State health care bill seeking to increase scrutiny of private equity heads to conference committee
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A Steward Health Care facility located in Brockton
Legislative negotiators can soon get down to business on a package of Steward-inspired hospital oversight reforms and health care industry supports after the Senate approved a bill Thursday.
The Senate voted 38-2 on its rewrite (S 2871) of the wide-ranging, House-approved legislation, a measure that supporters believe will plug holes in oversight of hospitals, especially for-profit systems like the bankrupt Steward Health Care.
Sens. Marc Pacheco of Taunton and Mark Montigny of New Bedford, both of whom unsuccessfully pursued several amendments, voted against the bill.
"There should be absolutely no surprise to the members of this body that the Massachusetts health care system is seriously struggling," said Sen. Cindy Friedman, the bill's architect. "You've all seen the headlines and heard from your constituents and the hospitals in your district about the challenges that they face. Health care costs for patients and the state continue to rise as well as the cost of delivering care. There's a lack of oversight and transparency in many health care sectors, such as pharmaceutical manufacturing, companies and pharmacy benefit managers. Primary care is in deep, deep crisis. But most concerning of all, is that we have lost the patient and their needs as the primary focus of the health care system."
Many of the reforms in both the House- and Senate-approved versions aim to address gaps in the state's oversight framework exposed by the crisis at Steward Health Care, whose ongoing bankruptcy proceedings has Beacon Hill -- not to mention patients and providers across the state -- on edge.
Private equity firms, like the one that used to control Steward's for-profit system, and real estate investment trusts, like the landlord that owns the property under Steward's hospitals, would be subjected to new scrutiny from regulators.
Under the Senate bill, regulators would also monitor the ratio of debt to earnings at private equity-backed providers and refer those with excessive debt that could imperil their operations to the attorney general's office.
Another provision in both bills would require lessors to notify the state before repossessing any medical equipment or supplies, a response to a Boston Globe article about a woman who died when Steward doctors would not treat her internal bleeding with an embolism coil because it had been repossessed due to unpaid bills.
In a departure from the bill the House approved in May, the Senate proposal does not outright prohibit health care systems from striking agreements with real estate investment trusts to sell hospital land and lease it back. It would instead require those transactions to be disclosed ahead of time to regulators, who could modify the deals.
"The recent events concerning Steward Health System have exacerbated a pre-existing crisis across all aspects of the system," Friedman said. "They may not have been the cause, but they certainly are the poster child."
Both the House and Senate bills reach beyond the Steward crisis, too, into areas of strain that has roiled the hospital and health care industries for years.
They would steer enhanced MassHealth rates to vulnerable hospitals for the next two years, and overhaul the way the state reviews major proposed service changes, including hospital expansions.
Sen. Pavel Payano of Lawrence said safety-net hospitals like Lawrence General Hospital need help to "continue their essential work without the constant threat of financial instability."
"Our safety-net hospitals serve a high number of low-income and uninsured patients, and this financial support is essential for maintaining the quality and accessibility of care in these communities," he said. "Without it, these hospitals would struggle to provide the critical services that so many depend on."
Senators also wove several prescription drug reforms, which were absent from the House bill, into their counterproposal. Their legislation would allow analysts to collect information from pharmaceutical companies and pharmacy benefit managers, and create a licensing structure for those so-called PBMs.
The Senate in three straight lawmaking sessions has approved broader prescription drug pricing and oversight reform legislation, which has never received a vote in the House.
Formal legislative business for the term ends July 31, so Democrats will need to work quickly to iron out differences between the House and Senate proposals.
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