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 health plans and creating a study to improve the merged market. Small business owners and their employees will now have more choices when selecting health insurance plans and will have more information, presented in a clear and uniform manner, on which providers and services are available to them. The bill also promotes the use of telemedicine, which expands access to care and provides consumers with new choices on how they receive care. A study that will look at the current dynamic of the merged market will yield recommendations to reduce barriers and improve the shopping experience for both small businesses and individuals.
Understanding the complexities of scope of practice proposals, the PVK Act creates an objective, data-driven process to determine when an expansion of scope is advisable. Under this legislation:
A joint committee of the Legislature will be able to request an objective review of any scope proposal by CHIA.
CHIA would have 180 days to examine the current scope of a licensed profession and, with input from the Betsy Lehman Center, gather data and analyze information on safety and cost regarding a proposed expansion.
Once the objective analysis is completed, the report is sent to the HPC for its review. The HPC then makes a recommendation to the Legislature within 90 days.
The PVK Act also reauthorizes the Prevention and Wellness Trust Fund (PWTF), created in Chapter 224, under the HPC with new reporting requirements. Funded through a transfer of funds from CHIA and new recreational marijuana revenue, the PWTF will focus its efforts on increasing access to community-based prevention services, reducing the impact of health condition drivers, and developing a stronger evidence base for effective prevention programming. A portion of the PWTF grants will go to regional grants to ensure that prevention dollars are dispersed throughout the Commonwealth.
Provider directories, which patients use to select providers that accept their health insurance, will now be subject to more rigorous standards to ensure the accuracy of the information and that changes are made in a timely fashion. A new task force will provide recommendations on how to make provider directories more consumer friendly and easily searchable.
Several other new commissions will examine administrative costs in health care, availability and quality of nursing homes, and barriers to foreign medical professionals practicing in Massachusetts.
The Peter V. Kocot Act now goes to the Senate for consideration.