HOUSE . . . . . . . . . . . . . . No. 5159
The Commonwealth of Massachusetts
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The committee of conference on the disagreeing votes of the two branches with reference
to the Senate amendments (striking out all after the enacting clause and inserting in place thereof
the text contained in Senate document numbered 2881; and by striking out the title and inserting
in place thereof the following title: “An Act enhancing the health care market review process.”) of
the House Bill enhancing the market review process (House, No. 4653), reports recommending
passage of the accompanying bill (House, No. 5159). December 27, 2024.
John J. Lawn, Jr. Cindy F. Friedman
Frank A. Moran John J. Cronin
Hannah Kane
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FILED ON: 12/27/2024
HOUSE . . . . . . . . . . . . . . . No. 5159
The Commonwealth of Massachusetts
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In the One Hundred and Ninety-Third General Court
(2023-2024)
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An Act enhancing the market review process.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Section 16 of chapter 6A of the General Laws, as appearing in the 2022
2 Official Edition, is hereby amended by striking out, in lines 24 to 26, inclusive, the words “, the
3 division of medical assistance and the Betsy Lehman center for patient safety and medical error
4 reduction” and inserting in place thereof the following words:- and the division of medical
5 assistance.
6 SECTION 2. Section 16D of said chapter 6A, as so appearing, is hereby amended by
7 striking out, in lines 22 to 23, inclusive, the words “in the department of public health established
8 by section 217 of chapter 111” and inserting in place thereof the following words:- within the
9 health policy commission established by section 16 of chapter 6D.
10 SECTION 3. Section 16N of said chapter 6A of the General Laws is hereby repealed.
11 SECTION 4. Section 16T of said chapter 6A of the General Laws is hereby repealed.
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12 SECTION 5. Section 1 of chapter 6D of the General Laws, as appearing in the 2022
13 Official Edition, is hereby amended by inserting after the definition of “Health care provider” the
14 following 2 definitions:-
15 “Health care real estate investment trust”, a real estate investment trust, as defined by 26
16 U.S.C section 856, whose assets consist of real property held in connection with the use or
17 operations of a provider or provider organization.
18 “Health care resource”, any resource, whether personal or institutional in nature and
19 whether owned or operated by any person, the commonwealth or political subdivision thereof,
20 the principal purpose of which is to provide, or facilitate the provision of, services for the
21 prevention, detection, diagnosis or treatment of those physical and mental conditions, which
22 usually are the result of, or result in, disease, injury, deformity or pain; provided, however, that
23 the term “treatment”, as used in this definition, shall include custodial and rehabilitative care
24 incident to infirmity, developmental disability or old age.
25 SECTION 6. Said section 1 of said chapter 6D, as so appearing, is hereby further
26 amended by inserting after the definition of “Health care services” the following 2 definitions:-
27 “Health disparities”, preventable differences in the burden of disease, injury, violence or
28 opportunities to achieve optimal health that are experienced by socially disadvantaged
29 populations.
30 “Health equity”, the state in which a health system offers the infrastructure, facilities,
31 services, geographic coverage, affordability and all other relevant features, conditions and
32 capabilities that will provide all people with the opportunity and reasonable expectation that they
33 can reach their full health potential and well-being and are not disadvantaged in access to health
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34 care by their race, ethnicity, language, disability, age, gender, gender identity, sexual orientation,
35 social class, intersections among these communities or identities, or their socially determined
36 circumstances.
37 SECTION 7. Said section 1 of said chapter 6D, as so appearing, is hereby further
38 amended by inserting after the definition of “Hospital service corporation” the following
39 definition:-
40 “Management services organization”, a corporation that provides management or
41 administrative services to a provider or provider organization for compensation.
42 SECTION 8. Said section 1 of said chapter 6D, as so appearing, is hereby further
43 amended by striking out the definition of “Payer” and inserting in place thereof the following
44 definition:-
45 “Payer”, any entity, other than an individual, that pays providers for the provision of
46 health care services; provided, however, that “payer” shall include both governmental and
47 private entities; and provided further, that “payer” shall include self-insured plans to the extent
48 allowed under the Employee Retirement Income Security Act of 1974.
49 SECTION 9. Said section 1 of said chapter 6D, as so appearing, is hereby further
50 amended by inserting after the definition of “Performance penalty” the following 2 definitions:-
51 “Pharmaceutical manufacturing company”, an entity engaged in the: (i) production,
52 preparation, propagation, compounding, conversion or processing of prescription drugs, directly
53 or indirectly, by extraction from substances of natural origin, independently by means of
54 chemical synthesis or by a combination of extraction and chemical synthesis; or (ii) packaging,
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55 repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that
56 “pharmaceutical manufacturing company” shall not include a hospital licensed under section 51
57 of chapter 111, a wholesale drug distributor licensed under section 36B of chapter 112 or a retail
58 pharmacist registered under section 39 of said chapter 112.
