Bill S.801

SENATE DOCKET, NO. 1600 FILED ON: 1/19/2023

SENATE . . . . . . . . . . . . . . No. 801

By Ms. Rausch, a petition (accompanied by bill, Senate, No. 801) of Rebecca L. Rausch for legislation to strengthen health spending accountability processes within the health policy commission and the center for health information and analysis. Health Care Financing.

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-Third General Court
(2023-2024)

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An Act strengthening health spending accountability processes within the health policy commission and the center for health information and analysis.

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 is hereby amended by striking out section 10, as appearing in the 2020 Official Edition, and inserting in place thereof the following section:-

Section 10. (a) For the purposes of this section, “health care entity” shall mean any entity identified by the center under section 18 of chapter 12C.

(b) The commission shall provide notice to all health care entities that have been identified by the center under section 18 of chapter 12C. Such notice shall state that the commission may analyze the health care spending performance of individual health care entities and may require certain actions, as established in this section, from health care entities so identified.

(c) In addition to the notice provided under subsection (b), the commission may require any health care entity that is identified by the center under section 18 of chapter 12C to file a performance improvement plan with the commission. The commission shall provide written notice to such health care entity that they are required to file a performance improvement plan. Within 45 days of receipt of such written notice, the health care entity shall either: (1) file a performance improvement plan with the commission; or (2) file an application with the commission to waive or extend the requirement to file a performance improvement plan.

(d) The health care entity may file any documentation or supporting evidence with the commission to support the health care entity’s application to waive or extend the requirement to file a performance improvement plan. The commission shall require the health care entity to submit any other relevant information it deems necessary in considering the waiver or extension application; provided, however, that such information shall be made public at the discretion of the commission.

(e) The commission may waive or delay the requirement for a health care entity to file a performance improvement plan in response to a waiver or extension request filed under subsection (c) in light of all information received from the health care entity, based on a consideration of the following factors:

(1) the spending, price and utilization trends of the health care entity over time, and any demonstrated improvement to reduce spending or total medical expenses;

(2) any ongoing strategies or investments that the health care entity is implementing to improve future long-term efficiency and spending performance;

(3) whether the factors that led to increased spending for the health care entity can reasonably be considered to be unanticipated and outside of the control of the entity. Such factors may include, but shall not be limited to, age and other health status factors and other cost inputs such as pharmaceutical expenses and medical device expenses;

(4) the overall financial condition of the health care entity;

(5) a significant difference between the growth rate of potential gross state product and the growth rate of actual gross state product, as determined under section 7H 1/2 of chapter 29; and

(6) any other factors the commission considers relevant.

(f) If the commission declines to waive or extend the requirement for the health care entity to file a performance improvement plan, the commission shall provide written notice to the health care entity that its application for a waiver or extension was denied and the health care entity shall file a performance improvement plan.

(g) A health care entity shall file a performance improvement plan: (1) within 45 days of receipt of a notice under subsection (c); (2) if the health care entity has requested a waiver or extension, within 45 days of receipt of a notice that such waiver or extension has been denied; or (3) if the health care entity is granted an extension, on the date given on such extension. The performance improvement plan shall identify the causes of the entity's spending performance and shall include, but not be limited to, specific strategies, adjustments and action steps the entity proposes to implement to improve spending performance. The proposed performance improvement plan shall include specific identifiable and measurable expected outcomes and a timetable for implementation. The timetable for a performance improvement plan shall not exceed 18 months.

(h) The commission shall approve any performance improvement plan that it determines is reasonably likely to address the underlying cause of the entity's spending performance and has a reasonable expectation for successful implementation.

(i) If the board determines that the performance improvement plan is unacceptable or incomplete, the commission may provide consultation on the criteria that have not been met and may allow an additional time period, up to 30 calendar days, for resubmission.

(j) Upon approval of the proposed performance improvement plan, the commission shall notify the health care entity to begin immediate implementation of the performance improvement plan. Public notice shall be provided by the commission on its website, identifying that the health care entity is implementing a performance improvement plan. All health care entities implementing an approved performance improvement plan shall be subject to additional reporting requirements and compliance monitoring, as determined by the commission. The commission shall provide assistance to the health care entity in the successful implementation of the performance improvement plan.

