INSIDE THE ISSUE

> Primary Care Legislation
> Medicaid Work Requirements
> AG Effort on Work Rule Fails
> Norwood Hospital

MONDAY REPORT

Primary Care Bill Passes House, Moves to Conference Committee

The Massachusetts House last Thursday passed primary care access legislation that seeks to increase overall primary care investments within the construct of the state’s healthcare cost growth benchmark.

The House bill, which passed unanimously, establishes statewide annual targets to increase primary care spending – 9% of all healthcare expenditures by 2029, 12% by 2033, and 15% by 2036 – and creates an advanced primary care payment model. It sets a commercial reimbursement rate floor for community health centers, invests $25 million in healthcare workforce development, expands funding opportunities for the Health Safety Net through the Commonwealth Federal Matching and Debt Reduction Fund, and creates an expedited Determination of Need process for high public payer community hospital projects that would expand preventative care services, behavioral health, and maternal health care in underserved communities. The legislation also includes a longtime MHA priority to require health insurers to cover services delivered through certified mobile integrated health programs, broadening financial support for patient access to home and community-based care.

The legislation not only provides for a longer implementation timeline than the Senate proposal (10 years to reach the 15% target as compared to the Senate’s four years) but also updates provider definitions to reflect current health system complexities and broadens the types of provider services and spending that would count towards the primary care investment target. It also includes an alternative to Health Policy Commission performance improvement plans to instead allow providers to file a “primary care commitment” to develop and implement coverage and delivery innovations in the preventative care space in a manner that is responsive to the needs of the patient population.

The House legislation establishes guardrails for the use of artificial intelligence in health insurance utilization review, strengthens oversight of pharmacy benefit managers to ensure prescription drug rebates reduce patients’ out-of-pocket costs, increases HPC reporting requirements, and gives state agencies additional authority to implement and enforce these reforms.

The House and Senate primary care bills now move to conference committee, which under new legislative rules has until the end of the calendar year to reach consensus on a bill to send to the governor’s desk.

MHA Weighs in on Medicaid Work Requirements

MHA, in a letter to federal authorities, has cautioned against the Center for Medicare and Medicaid Services’ (CMS’) interim final rule to implement the new Medicaid work requirements scheduled to go into effect on January 1 and urged that they be withdrawn or substantially rewritten. The concerns outlined in the letter are, by and large, not unique to Massachusetts and are shared by other states.

The work or “community engagement” mandate that requires most Medicaid recipients to work a set number of hours to be eligible for benefits was included in the One Big Beautiful Bill Act (OB3). In its letter to U.S. Health and Human Services and CMS, MHA wrote that the interim final rule the agencies issued runs counter to the stated goals of creating a more efficient and affordable healthcare system “by imposing significant new compliance, documentation, reporting, and operational obligations that will increase administrative costs and divert limited resources away from the delivery of care.”

Because of the work requirements, hospitals are gearing up to modify their information technology systems, train financial counselors, track enrollment, and collect and report data to CMS on an ongoing basis. “Every dollar and every hour devoted to administering new reporting requirements is a dollar and an hour that cannot be invested in improving healthcare access, strengthening behavioral health services, supporting providers, reducing eligibility processing times, or improving care coordination for MassHealth members,” MHA wrote.

MHA has been engaged with MassHealth and other stakeholders in strategizing on how to implement the massive new work requirements to ensure as many eligible individuals as possible maintain their coverage. States are required to send targeted outreach notices to enrollees who may be subject to work requirements informing them of the new rules. The large administrative burden and costs associated with the outreach are further straining state and hospital resources.

As has been shown in other outreach efforts, it’s difficult to ensure that the nearly two million MassHealth enrollees are reached, that they understand the new requirements, and that they meet the deadlines in ensuring they can continue to receive care.

