SECTION 4. Section 18H½ of chapter 6A of the General Laws, as appearing in the 2004
Official Edition, is hereby amended by striking out, in line 4, the words "December 31,
2007" and inserting in place thereof the following words:- June 30, 2008

SECTION 5. Chapter 15A of the General Laws is hereby amended by inserting after
section 22 the following section:-

Section 22A. (a) For purposes of this section, the following words shall have the
following meanings:-

“Board”, the Board of Trustees of the Roxbury Community College.
“Center”, the Reggie Lewis Track and Athletic Center established pursuant to
subsection (b).
“College”, the Roxbury Community College.
“Use for nonpublic purposes”, shall include, but not be limited to, the leasing or
renting of the building for commercial entertainment activity.
“Use for public purposes”, shall include, but not be limited to, use by
Massachusetts public high school track programs, members of the abutting residential
community or by members of the community at large and students, faculty, staff, and
alumni at Roxbury Community College.

(b) There is hereby established the Reggie Lewis Track and Athletic Center at
Roxbury Community College. The center shall be a building containing a Massachusetts
state track facility which shall be maintained at the college for public purposes. In the
event the facility is not in use for public purposes, the board may permit use for
nonpublic purposes for a rental amount to be determined by said board.

(c) The board shall be responsible for the management and operation of the
center including, but not limited to, the following:-

(i) establishing user fees;

(ii) entering into agreements with the Massachusetts State Track Coaches
Association, with other public groups and, pursuant to the provisions of this section, with
nonpublic groups interested in leasing or renting the center for commercial entertainment
activity;

(iii) establishing rules and regulations for the use of the center by Massachusetts
public high school track programs, by members of the abutting residential neighborhoods
and members of the community at large, by students, faculty, and staff and alumni of
Roxbury Community College, and, pursuant to the provisions of this section, by
nonpublic groups interested in leasing or renting the center for commercial entertainment
activity;

(iv) deciding the priority of uses and schedule of the center with input from an
advisory committee; and

(v) entering into agreements with vendors to provide concession stand services
and other agreements as deemed necessary by the board for the maintenance and
operation of the center.

(d) The center shall be made available without charge for use by Massachusetts
public high school track programs and Roxbury Community College. The center shall be
made available on a user fee basis for members of the public. The center shall be made
available at market rate, as determined by the board, for nonpublic or commercial
entertainment purposes so long as the center is not being used for public purposes.

(e) The annual operating expenses of the center shall be separate and distinct
from appropriations within the general appropriations act for the college, shall use a
separate item of appropriation and shall be audited biennially by the state auditor.

SECTION 6. Chapter 22 of the General Laws is hereby amended by striking out section
12, as so appearing, and inserting in place thereof the following section:-

Section 12. There shall be in the department a commission, to be known as the state
boxing commission, which shall consist of 3 members to be appointed by the governor
with the advice and consent of the council, for terms of 3 years each. The governor, with
the advice and consent of the council, shall from time to time designate 1 member of said
commission as chairman. The members shall receive their traveling expenses necessarily
incurred in the performance of their duties, and the commission shall be allowed such
sums for clerical assistance as the governor and council may approve. The secretary of
the department shall act as the secretary of the commission and shall keep full and true
records of all its proceedings. The commission may deputize 1 or more persons to
represent the commission, and to be present at any match or exhibition authorized to be
held under sections 32 to 51 of chapter 147. Such persons may receive such
compensation for their traveling expenses necessarily incurred in the discharge of their
duties.

SECTION 7. Section 2EEE of chapter 29 of the General Laws is hereby repealed.

SECTION 8. Chapter 32A of the General Laws, as so appearing, is hereby amended by
adding the following section:-

Section 24. (a) There is hereby established and set up on the books of the
commonwealth a trust fund to be known as the State Retiree Benefits Trust Fund,
hereinafter in this section referred to as the trust fund. The pension reserves investment
management board established pursuant to section 23 of chapter 32, in this section called
the board, shall be the trustee of and shall administer the trust fund. For the purposes of
this section the secretary of the executive office of administration and finance, or his
designee, and the executive director of the group insurance commission established
pursuant to section 3 of chapter 32A, or his designee, shall be members of the board. The
provisions of section 23 of chapter 32 shall apply to the management of the trust fund.
The trust fund shall be an expendable trust not subject to appropriation.

(b) The purpose of said trust fund shall be for depositing, investing and disbursing
amounts set aside solely to meet liabilities of the state retirement system for health care
and other non-pension benefits for retired members of the system. There shall be credited
to the trust fund any revenue from appropriations or other monies authorized by the
general court and specifically designated to be credited to the trust fund, and any gifts,
grants, private contributions, investment income earned on the trust fund’s assets and all
other sources. Money remaining in the fund at the end of a fiscal year shall not revert to
the General Fund.

(c) Upon request of the group insurance commission established pursuant to
section 3 of chapter 32A, the board may expend amounts in the trust fund, without further
appropriation, to pay the costs of health care and other non-pension benefits for retired
members of the state retirement system; provided, however, that said group insurance
commission shall remain responsible for administering the payment of, and determining
the terms, conditions, schedule of benefits, carriers and eligibility for, health care and
other non-pension benefits for retired members of the state retirement system.

(d) Upon authorization by the board, any other retirement system of the
commonwealth may participate in the trust fund using the same procedures required for
participation in the pension reserves investment trust fund pursuant to section 22 of
chapter 32.

(e) The trust fund shall be revocable only when all such health care and other non-
pension benefits, current and future, payable pursuant to this chapter have been paid or
defeased.

SECTION 9. Section 9A of chapter 118E of the General Laws, as amended by section 17
of chapter 324 of the acts of 2006, is hereby further amended by adding the following
subsection:-

(16) The division shall enroll MassHealth members in available employer-
sponsored health insurance if that insurance meets the criteria for MassHealth payment of
premium assistance, and if federal approval will be obtained to ensure federal
reimbursement for premium assistance for that insurance.

SECTION 10. Chapter 118E of the General Laws, as amended by section 28 of chapter
58 of the acts of 2006, is hereby further amended by striking out section 23 and inserting
in place thereof the following section:-

Section 23. As used in this section, health care insurer, health insurer and health
insurance shall include, but not be limited to, any health insurance company, health
maintenance organization, group or non-group health plan, self-insured plan, service
benefit plan, managed care organization, pharmacy benefit manager, or other public or
private third party that is, by statute, contract, agreement, or arrangement legally
responsible for payment of a claim for health care benefits.

Notwithstanding any general or special law, rule or regulation to the contrary, the
division shall be subrogated to the rights of any recipient of medical assistance pursuant
to this chapter and may take any and all actions available to such recipient to secure
benefits under any policy issued by any health care insurer that is or may be liable to pay
for health care benefits obtained by a recipient of medical assistance to the extent of any
health care benefits provided by the division on behalf of said recipient or said recipient's
dependents. A health care insurer shall reimburse the division for any health care benefits
provided by the division on behalf of a recipient of medical assistance, and shall not
reduce the amount of the total reimbursement by any division payment, provided that any
part of the total that is a reimbursement for a division payment shall not exceed the
amount actually paid by the division.

No health care insurer shall require written authorization from the recipient before
honoring the division's rights pursuant to this section. A health care insurer shall respond
to any inquiry by the division about a claim for payment for any health care benefits and
may not deny any claim for payment for any health care benefits solely on the basis of
the date of submission of the claim, the type of format for the claim form, or a failure to
present proper documentation at the point of sale that is the basis of the claim, if the
claim is submitted by the division within a 3-year period beginning on the date on which
the service was furnished, and if any action by the division to enforce its rights with
respect to a claim is filed within 6 years after the submission of the claim to the health
insurer.

A recipient of medical assistance or any person legally obligated to support and
have actual or legal custody of a recipient of medical assistance shall inform the division
of any health insurance available to such recipient upon initial application and
redetermination for eligibility for assistance and shall make known the nature and extent
of any health insurance coverage to any person or institution that provides medical
benefits to the recipient or his or her dependent.

A health care insurer shall not take into account that an individual is eligible for or
is receiving benefits from the division when enrolling an individual or issuing a policy or
agreement covering the individual, or administering or renewing a policy or agreement,
or when making any payment for health care benefits to the individual or on behalf of the
individual; nor shall any policy or agreement issued, administered, or renewed by a
health care insurer contain any provision denying or reducing health care benefits to an
individual who is eligible for or is receiving benefits from the division.

