FIRING A SHOT across the bow of the state’s leading hospital networks, the House voted nearly unanimously on Wednesday to give a state health commission more authority to scrutinize expansion plans – and to give community hospitals what amounts to veto power over efforts by large hospital systems to encroach on their service area. The bill was passed as Mass General Brigham, the state’s largest provider system, is planning a controversial expansion into the suburbs, and can be seen as a clear message to the hospital system.
“This plan will address disparities in health care systems and promote equitable access to high-quality affordable care,” said Rep. John Lawn, a Watertown Democrat who chairs the Committee on Health Care Financing, speaking on the House floor. “We can’t allow hospitals and health system to simply open in various communities without undergoing due scrutiny.”
As the House envisions expanding the power and responsibilities of the Health Policy Commission, House Speaker Ron Mariano also said he wants to explore new ways to increase funding for the commission.
“We’re asking the Health Policy Commission to do more and more with every piece of legislation we pass in health care right now,” Mariano said on the House floor. “They have become an important backstop to price expansion in the health industry. Because of that, I think it might be time to revisit how we funded the HPC.”
The bill, which passed by a vote of 158-1, would impose additional regulatory requirements on hospitals seeking to expand into new locations. The bill aims to protect community hospitals by limiting the ability of larger health systems to draw away their patients.
The sole no vote was Rep. Nicholas Boldyga, a Southwick Republican.
Specifically, the bill would give the Health Policy Commission more authority to scrutinize hospital expansions to determine their market impact. That information would then be used in deciding whether to allow the expansion to move forward.
Currently, the Health Policy Commission reviews proposed mergers, but not always expansions. Under the House bill, filed by Rep. Paul Donato, a Medford Democrat, and spearheaded by Mariano, any hospital that seeks to build a new clinic or ambulatory surgery center would be subject to a Health Policy Commission review focused on cost and market impact. This review would then become part of the record that is considered by the Department of Public Health in deciding whether to approve a license for the expansion. The report could also be referred to the attorney general for potential action under consumer protection laws, if the Health Policy Commission determines that the change would result in a dominant market share, higher prices, and higher total medical expenditures.
The bill also requires that in a case when a health care system is building a project in an area already served by an independent community hospital that the system obtain a letter of support from the independent hospital’s CEO and board chair – effectively giving independent hospitals the ability to scuttle an expansion.
The bill also revives a Health Planning Council to examine the state’s current and future health care needs.
The Mariano-backed funding amendment, introduced by Rep. Michael Day, a Stoneham Democrat, and passed on a voice vote, would create a five-person task force charged with reviewing the existing funding mechanisms of the Health Policy Commission, identifying additional funding needs, and considering new funding sources, including from sectors of the health care industry that it may deem appropriate to charge in order to fund the commission. The task force, which would include the Health Policy Commission’s executive director, would have to file a report by June 1, 2022.
Mariano said when the Health Policy Commission was first proposed in 2012, funding for its operation was going to come one-third from hospitals, one-third from insurers, and one-third from the state. But then-Gov. Deval Patrick vetoed the state contribution, leaving the hospitals and insurers paying annual fees of $13 million to the commission. Mariano said lawmakers are now talking about giving the commission a bigger role in overseeing areas including pharmaceutical spending, the medical device industry, and hospital expansions. “As we continue to talk about expanding the duties of the HPC, it’s incumbent we begin to look at different ways to expand the funding,” Mariano said.
The bill would apply retroactively to an applicant that is already going through the existing licensing process for an expansion – which would cover Mass General Brigham’s proposed expansion into Westborough, Woburn, and Westwood, as well as an expansion proposed by Boston Children’s Hospital into the southern and western Boston suburbs.
The Mass General Brigham expansion in particular has raised concerns about whether it will draw higher-paying commercially insured patients into its facilities to the detriment of existing providers, like UMass Memorial, which would be left with less lucrative Medicaid and Medicare patients. Mass General Brigham says the expansion is a way to bring more convenient care to patients, who would no longer have to travel into Boston for their health care.
John Fernandez, president of integrated care at Mass General Brigham, wrote a letter to House members on Tuesday opposing the bill, which he said “threatens to delay and potentially deny our patients access to healthcare in their own community for many of the same services they currently travel to our Boston hospitals to receive.”
Fernandez said polling has shown enormous community support for the expansion, which would bring a range of primary care and specialty services to the suburbs. “Not only do our patients want more care closer to their home but given the capacity challenges every hospital in Massachusetts is facing, the state should also be adding more access to care – not reducing it,” Fernandez said.
Fernandez called the bill “a misguided 11th-hour intervention” into a long-standing state approval process, which the health system has already spent nine months navigating. “Changing the rules in the middle of this process does a tremendous disservice to the patients we serve in these communities,” he wrote.
On the other side of the issue are community hospital officials who support the legislation. Kim Hollon, president and CEO of Signature Healthcare, the parent of Brockton Hospital, wrote in testimony to the Legislature this week that the existing licensing process has proven insufficient to prevent well-financed academic medical centers from expanding and leaving hospitals like Brockton with more low-income, high-Medicaid populations – which translates to less money for the hospital.
Because academic medical centers, like those operated by Mass General Brigham, charge more than community hospitals, expansion could also drive up health care costs overall in the state.
“We cannot continue to allow the unfettered expansion of higher paid providers into regions of the Commonwealth that are already well served by more moderately cost providers that serve the whole region and a comprehensive both socio-economic and racially diverse population,” Hollon wrote.
Hollon said the weak approval process is “building a health system of ‘have’ hospitals serving upper income, predominantly white and commercially insured patients and ‘have not’ hospitals serving lower income, people of color relying on health coverage that does not cover the cost of care but rather has significant shortfalls that cannot be offset by commercial insurance rates.”
The bill now goes to the Senate for consideration. Wednesday was the last day of formal sessions before lawmakers take a break through the end of the year. So if the Senate does take up the bill, it will not be until 2022. So far, senators have been primarily focused on passing their own bill on improving mental health care, which the Senate passed on Wednesday and which will now go to the House.
An earlier version of this story misstated the size of the fees insurers and hospitals pay to fund the HPC, based on incorrect information included in Mariano’s comments.