Impossible or Laudable: The Proposed Massachusetts Primary and Behavioral Health Care Spending Requirement

17 December 2019 Health Care Law Today Blog
Authors: Alexandra B. Shalom Olivia R. King

Massachusetts Governor Charlie Baker has restarted the discussion on health care cost containment in the Commonwealth with a proposed bill that contains a raft of initiatives. Foley & Lardner will be addressing each of the key initiatives in separate blog posts over the coming weeks to invite discussion and testing of the proposals. 

Click HERE to read about the Proposed Facility Fee Ban.

Click HERE to read about the MA Proposed Reporting Requirements for Drug Pricing Transparency.

As previously discussed, Massachusetts Governor Charlie Baker introduced a bill, the Act to Improve Health Care by Investing in Value on October 18, 2019. This legislation is designed to enhance primary care and behavioral health services while maintaining cost growth. Baker highlighted that investing in primary and behavioral health care is critical because of the worsening shortage of primary care and the increasingly challenging nature of addiction and behavioral health issues. 

In order to incentivize investment in primary and behavioral health care, the proposed bill requires providers and payers to increase spending by 30% in these two areas over the next three years. 

How Does the Bill Require Investment in Primary and Behavioral Health Care?

The bill requires the Health Policy Commission (the “HPC”) to establish an aggregate primary and behavioral health care target that providers and insurers must meet. Until 2022, the target is a 30% increase above aggregate baseline expenditures. The HPC has the option to modify the target starting in 2023.

Can Providers and Insurers Spend More to Meet the 30% Requirement? 

No. Providers must spend 30% more on primary and behavioral health care while maintaining total health care costs. This may seem like an impossible goal for providers. Marylou Sudders, the Massachusetts’ Secretary of the Executive Office of Health and Human Services, contends that such spending is achievable because the legislation also requires insurers to spend 30% more on primary and behavioral health care. Although many patients would welcome the increased access to primary and behavioral health care services, providers should be concerned that the proposal does not provide sufficient guidance on how to make such a drastic change to their current models. For example, many providers have already made substantial commitments in behavioral health or primary care, while others have not. The proposal appears to treat both providers equally, with no recognition of the existing services and level of investment in the market.  

What Happens If Providers and Insurers Can’t Meet the 30% Spending Requirement?

If the bill passes as-is, beginning in 2023, the HPC may require those providers and insurers that do not meet the 30% requirement to file and implement a performance improvement plan (PIP) identifying strategies to increase primary and behavioral health care expenditures. If a PIP is required, providers and insurers would have 45 days to submit a PIP or file an application for waiver or extension. However, if an entity fails to file or implement a performance improvement plan, the entity could be subject to civil penalties between $500,000 and $1,000,000. 

The law also requires the HPC to publish an annual report comparing cost trends with the target and to hold public hearings to examine the Commonwealth and health care entities’ performance in meeting the target. 

Takeaways

The 30% requirement for providers and insurers is by far the most publicized element of Baker’s proposal and deservedly so given the magnitude of the requirement, the significant changes providers and insurers would need to make if the law passes, and the seemingly impossible nature of the task. It may be reasonable to encourage certain providers to improve access to care in their communities, but a blunt, across-the-board mandate is probably not the way to accomplish it. We see the proposal as positive in opening the discussion about the need for increased services in certain areas, particularly behavioral health, and in recognizing that the payers will need to do their part in contributing to any solution. 

In addition to the 30% requirement, the law would impose restrictions on facility fees and out-of-network billing, increase coverage of telehealth and behavioral health services, and implement drug pricing provisions, all of which Foley will cover in separate Health Care Law Today posts. 

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