A provider of medical assistance pursuant to this chapter shall determine whether
any recipient for whom it provides medical care or services which are or may be eligible
for reimbursement pursuant to this chapter is a subscriber or beneficiary of a health
insurance plan. The division shall be the payor of last resort and a provider shall request
payment for medical care or services it provides from a health insurer which is or may be
liable for the medical care or services so provided prior to requesting payment from the
division.

Payment by the division pursuant to the medical assistance programs established
pursuant to this chapter shall constitute payment in full; subsequent to any such payment
a provider may not recover from any health insurer an amount greater than the amount so
paid by the division for any service for which the division is to be the payor of last resort.

Notwithstanding any general or special law or rule or regulation to the contrary, all
holders of health insurance information, including, but not limited to, health insurers
doing business in the commonwealth, all private and public entities who employ
individuals in the commonwealth, and all agencies of the commonwealth, shall provide
sufficient information to the division, or in the case of those agencies, shall make other
arrangements mutually satisfactory to both agencies, to enable the division: (a) to identify
whether any of the following persons are or could be beneficiaries under any policy of
insurance in the commonwealth: (i) persons applying for or receiving medical assistance
or benefits pursuant to this chapter or health services through an agency under the
executive office of health and human services, and (ii) persons for whom hospitals and
community health centers claim reimbursement payments from the Health Safety Net
Fund, established pursuant to section 35 of chapter 118G; and (b) to determine the nature
of the coverage that is or was provided, including cost, scope, terms, periods of coverage,
and any identifying name, address or number of the policy of insurance. All public and
private entities who employ individuals in the commonwealth shall provide, when
requested by any employee applying for or receiving benefits provided by the division,
written information to the employee describing the availability of health insurance, if any,
provided by or through the employer. The failure of an employer to provide an employee
with the information shall not be grounds for denial of benefits by the division.

The division may, after notice and opportunity for hearing, garnish the wages,
salary, or other employment income of, and shall, with the assistance of the department
of revenue pursuant to section 3 of chapter 62D, withhold amounts from state tax refunds
to, any person who: (a) is required by court or administrative order to provide coverage of
the costs of health services to a child who is eligible for medical assistance pursuant to
this chapter; (b) has received payment from a third party for the costs of those services to
the child; but (c) has not used the payments to reimburse either the other parent or
guardian of the child or the provider of the services, to the extent necessary to reimburse
the division for expenditures for those costs.

SECTION 11. Sections 55 to 60, inclusive, of chapter 118E of the General Laws, inserted
by section 30 of said chapter 58 of the acts of 2006, are hereby repealed.

SECTION 12. Section 25 of said chapter 118G of the General Laws, as appearing in the
2004 Official Edition, is hereby amended by striking out, in lines 24 and 25, the words
"Health Care Security Trust Fund established pursuant to chapter 29D" and inserting in
place thereof the following words:- General Fund.

SECTION 13. Said chapter 118G of the General Laws, as most recently amended by
section 1 of chapter 268 of the acts of 2006, is hereby further amended by adding at the
end thereof the following sections:-
Section 34. As used in section 34 through section 39, inclusive, the following words
shall, unless the context clearly requires otherwise, have the following meanings:—
"Acute hospital", the teaching hospital of the University of Massachusetts Medical
School and any hospital licensed under section 51 of chapter 111 and which contains a
majority of medical-surgical, pediatric, obstetric and maternity beds, as defined by the
department of public health.
"Allowable reimbursement", payment to acute hospitals and community health centers
for health services provided to uninsured patients of the commonwealth under section 60
and any further regulations promulgated by the office.
“Ambulatory surgical center”, a distinct entity that operates exclusively for the purpose
of providing surgical services to patients not requiring hospitalization and meets the
requirements of the federal Health Care Financing Administration for participation in the
Medicare program.
“Ambulatory surgical center services”, services described for purposes of the Medicare
program under 42 U.S.C. 1395k(a)(2)(F)(I). These services include facility services only
and do not include surgical procedures.
“Bad debt”, an account receivable based on services furnished to a patient which: (i) is
regarded as uncollectible, following reasonable collection efforts consistent with
regulations of the office, which regulations shall allow third party payers to negotiate
with hospitals to collect the bad debts of its enrollees; (ii) is charged as a credit loss; (iii)
is not the obligation of a governmental unit or the federal government or any agency
thereof; and (iv) is not a reimbursable health care service.
“Community health center”, a health center operating in conformance with the
requirements of Section 330 of United States Public Law 95-626, including all
community health centers which file cost reports as requested by the division of health
care finance and policy.
“Critical access services”, those health services which are generally provided only by
acute hospitals, as further defined in regulations promulgated by the division.
“Director”, the director of the health safety net office.
“DRG”, a patient classification scheme known as diagnosis related grouping, which
provides a means of relating the type of patients a hospital treats, such as its case mix, to
the cost incurred by the hospital.
“Emergency bad debt”, bad debt resulting from emergency services provided by an acute
hospital to an uninsured or underinsured patient or other individual who has an
emergency medical condition that is regarded as uncollectible, following reasonable
collection efforts consistent with regulations of the office.
“Emergency medical condition”, a medical condition, whether physical or mental,
manifesting itself by symptoms of sufficient severity, including severe pain, that the
absence of prompt medical attention could reasonably be expected by a prudent layperson
who possesses an average knowledge of health and medicine to result in placing the
health of the person or another person in serious jeopardy, serious impairment to body
function or serious dysfunction of any body organ or part or, with respect to a pregnant
woman, as further defined in section 1867(e)(1)(B) of the Social Security Act, 42 U.S.C.
1295dd(e)(1)(B).
“Emergency services”, medically necessary health care services provided to an individual
with an emergency medical condition.
“Financial requirements”, a hospital’s requirement for revenue which shall include, but
not be limited to, reasonable operating, capital and working capital costs, and the
reasonable costs associated with changes in medical practice and technology.
“Fund”, the Health Safety Net Trust Fund established pursuant to section 36.
“Fund fiscal year”, the 12-month period starting in October and ending in September.
“Gross patient service revenue”, the total dollar amount of a hospital’s charges for
services rendered in a fiscal year.
“Health services”, medically necessary inpatient and outpatient services as mandated
under Title XIX of the federal Social Security Act. Health services shall not include: (1)
nonmedical services, such as social, educational and vocational services; (2) cosmetic
surgery; (3) canceled or missed appointments; (4) telephone conversations and
consultations; (5) court testimony; (6) research or the provision of experimental or
unproven procedures including, but not limited to, treatment related to sex-reassignment
surgery and pre-surgery hormone therapy; and (7) the provision of whole blood, but the
administrative and processing costs associated with the provision of blood and its
derivatives shall be payable.
“Office”, the health safety net office established pursuant to section 35.
“Payments subject to surcharge”, all amounts paid, directly or indirectly, by surcharge
payors to acute hospitals for health services and ambulatory surgical centers for
ambulatory surgical center services; provided, however, that “payments subject to
surcharge” shall not include: (i) payments, settlements and judgments arising out of third
party liability claims for bodily injury which are paid under the terms of property or
casualty insurance policies; (ii) payments made on behalf of Medicaid recipients,
Medicare beneficiaries or persons enrolled in policies issued under chapter 176K or
similar policies issued on a group basis; and provided further, that “payments subject to
surcharge” may exclude amounts established pursuant to regulations promulgated by the
division for which the costs and efficiency of billing a surcharge payor or enforcing
collection of the surcharge from a surcharge payor would not be cost effective.
“Pediatric hospital”, an acute care hospital which limits services primarily to children and
which qualifies as exempt from the Medicare Prospective Payment system regulations.
“Pediatric specialty unit”, a pediatric unit of an acute care hospital in which the ratio of
licensed pediatric beds to total licensed hospital beds as of July 1, 1994 exceeded
0.20. In calculating that ratio, licensed pediatric beds shall include the total of all
pediatric service beds, and the total of all licensed hospital beds shall include the total of
all licensed acute care hospital beds, consistent with Medicare’s acute care hospital
reimbursement methodology as put forth in the Provider Reimbursement Manual Part 1,
Section 2405.3G.
“Private sector charges”, gross patient service revenue attributable to all patients less
gross patient service revenue attributable to Titles XVIII and XIX, other public-aided
patients, reimbursable health services and bad debt.
“Reimbursable health services”, health services provided to uninsured and underinsured
patients who are determined to be financially unable to pay for their care, in whole or
part, under applicable regulations of the office; provided that the health services are
emergency, urgent and critical access services provided by acute hospitals or services
provided by community health centers; and provided further, that such services shall not
be eligible for reimbursement by any other public or private third-party payer.
“Resident”, a person living in the commonwealth, as defined by the office by regulation;
provided, however, that such regulation shall not define as a resident a person who
moved into the commonwealth for the sole purpose of securing health insurance under
this chapter. Confinement of a person in a nursing home, hospital or other medical
institution shall not in and of itself, suffice to qualify such person as a resident.
“Surcharge payor”, an individual or entity that pays for or arranges for the purchase of
health care services provided by acute hospitals and ambulatory surgical center services
provided by ambulatory surgical centers, as defined in this section; provided, however,
that the term “surcharge payor” shall not include Title XVIII and Title XIX programs and
their beneficiaries or recipients, other governmental programs of public assistance and
their beneficiaries or recipients and the workers’ compensation program established
pursuant to chapter 152.
“Underinsured patient”, a patient whose health insurance plan or self-insurance health
plan does not pay, in whole or in part, for health services that are eligible for
reimbursement from the health safety net trust fund, provided that such patient meets
income eligibility standards set by the office.
“Uninsured patient”, a patient who is a resident of the commonwealth, who is not covered
by a health insurance plan or a self-insurance health plan and who is not eligible for a
medical assistance program.

