Joint Committee on Health Care Financing
The Massachusetts Health & Hospital Association (MHA), on behalf of its member hospitals, health systems, physician organizations, and allied healthcare providers, appreciates this opportunity to offer comments on HB1139/SB672, An Act relative to the closing of hospital essential services. MHA respectfully urges the committee to reject this legislation as the specifics within related to public notice of a closure of an essential service are already included in the recent amendments to the hospital licensure regulatory changes issued by the Department of Public Health (DPH). In addition, this legislation puts in place barriers that may prevent hospitals from making strategic plans to merge or consolidate services within an integrated care delivery system, such as an Accountable Care Organization.
In April of 2017, DPH issued revised licensure regulations that require hospitals to provide specific operational and access information related to any pending closure of an essential service. Similar to the directives of HB1139/SB672, the DPH regulations require a hospital to provide notice to their employees, the general public, legislators, and any state agency that may be affected by the closure. In addition, a hospital must submit this information to the Health Policy Commission, which has the authority to share the information with the Attorney General’s office for further review.
MHA is concerned that HB1139/SB672 significantly extends the hospital notice period from 90 days to a full calendar year, and increases the number of stakeholders from communities outside of the hospital’s service area that must be contacted with notices of the service closure. While the hospital community is committed to working within the requirements of the DPH regulations, we are troubled by the increased administrative costs and staff time necessary to meet the additional reporting and notice provisions in HB1139/SB672.
Ensuring that all patients have appropriate access to medically necessary acute and emergency level care always has been a priority for our members. However, the pressures created by continued underfunding of reimbursement for services, administrative barriers to coverage for services, and increased unfunded government mandates creates substantial problems for hospitals in fulfilling new requirements and covering the cost of care. Compounding these issues are providers’ continued efforts to manage ever-rising pharmaceutical costs, address increased workforce demands and wage updates, make necessary investments to maintain or purchase new technologies, and preserve aging facilities. These challenges present even more dire consequences for hospitals that serve large populations of patients with publicly subsidized coverage. Because of these pressures, it is critical that hospitals have the flexibility to make strategic decisions, which may include decreasing or merging services and programs. Communities rely on hospitals to provide acute and emergency level care for their residents, and hospitals must have the ability to make efficient changes to meet these needs.
While delaying the overall planning process by increasing the closure of the essential health services review period from 90 days to a full year, HB1139/SB672 also requires hospitals to develop and manage a new, non-governmental community oversight committee comprised of a representative from each municipality to which the hospital provides services. This committee also includes non-managerial employees, including registered nurses and ancillary staff from the hospital, and a representative from a local interfaith organization charged to review, comment, and consider any plan approved by DPH. The community oversight group is then empowered to inform DPH when a hospital does not execute and follow the plan. This would mean that hospitals that are already understaffed and facing significant financial problems would then take on a year-long committee deliberation process, and manage a complex number of stakeholders as part of a required process – while still continuing to provide healthcare services. Requiring the development and management of such an oversight committee is unprecedented and costly, and the bills lack any directives aimed at actually improving the financial health of a hospital or enhancing the reimbursement rates necessary to support the staffing, operational, and facility costs required to sustain the service in question.
Equally troublesome, under HB1139/SB672, if a hospital were to execute a plan to discontinue a service without the approval of DPH, the Attorney General would be empowered to seek an injunction to require that the service be maintained for the year-long notice period without providing the increased resources needed to maintain the service. Additionally, the hospital would not be eligible to have a determination of need or other licensure application approved for a period of three years from the date that the service is discontinued, until the essential health service is restored or until DPH is satisfied that a plan is in place to ensure access to necessary services for patients in the hospital service area. This prevents facilities from developing new or modifying existing services that may better reflect the needs of the local community.
By ignoring the systemic issues that are forcing hospitals to balance the preservation of services, HB1139/SB672 would likely exacerbate fragile hospital financial challenges through the imposition of new restrictions and penalties. While perhaps unintended, the consequences this legislation poses to the healthcare services of local communities and the continued viability of distressed hospitals would be severe. For these reasons, MHA urges you to oppose HB1139/SB672.
Thank you for the opportunity to offer comments on this important matter. If you have any questions or require further information, please contact Michael Sroczynski, MHA's Senior Vice President of Government Advocacy at (781) 262-6055 or msroczynski@mhalink.org