59 “Pharmacy benefit manager”, as defined in section 1 of chapter 176Y.
60 SECTION 10. Said section 1 of said chapter 6D, as so appearing, is hereby further
61 amended by inserting after the definition of “Primary care provider” the following definition:-
62 “Private equity company”, any company that collects capital investments from
63 individuals or entities and purchases, as a parent company or through another entity that the
64 company completely or partially owns or controls, a direct or indirect ownership share of a
65 provider, provider organization or management services organization; provided, however, that
66 “private equity company” shall not include venture capital firms exclusively funding startups or
67 other early-stage businesses.
68 SECTION 11. Said section 1 of said chapter 6D, as so appearing, is hereby further
69 amended by inserting after the definition of “Shared decision-making” the following definition:-
70 “Significant equity investor”, (i) any private equity company with a financial interest in a
71 provider, provider organization or management services organization; or (ii) an investor, group
72 of investors or other entity with a direct or indirect possession of equity in the capital, stock or
73 profits totaling more than 10 per cent of a provider, provider organization or management
74 services organization; provided, however, that “significant equity investor” shall not include
75 venture capital firms exclusively funding startups or other early-stage businesses.
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76 SECTION 12. Section 2 of said chapter 6D, as so appearing, is hereby amended by
77 striking out subsections (b) and (c) and inserting in place thereof the following 2 subsections:-
78 (b)(1) There shall be a board, with duties and powers established by this chapter, which
79 shall govern the commission. The board shall consist of 11 members: 1 of whom shall be the
80 secretary of health and human services, or a designee; 1 of whom shall be the commissioner of
81 insurance, or a designee; 6 of whom shall be appointed by the governor, 1 of whom shall serve as
82 chairperson, 1 of whom shall be selected from a list of 3 nominees submitted by the president of
83 the senate and 1 of whom shall be selected from a list of 3 nominees submitted by the speaker of
84 the house or representatives; and 3 of whom shall be appointed by the attorney general. All
85 appointed members shall serve for a term of 5 years, but a person appointed to fill a vacancy
86 shall serve only for the remainder of the unexpired term. An appointed member of the board
87 shall be eligible for reappointment; provided, however, that no appointed member shall hold full
88 or part-time employment in the executive branch of state government. The board shall annually
89 elect 1 of its members to serve as vice-chairperson. Each member of the board shall be a resident
90 of the commonwealth.
91 (2) The person appointed by the governor to serve as chairperson shall have demonstrated
92 expertise in health care administration, finance and management at a senior level. The second
93 person appointed by the governor, shall have demonstrated expertise in representing hospitals or
94 hospital health systems. The third person appointed by the governor shall have demonstrated
95 expertise in health plan administration and finance. The fourth person appointed by the governor
96 shall be a registered nurse with expertise in the delivery of care and development and utilization
97 of innovative treatments in the practice of patient care. The fifth person appointed by the
98 governor, from the list of nominees submitted by the president of the senate, shall have
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99 demonstrated expertise in representing the health care workforce as a leader in a labor
100 organization. The sixth person appointed by the governor, from the list of nominees submitted by
101 the speaker of the house of representatives, shall have demonstrated expertise in health care
102 innovation, including pharmaceuticals, biotechnology or medical devices. The first person
103 appointed by the attorney general shall be a health economist. The second person appointed by
104 the attorney general shall have demonstrated expertise in health care consumer advocacy. The
105 third person appointed by the attorney general shall have expertise in behavioral health,
106 substance use disorder, mental health services and mental health reimbursement systems.
107 (c) Six members of the board shall constitute a quorum, and the affirmative vote of 6
108 members of the board shall be necessary and sufficient for any action taken by the board. No
109 vacancy in the membership of the board shall impair the right of a quorum to exercise all the
110 rights and duties of the commission. The appointed members of the board shall receive a stipend
111 in an amount not more than 10 per cent of the salary of the secretary of administration and
112 finance under section 4 of chapter 7; provided, however, that the chairperson shall receive a
113 stipend in an amount not more than 12 per cent of the salary of the secretary of administration
114 and finance under said section 4 of said chapter 7. The secretary of health and human services
115 and the commissioner of insurance, or their designees, shall not receive a stipend for their service
116 as board members. A member of the board shall not be employed by, a consultant to, a member
117 of the board of directors of, affiliated with, have a financial stake in or otherwise be a
118 representative of a health care entity while serving on the board.