Section 35. (a) There shall be established within the division of health care
finance and policy a health safety net office which shall be under the supervision and
control of a director. The director shall be appointed by the commissioner, in consultation
with the secretary of health and human services and the Medicaid director, and shall be a
person of skill and experience in the field of health care finance and administration. The
director shall be the executive and administrative head of the office and shall be
responsible for administering and enforcing the provisions of law relative to the office
and to each administrative unit thereof. The director shall receive such salary as may be
determined by law, and shall devote his full time to the duties of his office. In the case of
an absence or vacancy in the office of the director, or in the case of disability as
determined by the commissioner, the commissioner may designate an acting director to
serve as director until the vacancy is filled or the absence or disability ceases. The acting
director shall have all the powers and duties of the director and shall have similar
qualifications as the director.

(b) The office shall have the following powers and duties:-

(i) to administer the Health Safety Net Trust Fund, established pursuant to section
36, and to require payments to the fund consistent with acute hospitals' and surcharge
payors' liability to the fund, as determined pursuant to sections 37 and 38, and any further
regulations promulgated by the office;

(ii) to set, after consultation with the office of Medicaid, reimbursement rates for
payments from the fund to acute hospitals and community health centers for reimbursable
health services provided to uninsured and underinsured patients and to disburse monies
from the fund consistent with such rates; provided that the office shall implement a fee-
for-service reimbursement system for acute hospitals;

(iii) to promulgate regulations further defining: (a) eligibility criteria for
reimbursable health services; (b) the scope of health services that are eligible for
reimbursement by the Health Safety Net Trust Fund; (c) standards for medical hardship;
and (d) standards for reasonable efforts to collect payments for the costs of emergency
care. The office shall implement procedures for verification of eligibility using the
eligibility system of the office of Medicaid and other appropriate sources to determine the
eligibility of uninsured and underinsured patients for reimbursable health services and
shall establish other procedures to ensure that payments from the fund are made for
health services for which there is no other public or private third party payer, including
disallowance of payments to acute hospitals and community health centers for free care
provided to individuals if reimbursement is available from other public or private
sources;

(iv) to develop programs and guidelines to encourage maximum enrollment of
uninsured individuals who receive health services reimbursed by the fund into health care
plans and programs of health insurance offered by public and private sources and to
promote the delivery of care in the most appropriate setting, provided that the programs
and guidelines are developed in consultation with the commonwealth health insurance
connector, established pursuant to chapter 176Q. These programs shall not deny
payments from the fund because services should have been provided in a more
appropriate setting if the hospital was required to provided the services pursuant to 42
U.S.C. 1395 (dd);

(v) to conduct a utilization review program designed to monitor the appropriateness
of services for which payments were made by the fund and to promote the delivery of
care in the most appropriate setting; and to administer demonstration programs that
reduce Health Safety Net Trust Fund liability to acute hospitals, including a
demonstration program to enable disease management for patients with chronic diseases,
substance abuse and psychiatric disorders through enrollment of patients in community
health centers and community mental health centers and through coordination between
these centers and acute hospitals, provided, that the office shall report the results of these
reviews annually to the joint committee on health care financing and the house and senate
committees on ways and means;

(vi) to administer, in consultation with the office of Medicaid, the Essential
Community Provider Trust Fund, established pursuant to section 2PPP of chapter 29, and
to make expenditures from that fund without further appropriation for the purpose of
improving and enhancing the ability of acute hospitals and community health centers to
serve populations in need more efficiently and effectively, including, but not limited to,
the ability to provide community-based care, clinical support, care coordination services,
disease management services, primary care services, and pharmacy management services
through a grant program. The office shall consider applications from acute hospitals and
community health centers in awarding the grants. The criteria for selection shall include,
but not be limited to, the following: (a) the financial performance of the provider as
determined, in the case of applications from acute hospitals, quarterly by the division of
health care finance and policy and by consulting other appropriate measurements of
financial performance; (b) the percentage of patients with mental or substance abuse
disorders served by a provider; (c) the numbers of patients served by a provider who are
chronically ill, elderly, or disabled; (d) the payer mix of the provider, with preference
given to acute hospitals where a minimum of 63 per cent of the acute hospital's gross
patient service revenue is attributable to Title XVIII and Title XIX of the federal Social
Security Act or other governmental payors, including reimbursements from the Health
Safety Net Trust Fund; (e) the percentage of total annual operating revenue that funding
received in fiscal years 2005 and 2006 from the Distressed Provider Expendable Trust
Fund comprised for the provider; and (f) the cultural and linguistic challenges presented
by the populations served by the provider.

(vii) to enter into agreements or transactions with any federal, state or municipal
agency or other public institution or with a private individual, partnership, firm,
corporation, association or other entity, and to make contracts and execute all instruments
necessary or convenient for the carrying on of its business;

(viii) to secure payment, without imposing undue hardship upon any individual,
for unpaid bills owed to acute hospitals by individuals for health services that are
ineligible for reimbursement from the Health Safety Net Trust Fund which have been
accounted for as bad debt by the hospital and which are voluntarily referred by a hospital
to the department for collection; provided, however that such unpaid charges shall be
considered debts owed to the commonwealth and all payments received shall be credited
to the fund; and provided, further, that all actions to secure such payments shall be
conducted in compliance with a protocol previously submitted by the office to the joint
committee on health care financing;

(ix) to require hospitals and community health centers to submit to the office data
that it reasonably considers necessary;

(x) to make, amend and repeal rules and regulations to effectuate the efficient use
of monies from the Health Safety Net Trust Fund; provided, however, that the regulations
shall be promulgated only after notice and hearing and only upon consultation with the
board of the commonwealth health insurance connector, the secretary of health and
human services, the director of the office of Medicaid and representatives of the
Massachusetts Hospital Association, the Massachusetts Council of Community Hospitals,
the Alliance of Massachusetts Safety Net Hospitals and the Massachusetts League of
Community Health Centers; and

(xi) to provide an annual report at the close of each fund fiscal year, in consultation
with the office of Medicaid, to the joint committee on health care financing and the house
and senate committees on ways and means, evaluating the processes used to determine
eligibility for reimbursable health services, including the Virtual Gateway, so called. Said
report shall include, but not be limited to, the following: (a) an analysis of the
effectiveness of these processes in enforcing eligibility requirements for publicly-funded
health programs and in enrolling uninsured residents into programs of health insurance
offered by public and private sources; (b) an assessment of the impact of these processes
on the level of reimbursable health services by providers; and (c) recommendations for
ongoing improvements that will enhance the performance of eligibility determination
systems and reduce hospital administrative costs.

Section 36. (a) There shall be established and set up on the books of the
commonwealth a fund to be known as the Health Safety Net Trust Fund, in this section
and in sections 37 to 39, inclusive, called the fund, which shall be administered by the
office. Expenditures from the fund shall not be subject to appropriation unless otherwise
required by law. The purpose of the fund shall be to maintain a health care safety net by
reimbursing hospitals and community health centers for a portion of the cost of
reimbursable health services provided to low-income, uninsured or underinsured
residents of the commonwealth. The office shall administer the fund using such methods,
policies, procedures, standards and criteria that it deems necessary for the proper and
efficient operation of the fund and programs funded by it in a manner designed to
distribute the fund resources as equitably as possible.

