For Immediate Release - January 11, 2017

Baker-Polito Administration Achieves Landmark Reform in Revamping Determination of Need Program

BOSTON The Massachusetts Public Health Council (PHC) has approved a sweeping overhaul of the Determination of Need (DoN) process, the most significant development since the law creating the program was passed in 1971. The DoN program regulates the health care delivery system in Massachusetts through the review and approval of major capital expenditures, acquisitions, certain additions, and significant changes in services by hospitals, long-term care facilities and clinics.

“Today’s landmark vote by the Public Health Council represents the first major reform of the DoN process in more than 40 years,” said Secretary of Health and Human Services Marylou Sudders. “The changes enacted today will create a simplified and more relevant DoN process, which retains strong regulatory oversight and increases accountability for applicants,” she said. “This has been a mammoth, year-long effort that brought nearly every stakeholder to the table and has resulted in a product that will serve the Commonwealth and its residents well for years to come.”

The goal of the DoN program is to promote the availability and accessibility of cost-effective, high quality health care services in Massachusetts, but an update of these rules was long overdue. The DoN process was developed during a time of centralized health planning to ensure that health services were broadly available and efficiently used. While the health care landscape has seen seismic changes since the 1970’s, the DoN process harkened back to another era -- much of it outdated and out of step with the health care ecosystem that has evolved dramatically since it was created.

A major focus of updating the regulations was embedding public health and community health principles throughout the process, specifically a focus on health equity and the underlying social determinants of health - health care's true cost drivers. The new rules set forth the expectation that applicants will employ strategies to improve the health and wellness of the communities they serve. The DoN process will also now include a more data-driven, expanded, and coordinated approach for the applicant's Community Health Initiative investments, which have long been part of the DoN process but not strictly informed by local or state health priorities. Community Health Initiative investments related to DoN totaled more than $170 million from FY06-17.

“For me, the most exciting part of this moment is knowing that it firmly establishes Massachusetts as a national model for developing a Determination of Need process that truly has public health at its core,” said Public Health Commissioner Monica Bharel, MD, MPH. “These updated DoN regulations will help us better leverage this important process to provide our residents with access to high quality, more affordable care that focuses on keeping them healthy in their communities.”

The changes approved by the PHC, which were precipitated by Governor Baker’s executive order to review all state regulations, will result in:

  • A process with much stronger linkages to public health considerations and community and state health priorities
  • A simplified DoN process that is significantly streamlined and easier to understand for applicants, eliminating over 50% of unnecessary regulatory provisions through common sense and timely reforms
  • Greater alignment and coordination of the DoN process with other health reform and regulatory agencies in the Commonwealth (e.g., HPC, CHIA, MassHealth, AGO), allowing state government to speak with one voice
  • A modernized regulation that reflects today’s health care system, incentivizing increased value-based market competition (i.e. quality and price), and creating greater consumer choices and transparency
  • Application reviews that are focused on health care systems rather than individual facilities
  • A DoN process that supports providers in their transition to new care delivery models such as Accountable Care Organizations

The measure approved today will take effect at the end of the month. The new rules will have no impact on applications that are currently pending or that have already been approved by the Council.

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