PETITION OF:

SECTION 1. Chapter 111 of the General Laws is hereby amended by inserting after section 4L the following sections:–

Section 4M. The department shall, subject to appropriation, establish a chronic disease self-management program. The program shall support coordinated strategies to provide patients and their families with education and support to increase skills and confidence and empower patients to manage chronic conditions as active partners in their own care.

The department shall provide pilot demonstration project grants to non-profit community organizations to implement a variety of chronic disease self-management approaches. Grants shall focus on providing assistance in diverse settings that focus on underserved populations and racial and ethnic minority populations.

No more than two years following the start of the initial pilot demonstration projects, the department shall evaluate the pilot demonstration projects. Based on the evaluations, the department shall develop a comprehensive statewide plan to implement chronic disease self management programs throughout the commonwealth. The plan shall be filed with the committees on public health, health care financing and ways and means.

Section 4N. (a) The department shall develop, implement, and promote an evidence-based outreach and education program designed to provide information and education on the therapeutic and cost-effective utilization of prescription drugs to physicians, pharmacists, and other health care professionals authorized to prescribe and dispense prescription drugs. In developing the academic detailing program the department shall consult with physicians, pharmacists, private insurers, hospitals, pharmacy benefit managers, the Masshealth drug utilization review board, and the University of Massachusetts Medical School. The program shall include the following elements:

(1) The opportunity for physicians, pharmacists and nurses under contract with the program to conduct face-to-face visits with prescribers, utilizing evidence-based materials and borrowing methods from behavioral science, educational theory and where appropriate, pharmaceutical industry data and outreach techniques. To the extent possible, the program shall inform prescribers about drug marketing that is intended to circumvent competition from generic or other therapeutically equivalent pharmaceutical alternatives or other evidence-based treatment options.

(2) Outreach to physicians and other health care practitioners who participate in MassHealth, the Prescription Advantage program, the Commonwealth Care Health Insurance Program, and other publicly funded, contracted or subsidized health care programs in the commonwealth, to academic medical centers, and to other prescribers

(b) The program shall be made available to private payors on a subscription basis.

(c) While recognizing the particular geographic and demographic characteristics of the commonwealth, the program shall be modeled where practicable on the Pennsylvania PACE/Harvard University Independent Drug Information Service. The department shall, to the extent possible, also utilize or incorporate into its program other independent educational resources or models proven effective in promoting high quality, evidenced-based, cost-effective information regarding the effectiveness and safety of prescription drugs, including but not limited to (1) the Academic Detailing Program of the University of Vermont College of Medicine Area Health Education Centers, (2) the Oregon Health and Science University Evidence-based Practice Center’s Drug Effectiveness Review project, and (3) the North Carolina evidence-based peer to peer education program outreach program.

(d) The department shall promulgate regulations as necessary to implement this Section in accordance with chapter 30A no later than January 1, 2008, and shall begin implementing the program no later than July 1, 2008.

(e) The department is authorized to establish and collect fees for subscriptions and contracts with private payors and to seek funding from nongovernmental health access foundations and undesignated drug litigation settlement funds associated with pharmaceutical marketing and pricing practices.

SECTION 2. Chapter 111 of the General Laws is hereby further amended by inserting after section 51G the following section:–

Section 51H. The department shall establish emergency room patient flow management standards for acute care hospitals. The standards shall require each acute care hospital with an emergency department to evaluate its elective surgical procedure scheduling policy to determine if scheduling changes would reduce overcrowding in the hospital’s emergency department. The department shall by regulation define the minimum requirements of the evaluation required by this section.

The department shall require a hospital to change its elective surgical procedure scheduling policy if the evaluation demonstrates that the change would significantly reduce emergency department overcrowding or reduce waiting time for emergency services. The department may deny the renewal of a hospital license pursuant to section 51 for violation of a requirement of this section.

The department shall annually report on the effectiveness of this section on reducing emergency room overcrowding, improving health quality, and saving costs.