119 SECTION 13. Section 5 of said chapter 6D, as so appearing, is hereby amended by
120 striking out, in line 10, the words “and (vii)” and inserting in place thereof the following words:-
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121 ; (vii) monitor the location and distribution of health care services and health care resources; and
122 (viii).
123 SECTION 14. Said chapter 6D is hereby further amended by striking out section 6, most
124 recently amended by section 5 of chapter 140 of the acts of 2024, and inserting in place thereof
125 the following section:-
126 Section 6. (a) For the purposes of this section, “non-hospital provider organization” shall
127 mean a provider organization required to register under section 11 that is: (i) a non-hospital-
128 based physician practice with not less than $500,000,000 in annual gross patient service revenue;
129 (ii) a clinical laboratory; (iii) an imaging facility; or (iv) a network of affiliated urgent care
130 centers.
131 (b) Each acute hospital, ambulatory surgical center, non-hospital provider organization,
132 pharmaceutical manufacturing company and pharmacy benefit manager shall pay to the
133 commonwealth an amount for the estimated expenses of the commission.
134 (c) The assessed amount for acute hospitals, ambulatory surgical centers and non-hospital
135 provider organizations shall be not less than 30 per cent nor more than 40 per cent of the amount
136 appropriated by the general court for the expenses of the commission minus amounts collected
137 from: (i) filing fees; (ii) fees and charges generated by the commission; and (iii) federal matching
138 revenues received for these expenses or received retroactively for expenses of predecessor
139 agencies; provided, however, that, to the maximum extent permissible under federal law, non-
140 hospital provider organizations shall be assessed not less than 3 per cent nor more than 8 per cent
141 of the total assessed amount for acute hospitals, ambulatory surgical centers and non-hospital
142 provider organizations. Each acute hospital, ambulatory surgical center and non-hospital
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143 provider organization shall pay such assessed amount multiplied by the ratio of the acute
144 hospital’s, ambulatory surgical center’s or non-hospital provider organization’s gross patient
145 service revenues to the total gross patient service revenues of all such hospitals, ambulatory
146 surgical centers and non-hospital provider organizations. Each acute hospital, ambulatory
147 surgical center and non-hospital provider organization shall make a preliminary payment to the
148 commission on October 1 of each year in an amount equal to 1/2 of the previous year’s total
149 assessment. Thereafter, each acute hospital, ambulatory surgical center and non-hospital provider
150 organization shall pay, within 30 days’ notice from the commission, the balance of the total
151 assessment for the current year based upon its most current projected gross patient service
152 revenue. The commission shall subsequently adjust the assessment for any variation in actual and
153 estimated expenses of the commission and for changes in acute hospital, ambulatory surgical
154 center and non-hospital provider organization gross patient service revenue. Such estimated and
155 actual expenses shall include an amount equal to the cost of fringe benefits and indirect
156 expenses, as established by the comptroller under section 5D of chapter 29. In the event of late
157 payment by any such acute hospital, ambulatory surgical center or non-hospital provider
158 organization, the treasurer shall advance the amount of due and unpaid funds to the commission
159 prior to the receipt of such monies in anticipation of such revenues up to the amount authorized
160 in the then current budget attributable to such assessments and the commission shall reimburse
161 the treasurer for such advances upon receipt of such revenues. This section shall not apply to any
162 state institution or to any acute hospital which is operated by a city or town.
163 (d) To the maximum extent permissible under federal law, and provided that such
164 assessment will not result in any reduction of federal financial participation in Medicaid, the
165 assessed amount for pharmaceutical manufacturing companies shall be not less than 5 per cent
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166 nor more than 10 per cent of the amount appropriated by the general court for the expenses of the
167 commission minus amounts collected from: (i) filing fees; (ii) fees and charges generated by the
168 commission; and (iii) federal matching revenues received for these expenses or received
169 retroactively for expenses of predecessor agencies. Each pharmaceutical manufacturing company
170 shall pay such assessed amount multiplied by the ratio of MassHealth’s net spending for the
171 manufacturer’s prescription drugs used in the MassHealth rebate program to MassHealth’s total
172 pharmacy spending.
173 (e) To the maximum extent permissible under federal law, and provided that such
174 assessment will not result in any reduction of federal financial participation in Medicaid, the
175 assessed amount for pharmacy benefit managers shall be not less than 5 per cent nor more than
176 10 per cent of the amount appropriated by the general court for the expenses of the commission
177 minus amounts collected from: (i) filing fees; (ii) fees and charges generated by the commission;
178 and (iii) federal matching revenues received for these expenses or received retroactively for
179 expenses of predecessor agencies. Each pharmacy benefit manag