(b) The fund shall consist of all amounts paid by acute hospitals and surcharge
payors pursuant to sections 37 and 38; all appropriations for the purpose of payments to
acute hospitals or community health centers for health services provided to uninsured and
underinsured residents; any transfers from the Commonwealth Care Trust Fund,
established pursuant to section 2OOO of chapter 29; and all property and securities
acquired by and through the use of monies belonging to the fund and all interest thereon.
Amounts placed in the fund shall, except for amounts transferred to the Commonwealth
Care Trust Fund, be expended by the office for payments to hospitals and community
health centers for reimbursable health services provided to uninsured and underinsured
residents of the commonwealth, consistent with the requirements of this section and
section 39 and the regulations promulgated by the office; provided, however, that
$6,000,000 shall be expended annually from the fund for demonstration projects that use
case management and other methods to reduce the liability of the fund to acute hospitals.
Any annual balance remaining in the fund after these payments have been made shall be
transferred to the Commonwealth Care Trust Fund. All interest earned on the amounts in
the fund shall be deposited or retained in the fund. The director shall from time to time
requisition from the fund amounts that he considers necessary to meet the current
obligations of the office for the purposes of the fund and estimated obligations for a
reasonable future period.

Section 37. (a) An acute hospital's liability to the fund shall equal the product of (1)
the ratio of its private sector charges to all acute hospitals' private sector charges; and (2)
$160,000,000. Annually, prior to October 1, the office, in consultation with the office of
Medicaid, shall establish each acute hospital's liability to the fund using the best data
available, as determined by the division, and shall update each acute hospital's liability to
the fund as updated information becomes available. The office shall specify by regulation
an appropriate mechanism for interim determination and payment of an acute hospital's
liability to the fund. An acute hospital's liability to the fund shall in the case of a transfer
of ownership be assumed by the successor in interest to the acute hospital.

(b) The office shall establish by regulation an appropriate mechanism for enforcing
an acute hospital's liability to the fund in the event that an acute hospital does not make a
scheduled payment to the fund. These enforcement mechanisms may include (1)
notification to the office of Medicaid requiring an offset of payments on the Title XIX
claims of any such acute hospital or any health care provider under common ownership
with the acute care hospital or any successor in interest to the acute hospital, and (2) the
withholding by the office of Medicaid of the amount of payment owed to the fund,
including any interest and late fees, and the transfer of the withheld funds into the fund. If
the office of Medicaid offsets claims payments as ordered by the office, it shall not be
considered to be in breach of contract or any other obligation for the payment of non-
contracted services, and providers whose payment is offset pursuant to an order of the
division shall serve all Title XIX recipients under the contract then in effect with the
office of Medicaid, or, in the case of a non-contracting or disproportionate share hospital,
under its obligation for providing services to Title XIX recipients pursuant to this chapter.
In no event shall the office direct the office of Medicaid to offset claims unless an acute
hospital has maintained an outstanding obligation to the fund for a period longer than 45
days and has received proper notice that the division intends to initiate enforcement
actions pursuant to regulations promulgated by the office.

Section 38. (a) Acute hospitals and ambulatory surgical centers shall assess a
surcharge on all payments subject to surcharge as defined in section 1. The surcharge
shall be distinct from any other amount paid by a surcharge payor for the services of an
acute hospital or ambulatory surgical center. The surcharge amount shall equal the
product of (i) the surcharge percentage and (ii) amounts paid for these services by a
surcharge payor. The office shall calculate the surcharge percentage by dividing
$160,000,000 by the projected annual aggregate payments subject to the surcharge. The
office shall determine the surcharge percentage before the start of each fund fiscal year
and may redetermine the surcharge percentage before April 1 of each fund fiscal year if
the office projects that the initial surcharge established the previous October will produce
less than $150,000,000 or more than $170,000,000. Before each succeeding October 1,
the office shall redetermine the surcharge percentage incorporating any adjustments from
earlier years. In each determination or redetermination of the surcharge percentage, the
office shall use the best data available as determined by the division and may consider the
effect on projected surcharge payments of any modified or waived enforcement pursuant
to subsection (e). The office shall incorporate all adjustments, including, but not limited
to, updates or corrections or final settlement amounts, by prospective adjustment rather
than by retrospective payments or assessments.

(b) Each acute hospital and ambulatory surgical center shall bill a surcharge payor
an amount equal to the surcharge described in subsection (a) as a separate and identifiable
amount distinct from any amount paid by a surcharge payor for acute hospital or
ambulatory surgical center services. Each surcharge payor shall pay the surcharge amount
to the office for deposit in the Health Safety Net Trust Fund on behalf of said acute
hospital or ambulatory surgical center. Upon the written request of a surcharge payor, the
office may implement another billing or collection method for the surcharge payor;
provided, however, that the office has received all information that it requests which is
necessary to implement such billing or collection method; and provided further, that the
office shall specify by regulation the criteria for reviewing and approving such requests
and the elements of such alternative method or methods.

(c) The office shall specify by regulation appropriate mechanisms that provide for
determination and payment of a surcharge payor's liability, including requirements for
data to be submitted by surcharge payors, acute hospitals and ambulatory surgical
centers.

(d) A surcharge payor's liability to the fund shall in the case of a transfer of
ownership be assumed by the successor in interest to the surcharge payor.

(e) The office shall establish by regulation an appropriate mechanism for enforcing
a surcharge payor's liability to the fund if a surcharge payor does not make a scheduled
payment to the fund; provided, however, that the office may, for the purpose of
administrative simplicity, establish threshold liability amounts below which enforcement
may be modified or waived. Such enforcement mechanism may include assessment of
interest on the unpaid liability at a rate not to exceed an annual percentage rate of 18 per
cent and late fees or penalties at a rate not to exceed 5 per cent per month. Such
enforcement mechanism may also include notification to the office of Medicaid requiring
an offset of payments on the claims of the surcharge payor, any entity under common
ownership or any successor in interest to the surcharge payor, from the office of
Medicaid in the amount of payment owed to the fund including any interest and penalties,
and to transfer the withheld funds into said fund. If the office of Medicaid offsets claims
payments as ordered by the office, the office of Medicaid shall be considered not to be in
breach of contract or any other obligation for payment of non-contracted services, and a
surcharge payor whose payment is offset pursuant to an order of the division shall serve
all Title XIX recipients under the contract then in effect with the executive office of
health and human services. In no event shall the office direct the office of Medicaid to
offset claims unless the surcharge payor has maintained an outstanding liability to the
fund for a period longer than 45 days and has received proper notice that the office
intends to initiate enforcement actions pursuant to regulations promulgated by the office.

(f) If a surcharge payor fails to file any data, statistics or schedules or other
information required pursuant to this chapter or by any regulation promulgated by the
office, the office shall provide written notice to the payor. If a surcharge payor fails to
provide required information within 2 weeks after the receipt of written notice, or
falsifies the same, he shall be subject to a civil penalty of not more than $5,000 for each
day on which the violation occurs or continues, which penalty may be assessed in an
action brought on behalf of the commonwealth in any court of competent jurisdiction.
The attorney general shall bring any appropriate action, including injunctive relief, that
may be necessary for the enforcement of this chapter.