SECTION 3. Chapter 111 of the General Laws is hereby further amended by inserting after section 70G the following section:–

Section 70H. (a) As used in this section, unless the context otherwise indicates, the following terms shall have the following meanings:-

“Carrier”, an insurer licensed or otherwise authorized to transact accident and health insurance under chapter 175; a nonprofit hospital service corporation organized under chapter 176A; a non-profit medical service corporation organized under chapter 176B; a health maintenance organization organized under chapter 176G, or an organization entering into a preferred provider arrangement under chapter 176I.

“Administrator”, any person who receives or collects charges, contributions or premiums for, or adjusts or settles claims in connection with any type of health benefit provided under the plan as an alternative to insurance.

“Commercial purpose”, advertising, marketing, promotion, or any similar activity that is used or intended to be used to influence sales or the market share of a pharmaceutical drug, to influence or elevate the prescribing behavior of a prescriber, market prescription drugs to individuals or to elevate the effectiveness of a professional pharmaceutical detailing sales force.

“De-identified”, information that cannot be used to directly or indirectly identify the patient or the prescriber. Information that may identify the patient or prescriber includes a person’s name, address, telephone number, facsimile number, electronic mail address, photograph or likeness, account, credit card, medical record, social security number, or any other unique number, characteristic, code or information which is likely to lead to the identification of the patient or prescriber.

“Electronic transmission intermediary”, an entity that provides the infrastructure that connects the computer systems or other electronic devices used by health care practitioners, prescribers, pharmacies, health care facilities and pharmacy benefit managers, carriers, administrators and agents and contractors of those persons and entities in order to facilitate the secure transmission of an individual's prescription drug order, refill, authorization request, claim, payment or other prescription drug information.

“Health care facility”, a licensed facility, institution or entity licensed that offers health care to persons in the commonwealth, including a health care provider, home health care provider, hospice program and a pharmacy.

“Health care practitioner”, a person licensed to provide or otherwise lawfully providing health care or a partnership or corporation made up of those persons or an officer, employee, agent or contractor of that person acting in the course and scope of employment, agency or contract related to or supportive of the provision of health care to individuals.

“Health plan”, a health plan providing prescription drug coverage as authorized under the federal Medicare Prescription Drug, Improvement and Modernization Act of 2003, Public Law 108-173.

“Individual”, a natural person who is the subject of prescription drug information.

“Pharmacy”, any retail drug business registered by the board of registration in pharmacy in accordance with section 39 of chapter 112 that is authorized to dispense controlled substances, including a retail drug businesses as defined in section 1 of chapter 94C and a mail order pharmacy.

“Pharmacy benefits manager”, an entity that performs pharmacy benefits management. “Pharmacy benefits manager” includes a person or entity acting for a pharmacy benefits manager in a contractual or employment relationship in the performance of pharmacy benefits management for a covered entity and includes mail service pharmacy.

“Prescriber”, a person who is licensed, registered or otherwise authorized to prescribe and administer drugs in the course of professional practice.

“Prescription drug information”, information concerning prescription drugs which under federal law, is required, prior to being dispensed or delivered, to be labeled “Caution: Federal law prohibits dispensing without prescription” or is required by an applicable federal or state law or rule to be dispensed on prescription only or is restricted to use by practitioners only, and includes lawful written or oral order of a practitioner for a drug or device, issued on a prescription form or by electronic transmission.

“Prescription drug information intermediary”, a person or entity that communicates, facilitates or participates in the exchange of prescription drug information regarding an individual or a prescriber. “Prescription drug information intermediary” includes, but shall not be limited to, a pharmacy benefits manager, a health plan, an administrator and an electronic transmission intermediary.

“Regulated transaction”, a prescription for a drug that is written by a prescriber within the commonwealth or that is dispensed within the commonwealth.

(b) With regard to a regulated transaction, a prescriber, carrier, pharmacy, or prescription drug information intermediary may not license, use, sell, transfer or exchange for value, for any commercial purpose, prescription drug information that identifies directly or indirectly the individual or the prescriber except if expressly permitted as a regulated transaction that is allowed under subsection (c).

