House Passes Landmark Peter V. Kocot Health Care Legislation

Seeks to stabilize the marketplace and increase transparency

(BOSTON) – Representative Malia (D-11th Suffolk) joined her colleagues in the House to pass legislation that seeks to ensure residents across the Commonwealth have access to high-quality health care as the marketplace continues to experience volatility while, at the same time, laying the groundwork for continuous improvement to the Commonwealth’s nationally-leading health care infrastructure.

The Peter V. Kocot Act (PVK Act) builds off the cost containment goals of Chapter 224, Chapter 58, and the Special Commission on Provider Price Variation (PPV Commission) by appropriately recognizing the vital role that community hospitals and community health centers play, both as health care providers and economic drivers. These entities, which traditionally care for underserved populations and those in Gateway Cities and rural areas, will receive both long-term support and a one-time, three-year investment through the Community Hospital Reinvestment Trust Fund (CHRTF). Details of the assessment include:

  • $90 million contribution from hospitals which have less than 60 percent Medicaid patients and more than $750 million in net assets.

  • Up to $247.5 million from health insurers.

In addition to the assessment, the PVK Act raises professional license fees for various medical providers (these fees have not been raised since 2013) and assesses Ambulatory Surgery Centers (ASC) and Urgent Care Centers (UCC) for the first time. This ongoing revenue source will continue to fund CHRTF in perpetuity.

Over the past decade, Massachusetts has experienced a rapid rise in the number of ASCs and UCCs. To increase oversight and gather additional data on this growing sub-sector, the PVK Act requires licensing through the Department of Public Health (DPH) for both types of entities.

The PVK Act empowers consumers by increasing transparency and patient protections at every stage of the health care system. To gain clarity on drug pricing and the role the pharmaceutical industry plays in health care cost-containment, the bill will direct pharmaceutical companies and pharmacy benefit managers (PBMs) to participate in the Health Policy Commission (HPC)'s annual Cost Trends Hearing. It also requires the Center for Health Information and Analysis (CHIA) to consider pharmaceutical data as part of its cost analysis. Additionally, this legislation prohibits “gag clauses” which are currently included in contracts between PBMs and pharmacists, and prevent a pharmacist from informing a consumer that they are able to purchase a drug at a lower price out of pocket.

The PVK Act addresses surprise and out-of-network billing by removing the patient from the middle and, instead, requiring insurance carriers and doctors to come to a resolution on the appropriate rate of payment. Under this legislation, the consumer is no longer responsible for any services provided by an out-of-network doctor in an emergency situation or one where they unknowingly receive care from an out-of-network provider. The doctor will be paid the higher of two amounts: 115 percent of the carrier’s average rate for services rendered, or 125 percent of the Medicare rate. Any dispute would go before an independent board created by the Division of Insurance (DOI) for resolution. In a non-emergency situation where a patient chooses to have an out-of-network doctor, the doctor must disclose to the patient estimated costs before performing the services.

This legislation also supports small business by providing more options for low-cost, high value he