Massachusetts Takes a Next Step in Health Reform: Addressing Affordability through Value

States are incrementalists – enacting laws, amending them, and building on their successes – and that strategy is clearly visible in Massachusetts Gov. Charlie Baker’s bold and comprehensive legislative proposal, An Act to Improve Health Care by Investing in VALUE, announced last week.

Baker’s proposal calls on payers and providers to increase expenditures on primary and behavioral health care by 30 percent systemwide over the next three years while complying with the state’s cost growth benchmarks, administered by the state’s Health Policy Commission. Baker said his proposal “will change the way the system looks, works and operates,” by prioritizing preventative care and early intervention and managing chronic conditions before patients require costly emergency department services.

The proposal includes initiatives to implement those expanded investments, including changes in workforce policies and scope of practice laws. At the same time, the governor proposes strengthening enforcement of cost-growth benchmarks by authorizing financial penalties on those who exceed them. 

Additional proposals tackle affordability by:

• Prohibiting surprise billing for emergency and unplanned services and establishing an out-of-network default rate pegged at a percentage of Medicare and limiting the use of facility fees;
• Advancing insurance market reforms to improve access for small businesses and examining the impact of the state’s law that merges the individual and small group market; and
• Building on last year’s efforts to rein in drug prices. The proposal subjects manufacturers of certain high-cost drugs to Health Policy Commission review, requires those manufacturers to participate in cost trend hearings, expands oversight of pharmacy benefit managers, and most significantly, imposes a penalty on manufacturers that increases a drug’s price by more than 2 percent over the consumer price index in any year.

The proposed legislation includes provisions that address telemedicine, the health information exchange, and investments in safety net providers – including plans to stabilize distressed community hospitals and health centers.

Insurers would also be required to maintain accurate provider directories and be required to cover, with no additional costs, same-day behavioral health visits. Urgent care clinics would also be required to offer behavioral health services.

“For far too long, primary and behavioral health care has not been at the forefront of our health care system,” said Marylou Sudders, Massachusetts’ secretary of the Executive Office of Health and Human Services. “While we know that changing the narrative will take time, we are committed to engaging in a multi-year, multi-pronged approach to create a cohesive system of behavioral health care and strong primary care in the Commonwealth.”

The governor’s bill now heads to the state Legislature where debate is expected to be lively. The National Academy for State Health Policy (NASHP) will track and report on developments. To learn more about the plan, NASHP is planning to host a webinar with Sudders, who also sits on the Health Policy Commission board, soon.