(1) transfers of prescription drug information, including identification of the individual and prescriber, as required under the chapter 94C;

(2) the dispensing of prescription drugs to an individual or the individual’s authorized representative, the transmission of prescription drug information between a prescriber and a pharmacy or other health care practitioner caring for the individual and the transfer of prescription information between pharmacies;

(3) the transfer of prescription records that may occur when a pharmacy’s ownership is changed or transferred;

(4) care management educational communications provided to an individual about the individual’s health condition, adherence to a prescribed course of therapy or other information relating to the drug being dispensed, treatment options or clinical trials;

(5) transfers for the limited purpose of pharmacy reimbursement, prescription drug formulary or prior authorization compliance, patient care management, utilization review, health care research or as required by law; and

(6) the collection, use, transfer or sale of prescription drug information that is de-identified and that does not directly or indirectly identify the individual or prescriber.

(d) A violation of this section shall be an unfair or deceptive act or practice in the conduct of trade in violation of section 2 of chapter 93A. Any person whose rights under this section have been violated or attempted to be violated may institute and prosecute in his own name and on his own behalf, or the attorney general, acting on behalf of the commonwealth, may institute a civil action for injunctive and other equitable relief.

SECTION 4. The General Laws are hereby amended by inserting after section 111K the following chapter:–

CHAPTER 111L

PRESCRIPTION DRUG MARKETING RESTRICTIONS AND DISCLOSURE

Section 1. As used in this chapter, unless the context otherwise indicates, the following terms shall have the following meanings:-

“Bona fide clinical trial”, any research project that prospectively assigns human subjects to intervention and comparison groups to study the cause and effect relationship between a medical intervention and a health outcome.

“Health care practitioner” or “practitioner”, a person who prescribes prescription drugs for any person and licensed to provide or is otherwise lawfully providing health care or a partnership or corporation made up of those persons or an officer, employee, agent or contractor of that person acting in the course and scope of employment, agency or contract related to or supportive of the provision of health care to individuals.

“Gift”, a payment, food, entertainment, travel, honorarium, subscription, advance, services or anything of value, unless consideration of equal or greater value is received. A gift includes anything of value provided to a health care practitioner for less than market value. “Gift" shall not include anything of value received by inheritance, a gift received from a member of the health care practitioner’s immediate family or from a relative within the third degree of consanguinity of the health care practitioner or of the practitioner’s spouse or from the spouse of any such relative, or prescription drugs provided to a health care practitioner solely and exclusively for use by the practitioner’s patients.

“Immediate family", a spouse and any dependent children residing in the reporting person's household.

“Labeler”, a person or entity that (a) receives prescription drugs or biological products from a manufacturer or wholesaler; (b) repackages the drugs or biological products for later resale; and (c) has a labeler code from the federal Food and Drug Administration under section 207.20 of Title 21 of the Code of Federal Regulations.

“Marketing”, advertising and promotional activities, including, but not limited to, the activities described in section 2.

“Medical device”, an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory, which is:

(1) recognized in the official National Formulary, or the United States Pharmacopeia, or any supplement to them;
(2) intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals; or
(3) intended to affect the structure or any function of the body of man or other animals, and which does not achieve its primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of its primary intended purposes.

“Person", a business, individual, corporation, union, association, firm, partnership, committee, or other organization or group of persons.

“Pharmaceutical marketer”, a person who, while employed by or under contract to represent a pharmaceutical manufacturing company, engages in pharmaceutical detailing, promotional activities, or other marketing of prescription drugs in this state to any physician, hospital, nursing home, pharmacist, health benefit plan administrator, or any other person authorized to prescribe, dispense, or purchase prescription drugs. The term does not include a wholesale drug distributor licensed under section 36A of chapter 112, a representative of such a distributor who promotes or otherwise markets the services of the wholesale drug distributor in connection with a prescription drug, or a retail pharmacist registered under section 37 of chapter 112 if such person is not engaging in such practices under contract with a manufacturing company.