Section 39. (a) Reimbursements from the fund to hospitals and community health
centers for health services provided to uninsured individuals shall be subject to further
rules and regulations promulgated by the office and shall be made in the following
manner: (i) reimbursements made to acute hospitals shall be based on actual claims for
health services provided to uninsured and underinsured patients that are submitted to the
office, and shall be made only after determination that the claim is eligible for
reimbursement pursuant to this chapter and any additional regulations promulgated by the
office. Reimbursements for health services provided to residents of other states and
foreign countries shall be prohibited, and the office shall make payments to acute
hospitals using fee-for-service rates calculated as provided in paragraphs (iv) and (v); (ii)
the office shall, in consultation with the office of Medicaid, develop and implement
procedures to verify the eligibility of individuals for whom health services are billed to
the fund and to ensure that other coverage options are used fully before services are billed
to the fund, including procedures adopted pursuant to section 36. The office shall review
all claims billed to the fund to determine whether the patient is eligible for medical
assistance pursuant to the provisions of this chapter and whether any third party is
financially responsible for the costs of care provided to the patient. In making these
determinations, the office shall verify the insurance status of each individual for whom a
claim is made using all sources of data available to the office. The office shall refuse to
allow payments or shall disallow payments to acute hospitals and community health
centers for free care provided to individuals if reimbursement is available from other
public or private sources; provided, however, that payments shall not be denied from the
fund because services should have been provided in a more appropriate setting if the
hospital was required to provide these services pursuant to 42 U.S.C. 1395(dd); (iii) the
office shall require acute hospitals and community health centers to screen each applicant
for reimbursed care for other sources of coverage and for potential eligibility for
government programs, and to document the results of that screening. If an acute hospital
or community health center determines that an applicant is potentially eligible for
Medicaid or for the commonwealth care health insurance program, established pursuant
to chapter 118H, or another assistance program, the acute hospital or community health
center shall assist the applicant in applying for benefits under that program. The office
shall audit the accounts of acute hospitals and community health centers to determine
compliance with this section and shall deny payments from the fund for any acute
hospital or community health center that fails to document compliance with this section;
(iv) for the purposes of paying community health centers for health services provided to
uninsured individuals pursuant to this section, the office shall pay community health
centers a base rate that shall be no less than the then-current Medicare Federally
Qualified Health Center rate as required pursuant to 42 U.S.C. 13951 (a)(3), and the
office shall add payments for additional services not included in the base rate, including,
but not limited to, EPSDT services, 340B pharmacy, urgent care, and emergency room
diversion services; (vi) reimbursements to acute hospitals and community health centers
for bad debt shall be made upon submission of evidence, in a form to be determined by
the office, that reasonable efforts to collect the debt have been made; (v) the office shall
reimburse acute hospitals for health services provided to individuals based on the
payment systems in effect for acute hospitals used by the United States Department of
Health and Human Services Centers for Medicare & Medicaid Services to administer the
Medicare Program pursuant to Title XVIII of the Social Security Act, including all of
Medicare's adjustments for direct and indirect graduate medical education,
disproportionate share, outliers, organ acquisition, bad debt, new technology and capital
and the full amount of the annual increase in the Medicare hospital market basket index.
The office shall, in consultation with the office of Medicaid and the Massachusetts
Hospital Association, promulgate regulations necessary to modify these payment systems
to account for: (a) the differences between the program administered by the office and the
Title XVIII Medicare program, including the services and benefits covered; (b) grouper
and DRG relative weights for purposes of calculating the payment rates to reimburse
acute hospitals at rates no less than the rates they are reimbursed by Medicare; (c) the
extent and duration of covered services; (d) the populations served; and (e) any other
adjustments to the payment methodology pursuant to this section as considered necessary
by the office, based upon circumstances of individual hospitals.

Following implementation of this section, the office shall ensure that the allowable
reimbursement rates pursuant to this section for health services provided to uninsured
individuals shall not thereafter be less than rates of payment for comparable services
pursuant to the Medicare program, taking into account the adjustments required by this
section.

(b) By April 1 of the year preceding the start of the fund fiscal year, the office
shall, after consultation with the office of Medicaid, and using the best data available,
provide an estimate of the projected total reimbursable health services provided by acute
hospitals and community health centers and emergency bad debt costs, the total funding
available, and any projected shortfall after adjusting for reimbursement payments to
community health centers. If a shortfall in revenue exists in any fund fiscal year to cover
projected costs for reimbursement of health services, the office shall allocate that
shortfall in a manner that reflects each hospital's proportional financial requirement for
reimbursements from the fund, including, but not limited to, the establishment of a
graduated reimbursement system and pursuant to any additional regulations promulgated
by the office.

(c) The executive office of health and human services directly or through the
division shall enter into interagency agreements with the department of revenue to verify
income data for patients whose health care services are reimbursed by the Health Safety
Net Trust Fund and to recover payments made by the fund for services provided to
individuals who are ineligible to receive reimbursable health services or on whose behalf
the fund has paid for emergency bad debt. The division shall promulgate regulations
requiring acute hospitals to submit data that will enable the department of revenue to
pursue recoveries from individuals who are ineligible for reimbursed health services and
on whose behalf the fund has made payments to acute hospitals for emergency bad debt.
Any amounts recovered shall be deposited in the Health Safety Net Trust Fund,
established pursuant to section 36.

(d) The office shall not at any time make payments from the fund for any period in
excess of amounts that have been paid into or are available in the fund for that period, but
the office may temporarily prorate payments from the fund for cash flow purposes.

SECTION 14. Chapter 159B of the General Laws, as appearing in the 2004 Official
Edition, is hereby amended by striking out section 10, as so appearing, and inserting in
place thereof the following section:-

Section 10. Each interstate carrier by motor vehicle transporting over the ways within the
commonwealth for compensation shall register and identify with the department pursuant
to the federal Unified Carrier Registration Act of 2005. Each registration shall be
accompanied by a fee, the amount of which shall be determined by the board of directors
of the federal Unified Carrier Registration Plan.

SECTION 15. Section 4 of chapter 161B of the General Laws, as so appearing, is hereby
amended by striking, in line 6, the following words: “fourteen; and” and inserting in
place thereof the following:- fourteen; provided, further, that the appointment of said
administrator shall be subject to the approval of the secretary and the secretary shall not
approve any candidate who does not possess senior level management experience in 1 or
more of the following areas: engineering, construction, business, public transit, public or
private finance, or transportation; provided, further that the secretary may remove the
administrator for just cause; and

SECTION 16. Section 8 of said Chapter 161B of the General Laws, as so appearing, is
hereby amended by striking subsection (h) and inserting in place thereof the following
new section:-

(h) All current expenses of the authority shall be in accordance with an annual
budget prepared by the administrator and submitted to the advisory board, the secretary,
the secretary of administration and finance, the chairs of the joint committee on
transportation, and the chairs of the house and senate committees on ways and means no
later than February first of each year for the ensuing fiscal year. On or before June first
the advisory board shall approve said budget as submitted or subject it to such itemized
reductions therein as the advisory board shall deem appropriate. After the advisory board
has approved said budget the secretary of transportation shall approve said budget as
submitted or shall subject it to such itemized reductions as he shall deem appropriate. An
administrator must receive approval from the secretary for any additional costs after the
budget has been approved by the advisory board.

SECTION 17. Sections 2 and 7 of chapter 772 of the acts of 1987 are hereby repealed.

SECTION 18. Section 7A of chapter 177 of the acts of 2001, as amended by section 13
of chapter 364 of the acts of 2002, is hereby repealed.

SECTION 19. Section 80 of chapter 177 of the acts of 2001, as amended by section 13 of
chapter 364 of the acts of 2002, is hereby repealed.

SECTION 20. The first sentence of section 9 of chapter 61 of the acts of 2002 is hereby
amended by striking out the figure "2007" and inserting in place thereof the following
figure:- 2008.

SECTION 21. Chapter 58 of the acts of 2006 is hereby amended by striking out section
128 and inserting in place thereof the following section:

Section 128. Notwithstanding any general or special law to the contrary except for
section 13B of chapter 118E of the General Laws, in fiscal year 2007 $90,000,000 shall
be made available from the Commonwealth Care Trust Fund, established pursuant to
section 2OOO of chapter 29 of the General Laws, to pay for an increase in the Medicaid
rates paid to acute hospitals, as defined in section 1 of chapter 118G of the General Laws,
and physicians, provided that not less than 15 per cent of the increase be allocated to rate
increases for physicians; provided further, that in fiscal year 2008, an additional
$90,000,000, for a total of $180,000,000, shall be made available to pay for an increase in
the Medicaid rates paid to acute hospitals, as defined in section 1 of chapter 118G of the
General Laws, and physicians, provided that not less than 15 per cent of the increase be
allocated to rate increases for physicians; and provided further, that in fiscal year 2009,
an additional $90,000,000, for a total of $270,000,000, shall be made available to pay for
an increase in the Medicaid rates paid to acute hospitals, as defined in said section 1 of
said chapter 118G, and physicians, provided that not less than 15 per cent of the increase
be allocated to rate increases for physicians. A portion of the fiscal year 2008 and fiscal
year 2009 hospital rate increases relating to adherence to quality standards and
achievement of performance benchmarks pursuant to section 13B of chapter 118E of the
General Laws may be paid in the succeeding fiscal year. For purposes of payments to
hospitals pursuant to this section, fiscal year shall mean the hospital fiscal year, and for
purposes of any payments to physicians pursuant to this section, fiscal year shall mean
the state fiscal year. Fiscal year 2008 and 2009 payments are subject to specific
appropriation to the executive office of health and human services MassHealth program
accounts for this purpose.

