteen hundred and eighty-three, the provisions of sections thirty-seven to forty-seven, inclusive, of chapter six A of the General Laws shall apply to acute hospitals as well as to non-acute hospitals.

SECTION 24. This act shall take effect as of October first, nineteen hundred and eighty-five; provided, however, that sections two and twenty-three shall take effect as of October first, nineteen hundred and eighty-seven; and provided, further, that, with the exceptions of sections one, two, thirteen, fourteen, fifteen, seventeen, twenty-two and twenty-three, the provisions of this act shall not apply to services provided after September thirtieth, nineteen hundred and eighty-seven for community health centers and for hospitals with fiscal years beginning October first, or to services provided after June thirtieth, nineteen hundred and eighty-eight for hospitals with fiscal years beginning July first.