State health care regulators may soon gain heightened oversight and enforcement authority over private equity investors, as lawmakers look to avert another crisis like the Steward Health Care bankruptcy from unfolding in Massachusetts.
Bay Staters taking prescription drugs for chronic conditions like diabetes are also poised to see financial relief, under a pair of major late-session agreements that emerged from closed-door talks on Friday evening.
The two health care bills – the last breakthroughs of the session – were held up in tangled negotiations for four months as House and Senate negotiators tried to swap policies between a hospital oversight bill with deep roots in the House and prescription drug legislation that the Senate has been pressing for years.
The Senate plans to take up the bills on Monday, according to the branch's agenda. The House accepted the hospital oversight bill within minutes of gaveling in on Monday.
The two-year legislative session must end on Tuesday, with a new Legislature being sworn in on Wednesday.
The health care oversight agreement (H 5159) imposes steeper penalties for hospitals that fail to comply with reporting requirements, mandates that lessors notify the state 60 days before repossessing medical equipment, and blocks the state from issuing or maintaining a license for hospitals whose main campuses are leased from a real estate investment trust. Those provisions are largely inspired by the Steward crisis.
The agreement also requires private equity investors, real estate investment trusts and management services organizations to comply with financial reporting requirements to the Center for Health Information and Analysis. Fines for failing to submit data on time would soar from $1,000 to $25,000 a week – without a cap.
Attorney General Andrea Campbell would also gain tools to hold private equity firms accountable, including more investigative authority into health care transactions.
Negotiators announced resolutions from the two conference committees on Friday night. Under the drug reform agreement (S 2520) patients would pay no more than $25 for certain name-brand medications to treat chronic illnesses, including insulin for diabetes, and face no costs whatsoever for similar generic options.
The bill also requires MassHealth, the Group Insurance Commission -- which covers state employees, retirees, and their dependents -- and other insurers to provide coverage for one generic drug and one name brand drug for each of the following: diabetes, asthma, and the two most prevalent heart conditions.
The language to reduce or eliminate cost burdens for people with chronic conditions was a priority for Senate President Spilka. The Senate passed its version of the bill in November 2023. The House approved its bill in late July of 2024.
The bill also creates a licensure process for pharmacy benefit managers. PBMs broker drug transactions between insurers, manufacturers and pharmacies, and supporters argue that their work drives down costs for consumers. Critics say PBMs function with little oversight and are responsible for rising costs.
The bill directs the Division of Insurance to license and regulate the PBMs operating in Massachusetts. It would also ban a PBM from making payments to a pharmacy benefit consultant or broker if it's a conflict of interest.