SECTION 22. Notwithstanding any general or special law to the contrary, the
comptroller, in consultation with the secretary of health and human services, shall
develop a schedule for transferring not less than $28,000,000 from the General Fund to
the Essential Community Provider Trust Fund established pursuant to section 2PPP of
chapter 29 of the General Laws for the purpose of making payments to hospitals and
community health centers in fiscal year 2008. The secretary shall authorize expenditures
from the fund without further appropriation for the purpose of a grant program to
improve and enhance the ability of hospitals and community health centers to serve
populations in need, more efficiently and effectively, including, but not limited to, the
ability to provide community-based care, clinical support, care coordination services,
disease management services, primary care services and pharmacy management services
through a grant program. The office shall consider applications from acute hospitals, non-
acute hospitals, and community health centers in awarding the grants; provided, however,
that the office shall publicize the existence of the grant program to eligible providers and
shall award grants no later than September 1, 2007. The criteria for selection shall
include, but not be limited to, the following: (i) financial performance measures including
negative operating margins, insufficient cash flow, technical bond default and the
uncertain ability to cover long-term obligations, as well as potential for loss of critical
community services; (ii) the percentage of patients with mental or substance abuse
disorders served by a provider; (iii) the numbers of patients served by a provider who are
chronically ill, elderly, or disabled, provided that in the case of a community health
center, that preference be given to the provision of a Program of All-Inclusive Care for
the Elderly; (iv) the payer mix of the provider, with preference given to acute hospitals
where a minimum of 63 per cent of the acute hospital’s gross patient service revenue is
attributable to Title XVIII and Title XIX of the federal Social Security Act or other
governmental payors, including reimbursements from the Health Safety Net Trust Fund;
(v) the percentage of total annual operating revenue that received funding in fiscal years
2005 and 2006 from the Distressed Provider Expendable Trust Fund comprised for the
provider; (vi) the percentage of total annual operating revenue that received funding in
fiscal year 2007 from the Essential Community Provided Trust Fund established pursuant
to section 36 of chapter 118G of the General Laws; (vii) the cultural and linguistic
challenges presented by the populations served by the provider; (viii) a documented
critical need for investment in information technology such as Computerized Physician
Order Entry systems but without access to capital to finance such investments; and
(ix) the provision by a community health center of 24 hour emergency services.
The secretary may further authorize distributions on an emergency basis to acute
hospitals, non-acute hospitals and community health centers facing extreme financial
distress or closure upon petition from the provider. The emergency funds shall be
distributed by the secretary within 2 weeks of petition by a provider that is determined to
be facing extreme financial distress or closure at an amount determined by the secretary.

SECTION 23. Notwithstanding any general or special law to the contrary, the
comptroller shall, in consultation with the state treasurer, the secretary of administration
and finance and the secretary of health and human services, develop a schedule for
transferring funds among the General Fund, the Commonwealth Care Trust Fund
established pursuant to section 2OOO of chapter 29 of the General Laws and the Health
Safety Net Trust Fund established pursuant to section 36 of chapter 118G of the General
Laws. Not less than $628,800,000 shall be transferred from the General Fund to the
Commonwealth Care Trust Fund and not less than $33,900,000 shall be transferred from
the Commonwealth Care Trust Fund to the Health Safety Net Trust Fund; provided
further, that the executive office of health and human services shall make expenditures
required for fiscal year 2008 pursuant to section 122 of chapter 58 of the acts of 2006.
The schedule shall provide for transfers in increments considered appropriate to meet the
cash flow needs of these funds. The transfers shall not begin before July 1, 2007 and shall
be completed on or before June 30, 2008. The secretary of administration and finance, in
consultation with the secretary of health and human services and the executive director of
the commonwealth health insurance connector, shall on a quarterly basis evaluate the
revenue needs of the health safety net program funded by the Health Safety Net Trust
Fund and the Commonwealth Care subsidized health insurance program funded from the
Commonwealth Care Trust Fund, and if necessary, transfer monies between these funds
for the purpose of ensuring that sufficient revenues are available to support projected
program expenditures. The secretary of health and human services in consultation with
the secretary of administration and finance and the executive director of the
commonwealth health insurance connector shall submit a quarterly report to the house
and senate committees on ways and means and joint committee on healthcare financing
which shall include, but not be limited to, the projected and actual expenditures and
revenues for the Commonwealth Care Trust Fund and any transfers made between the
Health Safety Net Trust Fund and the Commonwealth Care Trust Fund.

Notwithstanding any general or special law to the contrary, on or before October 1,
2007 and without further appropriation, the comptroller shall transfer from the General
Fund to the Health Safety Net Trust Fund established pursuant to section 36 of chapter
118G of the General Laws, an amount not to exceed $45,000,000 for the purpose of
making initial gross payments to qualifying acute care hospitals and community health
centers for the hospital fiscal year beginning October 1, 2007. These payments shall be
made to hospitals before, and in anticipation of, the payment by hospitals of their gross
liability to this fund. The comptroller shall transfer from this fund to the General Fund
not later than June 30, 2008, the amount of the transfer authorized in this section and any
allocation of that amount as certified by the director of the health safety net office.

SECTION 24. Notwithstanding any general or special law to the contrary, the
comptroller shall, in consultation with the office of the state treasurer, the executive
office for administration and finance, and the executive office of health and human
services, develop a schedule and make a series of transfers not to exceed $251,000,000
from the General Fund to the MassHealth provider payment account in the Medical
Assistance Trust Fund established pursuant to section 2QQQ of chapter 29 of the General
Laws.

SECTION 25. Notwithstanding any general or special law to the contrary, not less than
10 days after the effective date of this act, the comptroller shall transfer $10,000,000
from the General Fund to the Massachusetts Cultural Facilities Fund established pursuant
to section 42 of chapter 23G of the General Laws.

SECTION 26. Notwithstanding any general or special law to the contrary, the
comptroller shall, according to a schedule developed in consultation with the state
treasurer and the secretary of administration and finance, transfer $345,053,006 from the
General Fund to the State Retiree Benefits Trust Fund established pursuant to section 24
of chapter 32A of the General Laws.

SECTION 27. Notwithstanding any general or special law to the contrary, the
comptroller shall, no later than June 30, 2008, transfer $150,000,000 to the General Fund
from the Commonwealth Stabilization Fund established pursuant to section 2H of chapter
29 of the General Laws.

SECTION 28. Notwithstanding any general or special law to the contrary, during fiscal
year 2008 the comptroller shall not transfer 0.5 per cent of the total revenue from taxes in
the preceding fiscal year to the Commonwealth Stabilization Fund as otherwise required
pursuant to clause (a) of section 5C of chapter 29 of the General Laws.

SECTION 29. Notwithstanding any general or special law to the contrary, the
comptroller shall, no later than June 30, 2008, transfer from the Commonwealth
Stabilization Fund to the General Fund the lesser of: (1) the interest paid on the
Commonwealth Stabilization Fund during fiscal year 2008, or (2) $75,000,000.

SECTION 30. Notwithstanding any general or special law to the contrary, the
comptroller shall not less than 10 days after the effective date of this act, transfer
$150,000,000 to the General Fund from the Health Care Security Trust Fund established
pursuant to section 1 of chapter 29D of the General Laws.

SECTION 31. Notwithstanding any general or special law to the contrary, no later than
June 30, 2008 the comptroller shall transfer the balance in the Health Care Quality
Improvement Trust Fund established pursuant to section 2EEE of chapter 29 of the
General Laws, to the General Fund.

SECTION 32. Notwithstanding any general or special law to the contrary, during fiscal
year 2008, the comptroller shall transfer from the Health Care Security Trust established
pursuant to chapter 29D of the General Laws to the General Fund an amount equal to 100
per cent of the total of all payments received by the commonwealth in fiscal year 2008
pursuant to the master settlement agreement in the action known as Commonwealth of
Massachusetts v. Phillip Morris, Inc. et. al., Middlesex Superior Court, No. 95-7378 and
100 per cent of the earnings generated in fiscal year 2008 from the Health Care Security
Trust as certified by the comptroller pursuant to paragraph (f) of section 3 of chapter 29D
of the General Laws for certain health care expenditures appropriated in section 2 of this
act.