“Pharmaceutical manufacturing company”, any entity which is engaged in the production, preparation, propagation, compounding, conversion, or processing of prescription drugs, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis, or any entity engaged in the packaging, repackaging, labeling, relabeling, or distribution of prescription drugs. The term does not include a wholesale drug distributor licensed under section 36A of chapter 112 or a retail pharmacist registered under section 37 of chapter 112 or a medical device manufacturer that distributes drugs as an incidental part of its device business.

“Pharmaceutical manufacturer agent”, a pharmaceutical marketer or any other person who for compensation or reward does any act to promote, oppose or influence the prescribing of a particular prescription drug or medical device or category of prescription drugs or medical devices. The term shall not include a licensed pharmacist, licensed physician or any other licensed health care professional with authority to prescribe prescription drugs who is acting within the ordinary scope of the practice for which he is licensed.

“Prescription drugs”, any and all drugs upon which the manufacturer or distributor has placed or must, in compliance with federal law and regulations, place the following or a comparable warning: “Caution federal law prohibits dispensing without prescription.”

“Significant educational, scientific or policy-making conference or seminar”, an educational, scientific or policy-making conference or seminar that offers continuing medical education credit, features multiple presenters on scientific research, or is authorized by the sponsoring association to recommend or make policy.

Section 2. No pharmaceutical manufacturer agent shall knowingly and willfully offer or give to a health care practitioner or a member of a health care practitioner’s immediate family or a health care facility or employee or agent of a health care facility a gift of any value. No health care practitioner or a member of a health care practitioner’s immediate family or health care facility or employee or agent of a health care facility shall knowingly and willfully solicit or accept from any pharmaceutical manufacturer, a gift of any value. The restrictions in this paragraph do not include the following items which would otherwise be considered “gifts”:

(1) payment to the sponsor of a significant educational, scientific or policy-making conference or seminar medical conference, provided the payment is not made directly to a health care practitioner and is used solely for bona fide educational purposes and that the amount and use of the funds is posted on a publicly available internet site;

(2) reasonable honoraria and payment of the reasonable expenses of a health care practitioner who serves on the faculty at a bona fide significant educational, scientific or policy-making conference or seminar medical conference, provided that honoraria for speaking take place with an explicit contract with specific deliverables which are restricted to scientific issues, not marketing efforts;

(3) compensation for the substantial professional or consulting services of a practitioner in connection with a bona fide clinical trial, provided that the consulting is done under an explicit contract with specific deliverables which are restricted to scientific issues, not marketing efforts;

(4) publications and educational materials.

Section 3. (a) A manufacturer or labeler of prescription drugs dispensed in the commonwealth that employs, directs or utilizes marketing representatives in the commonwealth shall report marketing costs for prescription drugs in the commonwealth as provided in this section.

(b) By July 1st each year a manufacturer or labeler of prescription drugs that directly or indirectly distributes prescription drugs for dispensation to residents of the commonwealth shall file a report with the department of public health, in the form and manner provided by the department. The report must be accompanied by payment of a fee, as set by the department.

(c) The annual report filed under subsection (b) must include the following information as it pertains to marketing activities conducted within the commonwealth in a form that provides the value, nature, purpose and recipient of the expense:

(1) All expenses associated with advertising, marketing and direct promotion of prescription drugs through radio, television, magazines, newspapers, direct mail and telephone communications as they pertain to residents of the commonwealth, including a reasonable estimate of the value of expenses associated with advertising purchased for a regional or national market that includes advertising within the commonwealth. The expenses shall include, but not be limited to, direct and indirect payments in support of independent or continuing medical education programs, including payments to medical education companies; design, printing and production costs of patient education materials and disease management materials distributed within the commonwealth; consulting fees and expenses, participation in speakers’ bureaus and honoraria or other payments for time while speaking at or attending meetings, lectures or conferences; writing articles or publications; charitable grants, either directly or earmarked, even if unrestricted; market research surveys or other activities undertaken in support of developing advertising and/or marketing strategies.