“Individuals may lose health insurance not because they fail to meet community engagement expectations, but because they misunderstand reporting requirements, miss deadlines, experience technical difficulties, fail to receive notices, cannot obtain required documentation, or encounter delays in state processing,” MHA wrote. “In these circumstances, coverage losses are procedural rather than substantive, yet the consequences for beneficiaries are significant.”

MHA also expressed concern with CMS’ interpretation of Congress’ intent in defining the “medically frail” exclusion to the work requirement within the interim final rule. Rather than just determining whether a person falls within one of the “medically frail” definitions Congress included in the bill, states in collaboration with providers will now have to determine whether that condition “significantly impairs” the person’s capacity to satisfy the 80-hour monthly community engagement requirement.

“A beneficiary undergoing active cancer treatment or living with a progressive condition such as Alzheimer’s disease should qualify for exemption based on that diagnosis alone, a determination states could make efficiently and reliably using existing insurance claims data,” MHA wrote. “Instead, the rule requires an additional, functional determination that places undue administrative burden on providers and goes far beyond their clinical role.”

As people lose coverage because of the administrative hurdles included in the rule, they’ll still seek unreimbursed care in emergency departments, driving up costs for everyone. Or they’ll defer care, become sicker and require more expensive care further down the road, MHA wrote.

MHA called on CMS to withdraw or substantially revise the proposed rule and to “work with states and stakeholders to develop an approach that preserves continuous access to healthcare, minimizes unnecessary administrative and cost burdens, and provides states with the flexibility needed to implement any community engagement requirements in a manner that protects eligible individuals and the healthcare systems that serve them.”

AGs’ Effort to Scuttle Work Rule Thwarted

While MHA and national stakeholders continue to press CMS on the difficulties in imposing new Medicaid work requirements (see story above), a lawsuit from 25 attorneys general around the country seeking to halt the interim final rule that implements the requirements was rejected by a U.S. District Court judge in Massachusetts.

Judge Richard Stearns was unpersuaded by the AGs’ argument that states are being unfairly burdened with excessive administrative costs needed to implement the law, and that the timeline for implementation – January 1, 2027 – is too tight. He wrote that Congress indicated it would pick up 90% of the cost and that Congress, not the interim final rule, had set the January 1 implementation deadline.

While the judge’s ruling was a setback for the states that filed the suit, he issued it without prejudice, meaning that if harm arises as the work rule is implemented the states can return to court to once again request an injunction. Judge Stearns noted “this case presents difficult issues regarding the scope of Congress’s delegation of interpretative authority to the [HHS] Secretary and the faithfulness to Congressional intent with which the Secretary performed his task. This, in turn, requires an examination of the data relied upon by the Secretary and the judgments (some medical) that underlay his amplification of Congress’s legislative outline.”

Effort to Resuscitate Norwood Hospital Advances

Among the crush of bills that passed as the formal legislative ended last Friday was one from the Senate that would allow the state to take by eminent domain the uncompleted Norwood Hospital and the land on which it sits. The Senate bill makes the taking contingent on an appropriation from the legislature and a sale to a qualified nonprofit. The House concurred with the Senate meaning that the bill will be sent to the governor.

The now-bankrupt Steward Health Care owned Norwood Hospital, which closed in 2020 following a flood and was demolished in 2022. Construction on a new facility began in 2024, but quickly ended following Steward’s collapse. The site is now owned by Medical Properties Trust (MPT), which is the entity to which Steward sold all its properties.

MPT released a fact sheet last week saying it has invested $350 million in the Norwood Hospital rebuild and is willing to put in $150 million more if the state can find an operator to run the facility.

“The fastest and least costly way to reopen Norwood Hospital is to let MPT finish construction of the facility and find a qualified operator. The Commonwealth of Massachusetts should work collaboratively with MPT to ensure the chosen operator receives the determination of need (DoN) necessary to sustain operations at Norwood,” wrote MPT, the Alabama-based real estate investment trust. However, the legislature and local officials have long expressed mistrust in the for-profit company.

John LoDico, Editor