SECTION 33. Notwithstanding any general or special law to the contrary, pension
benefits authorized pursuant to chapters 712 and 721 of the acts of 1981, chapter 154 of
the acts of 1983, chapter 67 of the acts of 1988, and chapter 621 of the acts of 1989, for
the compensation of veterans who may be retired by the state board of retirement,
including individuals formerly in the service of the division of employment security
whose compensation for that service was paid in full from a grant from the federal
government and for the cost of medical examinations in connection therewith, for
pensions of retired judges or their widows or widowers, for retirement allowances of
certain employees formerly in the service of the administrative division of the
metropolitan district commission, for retirement allowances of certain veterans and police
officers formerly in the service of the metropolitan district commission, for retirement
allowances of certain veterans formerly in the service of the metropolitan sewerage
district, for retirement allowances of certain veterans formerly in the service of the
metropolitan water system and for annuities for widows or widowers of certain former
members of the uniformed branch of the state police shall be funded from the Pension
Reserves Investment Trust Fund, established pursuant to subdivision (8) of section 22 of
chapter 32 of the General Laws. This section shall continue in effect after June 30, 2008.

SECTION 34. Notwithstanding any general or special law to the contrary, the amounts
transferred pursuant to paragraph (1) of section 22C of chapter 32 of the General Laws
shall be made available for the commonwealth's Pension Liability Fund established
pursuant to section 22 of said chapter 32. The amounts transferred pursuant to said
paragraph (1) of said section 22C of said chapter 32 shall meet the commonwealth's
obligations pursuant to said section 22C of said chapter 32, including retirement benefits
payable by the state employees' and the state teachers' retirement systems, for the costs
associated with a 3 per cent cost-of-living adjustment pursuant to section 102 of said
chapter 32, the reimbursement of local retirement systems for previously authorized cost-
of-living adjustments pursuant to said section 102 of said chapter 32, and for the costs of
increased survivor benefits pursuant to chapter 389 of the acts of 1984. The state board of
retirement and each city, town, county and district shall verify these costs, subject to the
rules adopted by the treasurer. The treasurer may make payments upon a transfer of funds
to reimburse certain cities and towns for pensions to retired teachers, including any other
obligations which the commonwealth has assumed on behalf of any retirement system
other than the state employees' or state teachers' retirement systems and also including the
commonwealth's share of the amounts to be transferred pursuant to section 22B of said
chapter 32 and the amounts to be transferred pursuant to clause (a) of the last paragraph
of section 21 of chapter 138 of the General Laws. All payments for the purposes
described in this section shall be made only pursuant to distribution of monies from the
fund, and any distribution and the payments for which distributions are required shall be
detailed in a written report filed quarterly by the commissioner of administration with the
house and senate committees on ways and means and the joint committee on public
service in advance of this distribution. Distributions shall not be made in advance of the
date on which a payment is actually to be made. The state board of retirement may
expend an amount for the purposes of the board of higher education's optional retirement
program pursuant to section 40 of chapter 15A of the General Laws. To the extent that
the amount transferred pursuant to paragraph (1) of section 22C of said chapter 32
exceeds the amount necessary to adequately fund the annual pension obligations, the
excess amount shall be credited to the Pension Reserves Investment Trust Fund of the
commonwealth for the purpose of reducing the unfunded pension liability of the
commonwealth.

SECTION 35. Notwithstanding any general or special law to the contrary, in the event
that any district attorney fails to comply with reporting language relevant to the use of
drug forfeiture funds, so called, inserted in line items 0340-0100, 0340-0200, 0340-0300,
0340-0400, 0340-0500, 0340-0600, 0340-0700, 0340-0800, 0340-0900, 0340-1000, and
0340-1100 of section 2 of this act, the house and senate committees on ways and means
shall notify the state comptroller of such failure to comply. A district attorney may
request in writing a reasonable extension of the reporting period from the house and
senate committees on ways and means. If such an extension is requested, the house and
senate committees on ways and means shall not notify the state comptroller of a failure to
comply with the reporting requirement until the extension period has elapsed. Upon
receipt of said notification, the state comptroller shall make available to the witness
protection board, established pursuant to section 2 of chapter 263A of the General Laws,
the balance of said district attorney’s Special Law Enforcement Trust Fund, established
pursuant to section 47 of chapter 94C of the General Laws, and any additional money
transferred into said trust fund after the reporting date.

SECTION 36. (a) Notwithstanding any general or special law to the contrary, upon the
request of the board of selectmen in a town, the city council in a plan E city or the mayor
in any other city, the department of revenue may recalculate the minimum required local
contribution, as defined in section 2 of chapter 70 of the General Laws, in the fiscal year
ending June 30, 2008. Based on the criteria established in this section, the department
shall recalculate the minimum required local contribution for a municipality’s local and
regional schools and shall certify the amounts calculated to the department of education.
(b) A city or town that used qualifying revenue amounts in a fiscal year which will
not be available for use in the next fiscal year, or that will be required to use revenues for
extraordinary non school-related expenses for which it did not have to use revenues in the
preceding fiscal year, or that has an excessive certified municipal revenue growth factor
which is also greater than or equal to 1.5 times the state average municipal revenue
growth factor, may appeal to the department of revenue not later than October 1, 2007 for
an adjustment of its minimum required local contribution and net school spending.
(c) If a claim is determined to be valid, the department of revenue may reduce
proportionately the minimum required local contribution amount based on the amount of
shortfall in revenue or based on the amount of increase in extraordinary expenditures in
the current fiscal year, but no adjustment to the minimum required local contribution on
account of an extraordinary expense in the budget for the fiscal year ending on June 30,
2008 shall affect the calculation of the minimum required local contribution in
subsequent fiscal years. Qualifying revenue amounts shall include, but not be limited to,
extraordinary amounts of free cash, overlay surplus and other available funds.
(d) If, upon submission of adequate documentation, the department of revenue
determines that the municipality’s claim regarding an excessive municipal revenue
growth factor is valid, the department shall recalculate the municipal revenue growth
factor and the department of education shall use the revised growth factor to calculate the
preliminary local contribution, the minimum required local contribution and any other
factor that directly or indirectly uses the municipal revenue growth factor. Any relief
granted as a result of an excessive municipal revenue growth factor shall be a permanent
reduction in the minimum required local contribution.
(e) The board of selectmen in a town, the city council in a plan E city, the mayor in
any other city, or a majority of the member municipalities of a regional school district,
which used qualifying revenue amounts in a fiscal year that will not be available for use
in the next fiscal year, may appeal to the department of revenue not later than October 1,
2007 for an adjustment to its net school spending requirement. If the claim is determined
to be valid, the department of revenue shall reduce the net school spending requirement
based on the amount of the shortfall in revenue and reduce the minimum required local
contribution of member municipalities accordingly. Qualifying revenue amounts shall
include, but not be limited to, extraordinary amounts of excess and deficiency, surplus
and uncommitted reserves.
(f) If the regional school budget has already been adopted by two-thirds of the
member municipalities then, upon a majority vote of the member municipalities, the
regional school committee shall adjust the assessments of the member municipalities in
accordance with the reduction in minimum required local contributions approved by the
department of revenue or the department of education in accordance with this section.
(g) Notwithstanding clause (14) of section 3 of chapter 214 of the General Laws or
any other general or special law to the contrary, the amounts so determined pursuant to
this section shall be the minimum required local contribution described in chapter 70 of
the General Laws. The department of revenue and the department of education shall
notify the house and senate committees on ways and means and the joint committee on
education of the amount of any reduction in the minimum required local contribution
amount.
(h) If a city or town has an approved budget that exceeds the recalculated
minimum required local contribution and net school spending amounts for its local school
system or its recalculated minimum required local contribution to its regional school
districts as provided by this section, the local appropriating authority shall determine the
extent to which the community shall avail itself of any relief authorized pursuant to this
section.
(i) The amount of financial assistance due from the commonwealth in fiscal year
2008 pursuant to chapter 70 of the General Laws or any other law shall not be changed
on account of any redetermination of the minimum required local contribution pursuant
to this section.
(j) The department of revenue and the department of education shall issue
guidelines for their respective duties pursuant to this section.

SECTION 37. Notwithstanding any general or special law to the contrary, in order to
maintain the fiscal viability of the subsidized catastrophic prescription drug insurance
program, hereinafter referred to as the prescription advantage program, authorized by
section 39 of chapter 19A of the General Laws, cost sharing required of enrollees in the
form of co-payments, premiums and deductibles, or any combination thereof, may be
adjusted by the department of elder affairs to reflect price trends for outpatient
prescription drugs, as determined by the secretary of elder affairs. In addition to the
eligibility requirements set forth in said section 39 of chapter 19A, to be considered
eligible for the prescription advantage program, individuals who receive Medicare and
are applying for, or are then enrolled in, the prescription advantage program shall also be
enrolled in a Medicare prescription drug plan, a Medicare Advantage prescription drug
plan, or in a plan which provides creditable prescription drug coverage as defined by
section 104 of the Medicare Prescription Drug Improvement and Modernization Act of
2003, hereinafter referred to as MMA, and which provides coverage of the cost of
prescription drugs actuarially equal to or better than that provided by Medicare Part D,
hereinafter a creditable coverage plan.

