INSIDE THE ISSUE

> Senate Action on Safety Net
> HPC on Hospital to Home
> Improving the EMS System
> 340B Legislation Coming

MONDAY REPORT

Senate Approves Supplemental Budget with Relief for Safety Net

The ongoing process to repair the healthcare system in Massachusetts, and specifically the overburdened Health Safety Net Fund, received its latest boost last week when the Massachusetts Senate passed a $2.25 billion supplemental budget to close out Fiscal Year 2025. The bill now moves to conference committee.

The “supp” contains a $50 million assessment or tax on hospitals, which will support increased Medicaid and Health Safety Net spending and result in an increase in the federal Medicaid matching funds the state will receive. The proposal the Senate approved, and which the House voted on favorably earlier this month, also contains a $50 million transfer from the Commonwealth Care Trust Fund to the Health Safety Net fund in each of Fiscal Years 2026 and 2027. Ultimately, the plan generates $100 million for the Health Safety Net program, and $112 million in supplemental Medicaid payments to hospitals. Separate from the new Health Safety Net and hospital Medicaid spending related to the assessment, the budget provides $2.046 billion to the Medicaid program for FY2025, of which $1.5 billion is funded by the federal government.

Sen. Cindy Friedman (D-Arlington), the co-chair of the Joint Committee on Health Care Finance, said during the Senate debate on the bill last Thursday that the hospital community deserves credit for “leading by example” on the bill. “They stood up and said, ‘We’re going to give an increase in our assessment so we can be equal partners so we can try to keep this safety net stable and going’,” Friedman said.

Last week’s action follows Governor Healey’s September 22 signing of another supplemental bill that directed $77 million to the Health Safety Net for Fiscal Year 2025 and an additional $122 million to support high public payer hospitals.

The Health Safety Net pays hospitals and health centers for care provided to those who are uninsured and underinsured. It is funded annually by a $165 million tax on both hospitals and health insurers and $15 million in state funding. In nearly every year since its establishment in 2006, the Health Safety Net fund has run a deficit, meaning the cost of care to those it serves exceeds the money from the hospital-insurer-state assessment. By statute, hospitals alone bear the shortfall in funding. Even with the FY2025 relief, the Health Safety Net still faced a shortfall of approximately $207million. With the relief in the supplemental budget approved last week, the Heath Safety Net deficits are still projected to exceed $210 million and $240 million in FY26 and FY27, respectively – placing further strain on hospitals and health systems.

While Senate President Karen Spilka (D-Ashland) along with Friedman, and Ways & Means Chair Michael Rodrigues (D-Westport) helped marshal the supplemental budget and the innovative assessment/HSN relief through the Senate, Spilka expressed concern about the overall state of the Massachusetts healthcare system, and the need to take a “deep dive” to address the HSN. She told the State House News Service, “We are looking at a lot of issues in healthcare, recognizing we need some short-term fixes, but that there needs to be some long-term solutions, and some changes. We’re in a very critical state with our healthcare coupled with what the federal impact will be.”

MHA President & CEO Steve Walsh thanked the Senate for its leadership on the issue and said the quick and coordinated action from legislative leaders and the Healey-Driscoll administration reflected the urgent effort to protect the economic and medical viability of the Massachusetts healthcare system.

He also shared Spilka’s concern with the overall direction of the healthcare cost trend in the state, saying, “The layoffs and cutbacks experienced in both the provider and insurer spheres, the rising premiums felt among families and employers – including hospitals and health systems, which are among the largest purchasers of insurance in the state – and the continuing threat of further funding cuts all demand a new, collective effort in Massachusetts to resolve the healthcare affordability and access issues. That is why these actions from the legislature and Healey-Driscoll administration over the past month have been especially meaningful.”

HPC’s PATHways Investment Aims at Helping Capacity Crisis

The Health Policy Commission (HPC) last Thursday announced a $1.47 million investment to provide bridge funding to eligible community hospitals that are creating or sustaining hospital-to-home programs.

The new investment program builds upon the Executive Office of Aging & Independence’s (AGE’s) Hospital to Home Partnership Program that was supported by federal American Rescue Plan Act (ARPA) dollars during the height of the pandemic. That funding lapsed, so the HPC is now proposing bridge funding to create long-term sustainability for these services through the PATHways investment program.

PATHways will support the position of a Home and Community-Based Services (HCBS) liaison from one of the state’s 24 local Aging Services Access Points (ASAPs), who will be embedded within the hospital setting. These professionals will help coordinate a more efficient discharge for patients to the community or home setting.

The HPC will fund seven programs with $210,000 each and the chosen hospitals will make an additional $90,000 in-kind contribution. The program will run over two years and will be evaluated through qualitative data (that is, how do patients, families, and case managers assess it?) as well as quantitative data (such as, is the program reducing readmissions or length of stay and is it improving patient throughput?). A request for proposals, now being drafted, is tentatively expected in late November-early December with responses due in January 2026.

