July 12, 2018 The Honorable Ronald Mariano The Honorable James T. Welch, Chair Majority Leader Joint Committee on Health Care Financing Massachusetts House of Representatives Massachusetts Senate State House, Room 343 State House, Room 413-B Boston, MA 02133 Boston, MA 02133 The Honorable Jason M. Lewis The Honorable Jeffrey N. Roy, Acting Chair Chair, Joint Committee on Public Health Joint Committee on Health Care Financing Massachusetts Senate Massachusetts House of Representatives State House, Room 511-B State House, Room 236 Boston, MA 02133 Boston, MA 02133 The Honorable Bruce E. Tarr The Honorable Randy Hunt Minority Leader Joint Committee on Health Care Financing Massachusetts Senate Massachusetts House of Representatives State House, Room 308 State House, Room 136 Boston, MA 02133 Boston, MA 02133 Dear Leader Mariano, Chair Welch, Chair Lewis, Acting Chair Roy, Leader Tarr and Representative Hunt: On behalf of the Greater Boston Chamber of Commerce, I am writing to submit comments regarding H.4639, An Act establishing the Honorable Peter V. Kocot Act to enhance access to high quality, affordable and transparent healthcare in the Commonwealth, and S.2211, An Act Furthering health empowerment and affordability by leveraging transformative health care. We thank both the House and Senate for advancing the critical conversation around health care costs, access, and quality. One of the Chamber’s guiding health care policy principles is that the state must strike a balance between supporting our cornerstone health care industry and ensuring that world-class care is accessible and affordable for residents, businesses, and the state budget and. With that view, we support provisions in the bill that will expand access to world-class care, create pathways for the industry to reduce costs, or do both. We oppose proposals that will add costs to the system or expand state oversight and intervention in ways that do not recognize the complexity of our state’s health care system. Support: Provisions that will expand care and reduce costs include expanding telemedicine coverage, changing scope of services for certain providers, enhancing transparency for consumers, and adding the pharmaceutical industry to annual health cost trend hearings. Telemedicine The framework for embracing telemedicine in both bills will bring the delivery of medicine up to date with the latest technology to provide expanded access to medical professionals while reducing costs and maintaining quality care. Specifically, the Chamber supports ensuring access to telemedicine through coverage parity without mandating rate parity. Like other services, insurers and providers should have the flexibility to negotiate the appropriate rate for these services. Additionally, the adoption of innovative health care solutions like telemedicine will produce savings over time and allow providers and patients to manage their care better, which can reduce costs in the commercial and public markets in the long-term. Provider Versatility and Expansion of Scope of Practice Authority Expanding provider treatment authority and scope of practice for the class of providers, as included in S.2211, has two advantages: it would provide better access to lower cost health care providers which can generate savings for the state and the commercial market and, importantly, it would improve access to quality care. Although we prefer the Senate version, the House bill offers a reasonable alternative that lays out a process for evaluating the impact of scope of practice proposals prior to the Legislature voting on them. Increased Transparency for Consumers and Policy Makers There are provisions in each bill that will provide more information to both patients and policymakers. H.4639 will provide more transparency for consumers by creating a uniform method for the communication of information relating to the costs of health care plan products. Patient education is an important factor in helping consumers understand the costs of health care more clearly and contributes to informed decision making. Additionally, by bringing the pharmaceutical industry into Health Policy Commission’s (HPC) cost trend hearings and requiring companies to report drug prices and data to the Center for Health Information and Analysis (CHIA), H.4639 and the original Senate bill S.2202 provide a balanced approach for enhanced industry oversight of pharmaceutical companies and pharmacy benefit managers. We also support the early notification requirements by pharmaceutical companies to assist the state in planning for drugs coming to market that may have a significant impact on state health care expenditures, as long as such notification does not interfere with federal regulations or laws related to the timing of drug approval announcements. Despite our support for pharmaceutical industry oversight, the Chamber strongly opposes Senator Montigny’s amendment #19, which was adopted during Senate debate. We urge you to reject the Senate’s amended approach to pharmaceutical transparency and to adopt the comprehensive framework included in the original Senate bill and H.4639. Furthermore, there should be parameters on the assessments and fees that CHIA and HPC are allowed to impose on pharmaceutical companies to pay for the new regulation and oversight required. A reasonable standard should be imposed so there is a cap or limitation on how much can be assessed to avoid additional increases in the overall costs of health care. Oppose: Provisions that would increase the overall costs of the state’s health care system and are an overreach of the state’s authority and oversight of the industry. One-Time Assessments There are serious fiscal challenges at community hospitals across the state, and addressing those challenges is important because they provide critical health care access and serve as major employers in their community. However, the one-time assessments on certain health care providers and health insurance plans included in H.4639 add costs to the health care system because insurers and providers will have to restore the reserves that they draw to fund the assessment. Such assessments, whether they occur once or are ongoing, do little to address the underlying policy issues, like payer mix, that contribute to financial distress at community hospitals. Rather, such assessments create a temporary revenue infusion that acts only as a stop-gap that will require the state to have a repeat conversation on sustaining community hospitals and lower-paid providers within just a few years. Provider Price Variation and Expansion of State Oversight The Senate’s proposal to create the Hospital Alignment Review Council (HARC) effectively regulates provider prices by limiting the annual growth rate, even if it does not impose an outright price cap. Redistributing health care spending with the option to eventually introduce price caps is too heavy-handed an approach for a nuanced health care system. The House and Senate bills both greatly expand state oversight and authority, particularly as it pertains to price variation. Through the HARC created in the Senate bill, the Division of Insurance (DOI), and CHIA would have expanded authority, giving them significant influence on provider pricing and reimbursement. Separately, in H.4639, DOI would have broad authority to evaluate contracts and refer those it deems influenced by unwarranted factors to HPC. Evaluating contracts between providers and payers that are complex, tied to multi-year relationships, and influenced by myriad factors is both difficult and subjective. Furthermore, at present DOI does not have the capacity to do so. It is also important to point out that any expansion of state oversight and authority comes with a price tag, and we must be conscious of what that means for overall increased costs to our health care system. CHIA Top 50 Employer Report The Chamber also opposes Section 45 of S.2211 that requires CHIA to report the 50 employers in the Commonwealth that have the highest number of employees accessing state health insurance subsidies. Information provided in this report does not reflect the entire context of a situation and can unfairly label employers—particularly businesses who employ a large number of employees. The purpose of this report, other than to shame employers, remains unclear and is not a good use of state resources. MassHealth Reforms Finally, since the health care assessment on employers was initially proposed in January 2017, the Chamber has advocated for examining and addressing the rising enrollment in and costs of the state’s MassHealth program. Health care spending accounts for 40 percent of the state’s budget, so it is critically important for the legislature to take a serious look at how we can contain costs within the state program. We ask that there be a continued focus on and analysis of state savings to address the ever-growing share of the budget dedicated to health care, particularly in the context of other critical public needs that are important to the region’s growth, like transportation. Thank you for your consideration of this testimony. Sincerely, James E. Rooney President & CEO .