In addition to the eligibility requirements set forth in said section 39 of chapter
19A, to be considered eligible for the prescription advantage program, individuals who
receive Medicare and are applying for, or are then enrolled in, the prescription advantage
program, who may qualify for the low-income subsidy, so-called, provided pursuant to
the MMA Subpart P-Premiums and cost-sharing subsidies for low-income individuals,
shall apply for those subsidies. To the extent permitted by MMA and regulations
promulgated thereunder, and all other applicable federal law, the prescription advantage
program may apply on behalf of a member for enrollment into a Medicare prescription
drug plan or for the low-income subsidy provided pursuant to MMA and may receive
information about the member's eligibility and enrollment status necessary for the
operation of the prescription advantage program.
For enrollees who qualify for enrollment in a Medicare Part D plan, the
prescription advantage program will provide a supplemental source of financial
assistance for prescription drug costs, hereinafter referred to as "supplemental assistance"
in lieu of the catastrophic prescription drug coverage provided pursuant to said section 39
of chapter 19A. The prescription advantage program will provide supplemental assistance
for premiums, deductibles, payments and co-payments required by a Medicare
prescription drug plan or Medicare Advantage prescription drug plan, and will provide
supplemental assistance for deductibles, payments and co-payments required by a
creditable coverage plan. The department shall establish the amount of the supplemental
assistance it will provide enrollees based on a sliding income scale and the coverage
provided by the enrollees' Medicare prescription drug plan, Medicare Advantage
prescription drug plan, or creditable coverage plan. In addition to the eligibility
requirements set forth in section 39 of chapter 19A, to be considered eligible for the
prescription advantage program, an individual must have a household income of less than
500 per cent of the poverty guidelines updated periodically in the Federal Register by the
U.S. Department of Health and Human Services pursuant to the authority of 42 U.S.C.
9902(2). Residents of the commonwealth who are not eligible for Medicare will continue
to be eligible for the prescription advantage program pursuant to said section 39 of
chapter 19A.

SECTION 38. Notwithstanding any general or special law to the contrary, the executive
office of health and human services may, pursuant to section 16 of chapter 6A of the
General Laws, acting in its capacity as the single state agency pursuant to Title XIX of
the Social Security Act and as the principal agency for all of the agencies within the
executive office and other federally assisted programs administered by the executive
office, enter into interdepartmental services agreements with the University of
Massachusetts Medical School to perform activities that the secretary, in consultation
with the comptroller, determines are appropriate and within the scope of the proper
administration of Title XIX and other federal funding provisions to support the programs
and activities of the executive office. These activities shall include: (1) providing
administrative services, including, but not limited to, activities such as providing the
medical expertise to support or administer utilization management activities, determining
eligibility based on disability, supporting case management activities and similar
initiatives; (2) providing consulting services related to quality assurance, program
evaluation and development, integrity and soundness and project management; and (3)
providing activities and services for the purpose of pursuing federal reimbursement or
avoiding costs, third party liability and recouping payments to third parties. Federal
reimbursement for any expenditures made by the University of Massachusetts Medical
School relative to federally reimbursable services the university provides under these
interdepartmental service agreements or other contracts with the executive office of
health and human services shall be distributed to the university, and recorded distinctly in
the state accounting system. The executive office of health and human services may
negotiate contingency fees for activities and services related to the purpose of pursuing
federal reimbursement or avoiding costs, and the comptroller shall certify these fees and
pay them upon the receipt of this revenue, reimbursement or demonstration of costs
avoided. Contracts for contingency fees shall not extend longer than 3 years, and shall not
be renewed without prior review and approval from the executive office of administration
and finance. The executive office of health and human services shall not pay contingency
fees in excess of $40,000,000 for state fiscal year 2008. The secretary of the executive
office of health and human services shall submit to the secretary of administration and
finance and the senate and house committees on ways and means a quarterly report
detailing the amounts of the agreements, the ongoing and new projects undertaken by the
university, the amounts spent on personnel and the amount of federal reimbursement and
recoupment payments that the university collected.

SECTION 39. Notwithstanding paragraph (a) of subsection (xxiii) of section 9 of chapter
211B of the General Laws, or any other general or special law to the contrary, the chief
justice for administration and management may, from the effective date of this act
through April 30, 2008, transfer funds from any item of appropriation within 1 of the 7
departments of the trial court to any other item of appropriation of the 7 departments.
These transfers shall be made in accordance with schedules submitted to the house and
senate committees on ways and means. The schedule shall include the following: (1) the
amount of money transferred from 1 item of appropriation to another; (2) the reason for
the necessity of the transfer; and (3) the date on which the transfer is to be completed. No
transfer under this section shall occur until 10 days after the revised funding schedules
have been submitted in written form to the house and senate committees on ways and
means.

SECTION 40. Notwithstanding any general or special law to the contrary, in hospital
fiscal year 2008, the office of the inspector general may continue to expend funds
appropriated pursuant to section 1 of chapter 240 of the acts of 2004 for the costs
associated with maintaining a pool audit unit within said office. The unit shall continue to
oversee and examine the practices in all Massachusetts’ hospitals including, but not
limited to, the care of the uninsured and the resulting free care charges. The inspector
general shall submit a report to the house and senate committees on ways and means on
the results of the audits and any other completed analyses not later than March 1,
2008. For the purposes of said audits, allowable free care services shall be defined
pursuant to chapter 118G of the General Laws and any regulations promulgated pursuant
thereto.

SECTION 41. Notwithstanding any general or special law to the contrary, the executive
office of transportation shall withhold and not expend 50 per cent of the amount
appropriated to regional transit authorities pursuant to section 2 of this act until the
secretary has certified that the authorities have satisfied all the reporting requirements of
said section 2 and of chapter 161B of the General Laws; provided further, that the
secretary shall hold said 50 per cent of the amount appropriated to regional transit
authorities pursuant to said section 2 in a reserve account and shall only authorize the
expenditure of said 50 per cent of the amount appropriated to regional transit authorities
pursuant to said section 2 upon certification by the secretary that the authorities have
satisfied all the reporting requirements of said section 2 and of chapter 161B of the
General Laws.

SECTION 42. Notwithstanding any general or special law to the contrary, the secretary
of the executive office of administration and finance shall investigate ways to reduce
administrative costs related to providing notice via first class mail to any person entitled
to receive such notice pursuant to any general or special law. In conducting said
investigation, the secretary shall consider the potential financial benefit to the
commonwealth of allowing electronic notification in lieu of requiring notice only via first
class mail and shall also consider alternative ways of notifying persons entitled to receive
such notice pursuant to any general or special law who lack access to electronic
communications equipment. The secretary shall report his findings and
recommendations, including any proposed legislation, to the clerk of the senate, the clerk
of the house of representatives and to the chairs of the house and senate committees on
ways and means no later than December 31, 2007.

SECTION 43. Notwithstanding any general or special law to the contrary, there shall be a
special commission to investigate and study the commonwealth's liability for paying
retiree health care and other non-pension benefits. The commission shall specifically
examine further legislation necessary to comply with statement number 43 and statement
number 45 of the Government Accounting Standards Board, so-called, a possible
amortization schedule to fund the commonwealth's liability, and the possibility of state
borrowing against future tobacco litigation proceeds to fund the commonwealth's liability
for said retiree health care and other non-pension benefits. The commission shall consist
of the chairs of the joint committee on public service, who shall co-chair the commission,
the chairs of the house and senate committees on ways and means, the secretary of
administration and finance, or his designee, the state treasurer, or his designee, the state
comptroller, or his designee, the executive director of the pension reserves investment
management board, or his designee, and the executive director of the group insurance
commission, or his designee. The commission shall report its findings and
recommendations, including any proposed legislation, to the clerk of the senate, to the
clerk of the house of representatives and to the chairs of the house and senate committees
on ways and means not later than December 31, 2007.

SECTION 44. Sections 4 and 18 of this act shall take effect June 30, 2007.

SECTION 45. Section 12 of this act shall take effect October 1, 2007.

SECTION 46. Except as otherwise provided, this act shall take effect on July 1, 2007.