Amendment ID: S3116-24

Amendment 24

HPC Cost Neutrality

Mr. Cronin moves that the proposed new draft be amended in section 8 by striking paragraph (b) and inserting in place thereof the following:-

(b) (1) For the calendar year 2030, the aggregate primary care expenditure target shall be equal to 9 per cent of total health care expenditures in the commonwealth, less spending on all pharmaceuticals, including medically-administered drugs, and the primary care expenditure target shall be equal to 9 per cent of the total health care expenditures attributable to each health care entity, less spending on all pharmaceuticals, including medically-administered drugs.

(2) For the calendar year 2031, the aggregate primary care expenditure target shall be equal to 12 per cent of total health care expenditures in the commonwealth, less spending on all pharmaceuticals, including medically-administered drugs, and the primary care  expenditure target shall be equal to 12 per cent of the total health care expenditures attributable 25 to each health care entity, less spending on all pharmaceuticals, including medically-administered drugs.

(3) For the calendar year 2032, the aggregate primary care expenditure target shall be equal to 15 per cent of total health care expenditures in the commonwealth, less spending on all pharmaceuticals, including medically-administered drugs, and the primary care expenditure target shall be equal to 15 per cent of the total health care expenditures attributable to each health care entity less spending on all pharmaceuticals, including medically-administered drugs,.

(4) For calendar years 2033 and thereafter, if the commission determines that an adjustment in the aggregate primary care expenditure target and the primary care expenditure target is reasonably warranted, the commission may recommend modification to such targets; provided, however, that such targets shall not be lower than 15 per cent of total health care expenditures in the commonwealth less spending on all pharmaceuticals, including medically-administered drugs,.

(5) The commission, in collaboration with the center for health information and analysis, the group insurance commission and the division of insurance, shall monitor the implementation of this section with the goal of ensuring that any increase in primary care spending does not result in an increase in the growth of overall health care expenditure trends or any net new increase in health insurance premiums and cost-sharing. The commission shall hold payers and providers accountable for any such increases pursuant to section 10A.

(6) The commission shall consider the projections of the rate of increase of total health care expenditures in the commonwealth for each given year and shall adjust the aggregate primary care expenditure target and the primary care expenditure targets proportionately.

And further in SECTION 8, by striking in paragraph (c) the language “and (v) other pertinent information or data as may be available to the commission” and inserting in place thereof the following:-

(v) the impact of the aggregate primary care expenditure target and the primary care expenditure target on total health care expenditures and whether the expenditure targets have produced an increase in total health care spending; and (vi) other pertinent information or data as may be available to the commission.

And further by striking SECTION 9, and inserting in place thereof the following new section:-

SECTION 9. Said chapter 6D is hereby further amended by inserting after section 10 the 293 following section:-

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

(b) The commission may, for health care entity identified by the center under section 18 of chapter 12C for its failure to meet the primary care expenditure target or if increased primary care spending results in growth in overall health care expenditure trends or any net new increase in health insurance premiums and cost-sharing, impose corrective measures necessary to ensure compliance with the requirement of Section 9A. Such actions may include, but shall not limited to:

i. Requiring  the health care entity to file and implement a performance improvement plan, pursuant to paragraph (c);

ii. Conducting audits of contracts, payment arrangements, and financial records to assess compliance with primary care expenditure targets and to monitor if increased primary care spending results in growth in overall health care expenditure trends or a net new increase in health insurance premiums and cost-sharing;

iii. Requiring the implementation of site-neutral payments for services that are routinely and safely provided in office settings, including office visits, basic tests and diagnostics, drug administration, and other services as identified by the commission;

iv. Requiring the health care entity to reallocate payments or expenditures to ensure that primary care funding is directed to frontline practices consistent with the requirements of this section;

v. Impose a fine on a health care entity; and

vi. Any other corrective actions the commission deems necessary to promote compliance with the primary care expenditure targets and requirements to prohibit increases in overall health care expenditures and net new increases in premiums and cost sharing.

The Commission shall provide written notice of such corrective action and provide an opportunity for the health care entity to respond within 30 days following receipt of the notice.

(c)The commission shall provide written notice to any health care entity identified by the center under section 18 of chapter 12C for its failure to meet the primary care expenditure target or if increased primary care spending results in growth in overall health care expenditure trends or any net new increase in health insurance premiums and cost-sharing; provided, however, that the growth calculation shall not include pharmaceutical spending. Such notice shall be delivered not more than 45 days after the release of the center’s published annual report pursuant to section 16 of chapter 12C and shall state that the center may analyze the performance of individual health care entities in meeting the primary care expenditure target and the commission shall require certain actions established in this section.

