Lawmakers eye reforms to Health Policy Commission oversight - Boston Business Journal

DATE: April 4, 2023

More than 10 years after the Massachusetts Health Policy Commission was established with the goal of reigning in excessive cost growth in the state’s health care industry, some lawmakers say it's time to revisit the agency's authority, filing bills that would broaden its regulatory power. 

Established in 2012, the HPC is primarily tasked with establishing a cost growth benchmark for annual health care spending in the state and monitoring provider and payer adherence to the benchmark. 

At the time, the commission was considered a landmark initiative that prompted lawmakers in states such as California, Oregon, and Rhode Island to adopt similar measures. But in recent years, the state has failed to meet the benchmark it has set for spending, and industry stakeholders have said the commission is “lacking teeth.”

Sen. Rebecca Rausch, D-Needham, who filed a bill for this session that would expand HPC authority in a number of areas, said that she fully believed the HPC has had some success in containing cost growth in the state. But she also said the number of Massachusetts residents who still had unmet health care needs because of  high costs was “unacceptable.”

“We need to recognize that the health care system has shifted in the last decade,” Rausch said. “As most sectors change over the course of a decade. So it's time to come back and update its authorizing statute so that HPC and its partner, CHIA, can continue to do this work in a way that makes sense in today's world.”

The HPC's main tool for enforcing compliance to the growth benchmark is performance improvement plans, or PIPs. The agency’s sister branch, the Center for Health Information and Analysis, provides the HPC with a list of entities whose spending for a given year has exceeded the benchmark, at which point the agency can require such entities to submit a cost-cutting plan. 

Expanded authority

Only insurance plans and select health care providers are subject to PIPs under the current law, but Rausch said her bill would expand that to include a broader range of entities, including pharmaceutical groups and specialty practices. 

“We want the HPC to be able to do its work wherever the cost growth leads it,” Rausch said. “If the cost is growing over there, we want the HPC to be able to go over there and look around and figure out if there's a way to contain that cost growth.”

According to data published by CHIA in March, pharmacy spending growth has recently outpaced all other categories, rising 9.6% from 2019 to 2021 before accounting for drug rebates. At the state annual benchmark hearing on March 15, HPC Executive Director David Seltz said that expanding state oversight of the pharmaceutical sector should be one of the state’s top priorities. 

Alan Cohen, a professor of health law, policy and management in the Boston University School of Public Health, said he supported holding the full range of health care entities accountable to the benchmark. But he also said the policy was likely to get serious political pushback from industry groups. 

“The reform here in Massachusetts in general is aimed toward sustainable growth over time," Cohen said. “And I think the only way that the HPC is going to be able to control that is if all of the potential stakeholders who are driving spending growth upward are included.”

Rausch’s bill would also increase the maximum penalties the HPC can assess to entities that do not comply with a PIP order, from $500,000 up to an amount commensurate with the entity’s spending in excess of the cost growth benchmark. It would also make the full list of entities referred to the HPC for performance review a public record, and would expand the metrics CHIA uses to refer entities to the HPC to account for a broader range of factors. 

By Seamus Webster – Boston Business Journal, Boston University Statehouse Program, April 4, 2023