SENATE DOCKET, NO. 499        FILED ON: 1/14/2019

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 694

The Commonwealth of Massachusetts

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PRESENTED BY:

Edward J. Kennedy

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act to assist community hospitals.

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PETITION OF:

SENATE DOCKET, NO. 499        FILED ON: 1/14/2019

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 694

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-First General Court
(2019-2020)

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An Act to assist community hospitals.

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 6D of the General Laws, as appearing in the 2014 Official Edition, is hereby amended by adding after section 5, the following new language: -

Section 5A: Assistance to Community Hospitals

Section 5A (a) The commission, in consultation with the center for health information and analysis shall consider measures to address price variation among hospitals and develop recommendations to provide relief for community hospitals that aligns with the cost containment efforts set forth in Chapter 224 of the Acts of 2014 and meets the criteria established by the Special Commission on Provider Price Variation. 

(b) In developing the recommendations, the commission shall, at a minimum, consider the following measures (i) reimbursing hospitals at no more than the 80th percentile of the state wide commercial relative price and no less than the 20th percentile of the statewide commercial relative price; (ii) establishing three hospital reimbursement tiers such that in one of the tiers hospital commercial rates may not increase in the future rate year above the carrier-specific weighted average rate for the current year, another tier limits hospital rate increases to no more than 1 per cent above the carrier-specific weighted average rate for the current year, and the third tier the hospital weighted average rate of change would not be limited; (iii) developing a target hospital rate distribution that establishes a baseline relative price and a maximum relative price, based on a carrier-specific relative price distribution.

(c) In developing the recommendations to address provider price variation and provide assistance to community hospitals, the commission shall consider the following (i) alternative payment methodologies in place between a hospital and carrier; (ii) the volume and mix of services provided; (iii) a hospital’s patient population and payer mix; (iv) hospital inpatient and outpatient rates as compared to the commercial relative price levels and how to avoid cost shifting; (vi) whether the hospital is part of a healthcare system that had an overall positive operating margin in the prior year as determined by the Centers for Health Information and Analysis or had an aggregate hospital payment of greater than 90 per cent of the carrier’s commercial relative price; (viii) the impact of reimbursement rate increases to physicians and other providers affiliated with or employed by acute care hospitals and (ix) any other information deemed necessary by the commission.

(d) Any proposal recommended by the commission shall not result in a net increase in premiums and shall align with the cost containment efforts set forth in Chapter 224 of the Acts of 2014 and meets the criteria established by the Special Commission on Provider Price Variation. 

(e) The commission shall submit its proposed process to the clerks of the senate and house of representatives, the joint committee on health care financing and the senate and house committees on ways and means no later than January 1, 2020.

The joint committee on health care financing may, not later than 30 days after the submission of the proposed definitions with the clerks of the senate and house of representatives, the joint committee on health care financing and the senate and house committees on ways and means, hold a public hearing on the proposed definitions. The joint committee may report its findings to the general court, together with drafts of legislation necessary to implement those findings. In the report, the joint committee may include its recommendation on whether to affirm or modify the proposed process.  The joint committee shall issue any findings not later than 20 days after the public hearing and shall provide a copy of the findings and any proposed legislation to the board. If the general court does not enact legislation with respect to the recommendations within 65 days after the council has submitted its proposed process to the joint committee, the proposed process shall take effect.