Bill provides checks and balances to mitigate systemic disruption in care access

BOSTON (2/3/2025)—Recently, the Massachusetts Legislature passed legislation that will close loopholes in the health care market regulatory process and increase financial transparency by gathering more information regarding hospital finances, and assist in maintaining a more stable and sustainable health care system.

“It is important that we as a Commonwealth takes steps to increase oversight of an industry so central to the daily lives of our constituents.” said Senator Nick Collins (D-Boston) “The vitality of our healthcare system is essential to the health of our citizens and our economy. This legislation ensures that the right checks and balances are in place to mitigate and minimize systemic disruption to accessing critical care.”

Strengthening Oversight

The bill makes important updates to the Commonwealth’s laws governing the oversight of hospital systems and provider organizations. Oversight measures include:

• Bolstering the reporting authority of the Center for Health Analysis and Information (CHIA) and scope of the oversight of the Health Policy Commission (HPC) by adding reporting requirements for hospitals and registered provider organizations (RPOs), including significant equity investors. Audited financial statement reporting is mandated for out-of-state operators of a hospital or RPO parent company, private equity investors, and management services organizations (MSOs).
• Enhancing penalties for not complying with CHIA data reporting requirements, including increasing and removing the cap on financial penalties.
• Requiring CHIA to notify HPC and the Department of Public Health (DPH) of failure to report, which will be considered during a review by the HPC in the Cost and Market Impact Review (CMIR) process and by DPH when considering a Determination of Need (DON) application or when reviewing licensure and suitability.
• Expanding DPH authority over the Board of Registration in Medicine to improve oversight and align Board activities with broader state market oversight goals.
• Requiring DPH to hold a public hearing prior to hospital and essential service closures, and authorizing DPH to seek an impact analysis of a hospital closure of any essential health service from HPC.

The bill expands the Attorney General’s authority to monitor health care trends and enforce the False Claims Act by allowing the office to seek information from significant equity investors, real estate investment trusts (REITs), and MSOs, and to hold entities with an ownership or controlling interest in a provider organization liable if they are aware of false claims submitted to the government.

Increasing Financial Transparency & Addressing the Rising Cost of Health Care

To address the rising cost of health care in Massachusetts, the bill reforms the HPC and expands the HPC cost trends examination while also raising expectations on providers to meet the Commonwealth’s cost containment goals. Provisions to combat the rising costs of health care include:

This bill broadens CHIA’s duty to monitor acute hospitals’ financial conditions by requiring them to file margins, investments, and information on any relationships with significant equity investors, health care REITs, and MSOs. It also codifies DPH regulation to pause the DON timeline for an independent cost analysis (ICA), CMIR, and performance improvement plan and authorizes DPH to choose the entity conducting the ICA from a list of three entities submitted by the applicant.

Stability and Sustainability 

The bill moves state health resource planning to the HPC by establishing a new Office of Health Resource Planning to produce a state health plan as a forecast of anticipated demand, production, supply and distribution of health care resources on a state-wide and regional basis. The office will also conduct focused assessments of supply, distribution and capacity in relation to projected need of health care services.

The bill directs DOI to consider affordability when reviewing rates, while adhering to principles of actuarial soundness and solvency. It also creates a Primary Care Task Force to make recommendations to improve primary care access, delivery, and financial stability. The task force comprises 25 members and is chaired by the HPC and Executive Office of Health and Human Services (EOHHS). The task force’s recommendations will include defining primary care services, creating standardized data reporting, establishing a primary care spending target for public and private health care payers, assessing impacts of health plan design on health equity, and devising ways to increase the primary care workforce and improve employment conditions. The state will publish relevant data on a primary care dashboard maintained by CHIA and Massachusetts Health Quality Partners.