(d) The commission may require any health care entity that is identified by the center under section 18 of chapter 12C for its failure to meet the primary care expenditure target or if increased primary care spending results in growth in overall health care expenditure trends or any net new increase in health insurance premiums and cost-sharing, to file and implement a performance improvement plan; provided, however, that such growth calculation shall not include pharmaceutical spending. The commission shall provide written notice to the health care entity that it is required to file a performance improvement plan not more than 45 days after the release of the center’s published annual report as described in section 16 of said chapter 12C. Not more than 45 days after receipt of such notice, the health care entity shall either: (i) file a performance improvement plan with the commission; or (ii) file an application with the commission to waive or extend the requirement to file a performance improvement plan.

(e) 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 within 15 days of receipt of written notice to the health care entity that it is required 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 may be made public as determined by the commission.

(f) 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) within 15 days of the health care entity’s submission of an application to waive or extend the requirement to file a performance improvement plan, based on a consideration of: (i) the primary care baseline expenditures, costs, price and utilization trends of the health care entity over time and any demonstrated improvement to increase the proportion of primary care expenditures; (ii) ongoing strategies or investments that the health care entity is implementing to invest in or expand access to primary care services or reduce overall health care costs; (iii) if the inability of the health care entity to meet the primary care expenditure target or increased primary care spending can reasonably be considered to be unanticipated and outside of the control of the entity; (iv) the overall financial condition of the health care entity; and (v) other factors the commission considers relevant. If the commission chooses to extend the requirement for a health care entity to file a performance improvement plan in response to an extension request, the deadline for submission of the performance improvement plan by the health care entity shall be at the commission’s discretion.

(g) If the commission denies the request to waive or extend the requirement for the health care entity to file a performance improvement plan, the commission shall provide written notice of such denial to the health care entity not more than 15 days after the health care entity’s submission of such request. Upon receipt of written notice of such denial, the health care entity shall file a performance improvement plan not more than 45 days thereafter.

(h) The commission shall provide to the department of public health any notice requiring a health care entity to file and implement a performance improvement plan pursuant to this section. If a health care entity required to file a performance improvement plan under this section submits an application for a notice of determination of need under sections 25C or 51 of chapter 111, the notice of the commission requiring the health care entity to file and implement a performance improvement plan pursuant to this section shall be considered part of the written record pursuant to said section 25C of said chapter 111.

(i) The performance improvement plan shall identify specific strategies, adjustments and action steps the entity proposes to implement to increase the proportion of primary care expenditures and reduce the growth of overall health care expenditure trends, including non-primary care services and expenditures, and shall include specific identifiable and measurable expected outcomes and a timetable for implementation.

(j) The commission shall approve a performance improvement plan: (i) if it determines the plan is reasonably likely to be successfully implemented and will address the underlying cause of the entity’s inability to meet the primary care expenditure target; or (ii) to limit growth in overall health care expenditure trends or any net new increase in health insurance premiums and cost-sharing to offset growth in primary care expenditures; provided, however, that the growth calculation shall not include pharmaceutical spending.

(k) 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 the entity an additional time period of not more than 30 calendar days to resubmit its performance improvement plan.

(l) Upon approval of a performance improvement plan, the commission shall notify the health care entity to begin its immediate implementation and shall public notice thereof on the commission’s website, identifying that the health care entity is implementing a performance improvement plan. Any health care entity implementing a performance improvement plan shall be subject to such additional reporting, audits and compliance monitoring as may be required by the commission. The commission shall assist health care entities in implementing performance improvement plans.

(m) If the commission chooses not to require a performance improvement plan from a health care entity identified under section 18 of chapter 12C for failure to meet the primary care expenditure target or if increased primary care spending results in growth in overall health care expenditure trends or any net new increase in health insurance premiums and cost-sharing, the commission shall publish a report not more than 45 days after the release of the center for health information and analysis’ published annual report as described in section 16 of chapter 12C, detailing its reasoning for not requiring a performance improvement plan from the health care entity.

(n) 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 which amendments shall be subject to approval of the commission.

(o) At the conclusion of the timetable established in the performance improvement plan, the health care entity shall report to the commission on the outcome of the performance improvement plan. If the performance improvement plan was found to be 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); or (iv) waive or delay the requirement to file additional performance improvement plans.

(p) Upon the successful completion of the performance improvement plan, the identity of the health care entity shall be removed from the commission’s website.

(q) If the commission determines that a health care entity has: (i) willfully neglected to file a performance improvement plan with the commission by the time required in subsection (h); (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 knowingly falsified information required by this section to the commission, the commission may place restrictions, including suspending new member attribution to the health care entity, and may 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 by which the health care entity failed to meet the primary care expenditure target for a third or subsequent violation. The commission shall promote compliance with this section and shall only impose a civil penalty as a last resort.

(r) The commission shall promulgate regulations, consistent with applicable federal laws and regulations, as necessary to implement this section.

(s) Nothing in this section shall be construed to affect or limit the applicability of the health care cost growth benchmark established pursuant to section 9 and the obligations of a health care entity pursuant thereto.