Vote Smart's Synopsis:

Vote to pass a bill that increases oversight over the Massachusetts healthcare market.

Highlights:

• Increases oversight over the Massachusetts healthcare market by amending and broadening the scope of the HPC cost trend hearings to encompass a review of pharmaceutical manufacturers, pharmacy benefit managers (PBMs), PE investors, REITs, and MSOs (Sec. 2-272).

• Requires Registered Provider Organizations (RPO) now must disclose ownership information about PE investors, REITs, and MSOs to HPC (Sec. 2-272).

• Amends the HPC Material Change Notification (MCN) process and now stipulates that the following activities are material changes for providers and provider organizations, in addition to certain mergers, affiliations, and acquisitions, including (Sec. 2-272):

• Significant expansions in capacity;

• Transactions involving a significant equity investor which result in a change of ownership or control;

• Significant transfers of assets, including, but not limited to, real estate sale-leaseback arrangements; and

• Conversion from a non-profit to a for-profit organization.

• Authorizing the HPC to make and refer to the MA AG a report on certain proposed material change transactions, which creates a rebuttable presumption that the provider or provider organization has engaged in unfair or deceptive trade practices (Sec. 2-272).

• Specifies that upon receipt of such a report, the MA AG is permitted to seek legal redress, including injunctive relief, and the proposed material change cannot be completed while that legal action remains pending (Sec. ).

• Expands CHIA’s oversight in the following ways, including (Sec. 2-272):

• As with the HPC, it expands RPO reporting requirements to include PE investors, REITs, MSOs, and certain other entities;

• Increases financial penalties for failure to make timely reports to CHIA;

• Expands hospital financial information reporting and monitoring requirements as to relationships with significant equity investors, REITs, and MSOs; and

• Requires CHIA to notify HPC and DPH of failures to comply with reporting requirements which, in turn, will be considered by HPC and DPH in their review and oversight activities.

• Expands DPH health facility licensure and Determination of Need (DON) oversight and authority in a variety of ways, including (Sec. 2-272):

• Charges DPH with establishing licensure and practice standards for office-based surgical centers and urgent care centers;

• Directs that the Board of Registration in Medicine be under the oversight of DPH in certain ways;

• Amends the DON review process for projects, which will be guided by considerations that include the state health plan, the state’s cost-containment goals, impacts on patients and the community, and comments and relevant data from CHIA, HPC, and other state agencies. DPH may impose reasonable conditions on the DON as necessary to achieve specified objectives, including measures to address healthcare disparities to better align with community needs. The DPH may also consider special circumstances related to workforce, research, capacity, and cost. These special needs and circumstances may pertain to a lack of supply for a region, population, or service line as identified in the state health plan or focused assessments;

• Prohibits DPH from granting or renewing a license for an acute care hospital if its main campus is leased from a REIT. However, any acute care hospital leasing its main campus from a REIT as of April 1, 2024, is exempt from this prohibition;

• Prohibits DPH from granting or renewing a hospital license unless all documents related to any lease, master lease, sublease, license, or any other agreement for the use, occupancy, or utilization of the premises are disclosed to DPH;

• Prohibits DPH from granting or renewing any hospital license unless the applicant complies with all CHIA reporting requirements;  and

• Permits DPH to seek an HPC analysis on the impact of a proposed hospital closure or discontinuation of services.

• Expands the MA AG’s investigatory powers about false claims to encompass document production, answering interrogatories, and providing testimony under oath by provider organizations, significant equity investors, health care REITs, and MSOs. Similarly, and significantly, the MA AG’s authority to seek civil monetary penalties for health care False Claims Act violations is expanded to include those parties that have an ownership or investment interest in a violating party (Sec. 2-272).

• Amends, overhauls, and increases coordination among state agencies like the HPC, DPH, and CHIA, and expands the investigatory and enforcement powers of the MA AG. For-profit investors and REITs must be aware of the following provisions of the Act to avoid civil penalties and state-sanctioned injunctions, and in planning for transactions and investments in Massachusetts, including (Sec. 2-272):

• Increased HPC Oversight: The HPC’s annual cost trend includes reviews of pharmaceutical manufacturers, PBMs, PE investors, REITs, and MSOs. New MCNs (significant expansions, equity investor transactions, asset transfers, and organizational conversions) must be reported to HPC on time;

• Increased CHIA Oversight: CHIA’s scope of oversight for RPOs includes PE firms, REITs, and MSOs. The Act increases financial penalties for providers’ noncompliance and enhances hospital financial reporting. CHIA must inform HPC and DPH of providers’ reporting failures, which will influence HPC and DPH oversight activities;

• Increased DPH Authority: DPH’s oversight now includes the development and implementation of licensure standards for surgical and urgent care centers. DPH may not issue or renew licenses for acute care hospitals leasing their main campus from a REIT, subject to the April 1 exemption, or to a party not in compliance with CHIA reporting requirements. DPH also has increased authority to require information regarding leasing and other operational contracts before issuing a hospital license; and

• Increased MA AG Authority: The MA AG’s powers are expanded to include investigatory and enforcement actions against false claims involving PE investors, REITs, and MSOs.

• Specifies that the provisions of this bill shall become effective 2 years upon passage and approval by the Governor (Sec. 273).

Full Bill Text