SECTION 1. Chapter 6D of the General Laws, as so appearing, is hereby amended by inserting after subsection (b) of section 10 the following subsection:-

(c) The commission may require a performance improvement plan to be filed with the commission for a health care entity that is identified by the center under section 18 of chapter 12C.

SECTION 2. Chapter 6D of the General Laws, as so appearing, is hereby amended by striking out subsection (q) of section 10 and inserting in place thereof the following subsection:-

(q) 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 (d); (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 or falsified information required by this section to the commission, the commission may: (A) assess a civil penalty to the health care entity of not more than $500,000 for a first violation, not more than $750,000 for a second violation and not more than the amount of spending attributable to the health care entity that is in excess of the health care cost growth benchmark for a third or subsequent violation; provided, however, that a civil penalty assessed pursuant to one of the above clauses shall be a first offense if a previously assessed penalty was assessed pursuant to a different clause; (B) stay consideration of any material change notice submitted under section 13 of this chapter by the health care entity or any affiliates until the commission determines that the health care entity is in compliance with this section; and (C) notify the department of public health that the health care entity, if applying for a notice of determination of need, is not in compliance with this section. A civil penalty assessed under this subsection shall be deposited into the Healthcare Payment Reform Fund established under section 100 of chapter 194 of the acts of 2011. Except as otherwise expressly authorized under this section, the commission shall seek to promote compliance with this section and shall only impose a civil penalty as a last resort.

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

Section 18. (a) For the purposes of this section, “health care entity” shall mean a clinic,

hospital, ambulatory surgical center, physician organization, carrier or an accountable care organization required to register under section 11.

(b) The center shall perform ongoing analysis of data it receives under this chapter to identify any health care entity whose:

(1) contribution to health care spending levels and growth, including but not limited to, spending levels and growth as measured by health status adjusted 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; provided, that the center shall identify cohorts for similar health care entities and establish differential standards for excessive growth rates, based on a health care entity’s baseline spending, pricing levels and payer mix; or

(2) data is not submitted to the center in a proper, timely or complete manner.

(c) The center shall confidentially provide a list of the health care entities to the health policy commission such that the commission may pursue further action under section 10 of

chapter 6D. Confidential referrals under this section shall not preclude the center from using its authority to assess penalties for noncompliance under section 11.

SECTION 4. The fifth paragraph of section 4 of chapter 176B of the General Laws, as so appearing, is hereby amended by striking out the first sentence and inserting in place thereof the following sentences:- Under such a group medical service agreement, subscription certificates and the rates charged by the corporation to the subscribers shall be filed with the commissioner within thirty days after their effective date. The commissioner shall approve, modify or disapprove any proposed changes to rates; provided, however, that the commissioner shall only modify or disapprove any proposed changes to rates that are excessive, inadequate or unfairly discriminatory; provided, further, that group plan contracts issued and rates charged by a nonprofit medical service corporation to its subscribers providing supplemental coverage to medicare shall be subject to the provisions of chapter one hundred and seventy-six K if the subscribers, and not their employer, employers or representatives, are billed directly for such contracts. No classification of risk may be established on the basis of age.

SECTION 5.  The first paragraph of section 16 of chapter 176G of the General Laws, as so appearing, is hereby amended by inserting after the second sentence the following sentence:- The commissioner shall approve, modify or disapprove rates; provided, however, that the commissioner shall only modify or disapprove rates that are excessive, inadequate or unreasonable in relation to the benefits charged.

SECTION 6. Subsection (c) of section 6 of chapter 176J of the General Laws, as so appearing, is hereby amended by striking out the second sentence and inserting in place thereof the following sentence:- The commissioner shall approve, modify or disapprove any proposed changes to base rates; provided, however, that the commissioner shall only modify or disapprove any proposed changes to base rates that are excessive, inadequate or unreasonable in relation to the benefits charged.

SECTION 7. The first paragraph of subsection (d) of section 7 of chapter 176K of the General Laws, as so appearing, is hereby amended by striking out the second sentence and inserting in place thereof the following sentence:-  The commissioner shall approve, modify or disapprove the proposed rates; provided, however, that the commissioner shall only modify or disapprove any proposed rates that are excessive, inadequate or unreasonable in relation to the benefits charged.