The state’s Transitions from Acute Care to Post Acute Care Task Force (TACPAC) had recommended earlier this year that AGE’s hospital-to-home program be made permanent – a factor that the HPC cited in its creation of PATHways. Currently in Massachusetts, according to MHA’s monthly survey of hospitals, as many as 2,000 patients statewide remain hospitalized or “stuck” in inpatient beds despite being medically ready for discharge.

“We are grateful to the leadership of AGE Secretary Robin Lipson, HPC Executive Director David Seltz, and the partnership of Mass Aging Access Executive Director Betsey Crimmins for their work to ensure that hospital-ASAP partnerships can flourish,” said MHA’s Senior Director of Virtual Care & Clinical Affairs Adam Delmolino, who was a member of the TACPAC.

State House Hearing Today: Improving EMS

Emergency Medical Services (EMS) personnel are often “first on the scene,” providing lifesaving care, or helping to control people in distress from injury or behavioral health crises, or, in many cases, providing essential healthcare transportation between care sites.

But EMS costs are rising, they’re facing workforce shortages, and they’re fighting for fair reimbursement like many other sectors of the healthcare ecosystem.

A series of bills is now pending at the State House to address EMS issues, and one such bill – H.1198/S.746, An Act to Improve Patient Access to Non-Emergency Medical Transportation – is an MHA priority and is scheduled for a hearing today before the Joint Committee on Financial Services.

H.1198/S.746, sponsored by Rep. Daniel Hunt (D-Boston) and Sen. Paul Feeney (D-Foxborough), would ease the strain on EMS by streamlining insurance and payment processes that affect patient transport. The proposal would ensure that insurance prior authorizations for patient transportation remain valid for at least three business days. This recognizes the fact that prior auths are often given, but that the actual transport could be delayed unexpectedly by reasons beyond a provider’s control. The bill would also strengthen the financial stability of EMS agencies by requiring MassHealth to provide adequate reimbursement for non-emergency medical transportation related to behavioral health, dialysis, and post-acute care.

“When you reduce these administrative barriers and support the sustainability of EMS services, you improve patient access to care and ultimately lower costs for the entire system,” said MHA’s V.P. of Government Advocacy & Public Policy Emily Dulong.

Senate HELP Committee Split on Changes to 340B

Last Thursday, the U.S. Senate Committee on Health, Education, Labor, and Pensions (HELP) convened a hearing titled “The 340B Program: Examining Its Growth and Impact on Patients.” The hearing explored the complexities of the 340B drug pricing program, weighing its original intent of supporting eligible healthcare organizations in their mission to provide services to high numbers of uninsured and low-income patients, against concerns about its rapid growth.

340B was created as a bipartisan program to protect hospitals from high drug costs, while allowing them to reinvest scarce resources into underserved communities. It requires pharmaceutical manufacturers to sell outpatient drugs at discounted prices to organizations caring for uninsured and low-income patients. It is a heavily regulated program that comes at no cost to taxpayers. While 340B funding accounts for just 3% of drug companies’ global revenues, the program has been under increasing attack from well-funded pharmaceutical interests in recent years.

Several HELP committee members on both sides of the aisle emphasized the importance of 340B. Senator Edward Markey (D-Mass) noted how the program keeps healthcare organizations afloat, while Senator Tommy Tuberville (R-Ala.) argued that the 340B program should be expanded rather than constrained. Others voiced support for the program but called for reforms to improve transparency and ensure savings were spent on improving services for patients, including a bipartisan group of Senators loosely described as the “Gang of Six” who have traditionally sought to address some of the program’s criticism while protecting the program overall.

One such Gang of Six member, Senator Tammy Baldwin (D-Wisc.), said that in the coming weeks the group expects to introduce a bill that would implement new requirements on the 340B program. Conversely, HELP Chair Bill Cassidy (R-La.) sharply criticized the program, arguing that 340B’s growth drives higher costs, incentivizes provider consolidation, and often benefits middlemen rather than patients. He concluded that the program “has lost its way.” Cassidy has also indicated he is preparing 340B legislation.

Markey used the hearing to note that hospitals in Massachusetts are in financial straits with more than 60% operating in the red and with further losses expected as a result of provisions in the recently passed One Big Beautiful Bill Act. He further tied the expiring enhanced Advanced Premium Tax Credits to the worrisome financial outlook stating, “Hospitals that survive will have to find a way to balance the books while caring for a surge in uninsured patients … The ticking time bomb is about to go off.”

340B is also facing intensifying threats at the state level, just as the commonwealth’s hospitals and health systems brace for the financial headwinds of new Medicaid policies. MHA members are pushing for legislation that would protect 340B providers from a growing volume of discriminatory practices among drug manufacturers, pharmacy benefit managers, and commercial health insurers. A separate MHA-backed bill would prevent further erosion of the program within the MassHealth program.

John LoDico, Editor