(k) All health care entities shall, in good faith, work to implement the performance improvement plan. At any point during the implementation of the performance improvement plan the health care entity may file amendments to the performance improvement plan, subject to approval of the commission.

(l) At the conclusion of the timetable established in the performance improvement plan, the health care entity shall report to the commission regarding the outcome of the performance improvement plan. If the commission finds that the performance improvement plan was unsuccessful, the commission shall either: (i) extend the implementation timetable of the existing performance improvement plan; (ii) approve amendments to the performance improvement plan as proposed by the health care entity; (iii) require the health care entity to submit a new performance improvement plan under subsection (c); (iv) waive or delay the requirement to file any additional performance improvement plans or (v) assess a civil penalty to the health care entity of not more than the spending attributable to the health care entity that is in excess of the health care cost growth benchmark minus any savings achieved through the performance improvement plan. A civil penalty assessed under this subsection shall be deposited into the Payment Reform Fund established under section 100 of chapter 194 of the Acts of 2011.

(m) Upon the successful completion of the performance improvement plan, the identity of the health care entity shall be removed from the list of entities currently implementing a performance improvement plan on the commission's website.

(n) The commission may submit a recommendation for proposed legislation to the joint committee on health care financing if the commission determines that further legislative authority is needed to achieve the health care quality and spending sustainability objectives of this act, assist health care entities with the implementation of performance improvement plans, or otherwise ensure compliance with the provisions of this section.

(o) (1) If the commission determines that a health care entity has: (i) willfully neglected to file a performance improvement plan with the commission within 45 days as required under subsection (c); (ii) failed to file an acceptable performance improvement plan in good faith with the commission; (iii) failed to implement the performance improvement plan in good faith; or (iv) knowingly failed to provide information required by this section to the commission or that knowingly falsifies the same, the commission may assess a civil penalty to the health care entity of not more than the spending attributable to the health care entity that is in excess of the health care cost growth benchmark. A civil penalty assessed under this subsection shall be deposited into the Payment Reform Fund established under section 100 of chapter 194 of the Acts of 2011. The commission shall seek to promote compliance with this section and shall only impose a civil penalty as a last resort.

(2) For entities for whom the commission has required a performance improvement plan in the past, in lieu of requiring a performance improvement plan pursuant to this section, the commission may assess a civil penalty on a health care entity identified by the center pursuant to section 18 of chapter 12C if the commission determines that an additional performance improvement plan is not an appropriate remedial measure. The civil penalty may be an amount up to the spending attributable to the health care entity that is in excess of the health care cost growth benchmark and shall be deposited into the Payment Reform Fund established under section 100 of chapter 194 of the Acts of 2011.

(p) The commission shall promulgate regulations necessary to implement this section; provided, however, that notice of any proposed regulations shall be filed with the joint committee on state administration and regulatory oversight and the joint committee on health care financing at least 180 days before adoption.

SECTION 2. Section 13 of said chapter 6D, as so appearing, is hereby amended by striking out subsection (b) and inserting in place thereof the following subsection:-

(b) In addition to the grounds for a cost and market impact review set forth in subsection (a), if the commission finds, based on the center’s annual report, that the percentage change in total health care expenditures exceeded the health care cost growth benchmark in the previous calendar year, the commission may conduct a cost and market impact review of any provider or provider organization identified by the center under section 18 of chapter 12C.

SECTION 3. Chapter 12C of the General Laws is hereby amended by striking out section 18, as appearing in the 2020 Official Edition, and inserting in place thereof the following section:-

Section 18. The center shall perform ongoing analysis of data it receives under this chapter to identify any entity, including but not limited to payers, providers or provider organizations whose: (1) contribution to health care spending growth, including but not limited to spending levels and growth as measured by total medical expense, is considered excessive and who threaten the ability of the state to meet the health care cost growth benchmark established by the health policy commission under section 9 of chapter 6D; or (2) data is not submitted to the center in a proper, timely, or complete manner. The center shall provide a list of such entities to the health policy commission such that the commission may pursue further action under section 10 of chapter 6D and post such list on its website. Referrals under this section shall not preclude the center from using its authority under section 11 of this chapter.

Name:	District/Address:
Rebecca L. Rausch	Norfolk, Worcester and Middlesex