Healthcare entities flagged for not hitting a newly proposed primary care spending target and failing to make improvements could be hit with hefty financial penalties under legislation that emerged in the Senate Thursday. The late-session push to gradually fortify a key sector is also raising fresh questions around cost control and affordability.
Unveiled after Senate President Karen Spilka spoke to business leaders about it at a Boston hotel, the legislation envisions pumping potentially billions of dollars into the primary care sector without raising already surging medical spending. Although Spilka emphasized the branch’s focus on affordability, the legislation does not offer a concrete roadmap for how to redistribute healthcare dollars while ensuring patients are not faced with new cost pressures that may force them to forgo care.
By a 14-0 vote, the Senate Ways and Means Committee advanced a primary care reform package (S 867) that features a phased-in spending target for the sector and a standardized capitated payment model that replaces the traditional fee-for-service structure. The bill, based closely on recommendations from a primary care task force, is up for a vote next Thursday.
Promised by Spilka more than 17 months ago, the bill looks to boost access to primary care, grow the shrinking workforce and give new enforcement powers to the Health Policy Commission. The House has not proposed its own version of the bill, but under new rules the topic can remain in plan all year if the branches each approve bills and get them to a negotiating panel.
The proposed reimbursement overhaul applies to commercial insurers and the Group Insurance Commission that would pay providers with prospective per-member, per-month lump sums. Insurers and the GIC would be blocked from imposing prior authorization requirements on primary care services under the payment model.
In a bid for insurance parity, the bill stipulates commercial insurers cannot reimburse community health centers, where many people access primary care services, at a lower rate than MassHealth.
Sen. Cindy Friedman, the chamber’s healthcare point person, told the News Service that insurers “like some” of the bill but “don’t like” certain provisions.
“They like the fact that if they’re going to do this, if they’re going to be required to do this, that the providers are required to pick it up, because you need a critical mass of movement in order for it to be successful,” Friedman said. “They don’t like the fact that we are setting a standard across the board — they want to be able to do their thing.”
The Arlington Democrat added, “The systems don’t like the shifting of money. They don’t like that they’re going to be held accountable for shifting dollars because they’ll say, ‘We’re in bad shape.’ ”
Friedman pledged all stakeholders would have a “seat at the table” as the payment model is hashed out.
Lora Pellegrini, CEO of the Massachusetts Association of Health Plans, said the Ways and Means proposal will end up raising costs for employers, consumers and purchasers of insurance. While the association supports efforts to strengthen the primary care sector, Pellegrini she’s concerned the bill lacks a “clear mechanism” to ensure new investments “can be made without increasing overall health care costs, health insurance premiums, or member cost-sharing.”
“At a time when Massachusetts continues to face significant affordability challenges, any proposal that requires substantial new spending should be accompanied by a realistic and achievable framework for offsetting those costs elsewhere in the system,” Pellegrini continued.
Under the bill, the HPC is tasked with setting and enforcing the primary care spending target for the overall system and individual entities. In 2028, the bill calls for 9% of total healthcare spending to be dedicated to primary care. That percentage would climb to 12% in 2029 and 15% in 2030. In 2031 and beyond, the targets cannot be lower than 15%, according to a Ways and Means summary.
Total healthcare spending in 2024 was $83.3 billion, according to the most recent data from the Center for Health Information and Analysis. Under a 15% target, primary care spending would need to be around $12.5 billion.
Former Gov. Charlie Baker tried to get Massachusetts to set a primary care spending target back in 2018, as he also sought to drive investments in addiction services, behavioral health and geriatric services.
In 2024, primary care accounted for 8.4% of total spending at MassHealth, according to a dashboard released Thursday by the Center for Health Information and Analysis and Massachusetts Health Quality Partners. That compares to 6.6% for commercial insurers and 4.2% for Medicare Advantage.
“While total spending on primary care services for commercial members increased from $1.8 billion to $2.0 billion in 2025, spending on other services outpaced that of primary care, resulting in a decline in the proportion of primary care spending,” the dashboard says.
Under the Senate bill, the HPC must notify healthcare entities that fail to reach the primary care spending target. Entities would also be flagged if their heightened investment in primary care prompts a jump in overall medical spending, or if there’s an increase to premiums or cost-sharing.
The agency is also empowered to put violators on a performance improvement plan.
The HPC could levy escalating penalties, starting at $500,000, for entities that neglect to file an improvement plan on time, fail to file a plan “in good faith with the commission,” fail to implement the plan “in good faith,” or “knowingly failed to provide or knowingly falsified information,” according to the legislation. A second violation comes with a penalty of up to $750,000, and subsequent penalties could not be “more than the amount by which the health care entity failed to meet the primary care expenditure target.” The HPC could also block entities from accepting new patients, according to a Senate fact sheet.
The HPC would become home to the new Office of Primary Care Policy and Payment, which is charged with establishing the standardized primary care capitated payment model.
Also known as the advanced primary care payment model, the structure would include guidelines on which services are covered, per-member per-month rate methodology, reimbursement and spending reporting requirements, audits of participating providers and organizations, and limits or bans on cost-sharing, among other provisions. A primary care technical advisory council would help the new HPC office develop the model.
All providers and provider organizations that are registered with the HPC would need to embrace the payment model. Those providers, aside from participating independent primary care practices, also need to file reports and comply with audits that the new HPC office may require.
Pellegrini said she’s concerned commercial insurers would be subject to new payment structures modeled after Medicaid programs. The framework “risks increasing costs, limiting flexibility, and disrupting existing value-based payment arrangements and innovative care delivery models,” she said.
After its expected passage in the Senate next week, the primary care bill heads to the House, and Friedman said she’s been “very communicative” with her Health Care Financing Committee co-chair Rep. John Lawn.
“He knows it’s coming,” Friedman said. “He knows what’s in it.”
Gov. Maura Healey’s healthcare affordability work group is also expected to produce initial recommendations by the end of June.
Alison Kuznitz is a reporter for State House News Service and State Affairs Pro Massachusetts. Reach her at akuznitz@stateaffairs.com.