(2) With regard to all persons and entities licensed to provide health care, including health care practitioners and persons employed by them, carriers licensed under chapters 175, 176A, 176B, 176G, and 176I, health plans and benefits managers, pharmacies, hospitals, nursing facilities, clinics and other entities licensed to provide health care under this chapter, the following information:

(i) All expenses associated with educational or informational programs, materials and seminars and remuneration for promoting or participating in educational or informational sessions, regardless of whether the manufacturer or labeler provides the educational or informational sessions or materials;

(ii) All expenses for gifts not otherwise prohibited in section 2, and anything provided to a health care professional for less than market value. The report must identify recipients by their state board numbers or DEA numbers.

(iii) All expenses associated with product samples; and

(iv) The aggregate cost of all employees or contractors of the manufacturer or labeler who directly or indirectly engage in the advertising or promotional activities listed in paragraphs (1) and (2) including all forms of payment to those employees. The cost reported under this paragraph must reflect only that portion of payment to employees or contractors that pertains to activities within the commonwealth or to recipients of the advertising or promotional activities who are residents of or are employed in the commonwealth.

(d) The following marketing expenses are not subject to the requirements of this section:

(1) expenses of $25 or less;

(2) reasonable compensation and reimbursement for expenses in connection with a bona fide clinical trial of a vaccine, therapy or treatment; and

(3) scholarships and reimbursement of expenses for attending a significant bona fide educational, scientific or policy-making conference or seminar of a national, regional or specialty medical or other professional association if the recipient of the scholarship is chosen by the association sponsoring the conference or seminar.

Section 4. By January 1, 2009 and every 2 years after that date, the department of public health shall file a report with the clerks of the senate and house of representatives and the attorney general, containing an analysis of the data submitted to the department, including the scope of prescription drug marketing activities and expenses and their effect on the cost, utilization and delivery of health care services and any recommendations with regard to marketing activities of prescription drug manufacturers and labelers.

Section 5. Information submitted to the department pursuant to this section is a public record except to the extent that it includes information that is protected by state or federal law as a trade secret. Data compiled by the department for the purposes of reporting required by this section is a public record, as long as it does not reveal information that is protected by state or federal law as a trade secret. Notwithstanding any other provision of law, the identity of health care practitioners and other recipients of gifts, payments and materials required to be reported in this chapter shall not constitute confidential information or trade secrets protected under this section.

Section 6. This section may be enforced in a civil action brought by the Attorney General. A person who violates this section shall be punished by a fine of not more than $5,000 or by imprisonment for not more than 2 years, or both.

SECTION 5. Chapter 118E of the General Laws is hereby amended by inserting after section 17 the following section:–

Section 17A. (a) As used in this section, unless the context otherwise indicates, the following term has the following meaning:

“Evidence-based”, based on criteria and guidelines that reflect high-quality, cost-effective care. The methodology used to determine such guidelines shall meet recognized standards for systematic evaluation of all available research and shall be free from conflicts of interest. Consideration of the best available scientific evidence shall not preclude consideration of experimental or investigational treatment or services under a clinical investigation approved by an institutional review board.

(b) The executive office of health and human services shall coordinate an evidence-based pharmaceutical purchasing and prescribing program for state agencies administering state purchased health care programs and entities participating in state subsidized health care programs. The program shall ensure, to the extent practicable, the adoption of uniform policies for prudent, cost-effective pharmaceuticals purchasing; maximize efficiencies in administration; improvements in the quality of care; and reduction in administrative burdens on health care providers participating in state purchased health care programs. The policies adopted should be based, to the extent possible, upon the best available scientific and medical evidence.

(c) The executive office shall, by October 1, 2007, convene a pharmaceutical quality and cost management task force, hereinafter referred to as the task force. The task force shall coordinate and exchange information among state agencies, stakeholder groups, advisory committees, and provide advice to the executive office and agencies thereof. The executive office and the office of medicaid shall consult with the task force on at least a quarterly basis on significant policy decisions related to implementation of the purchasing and prescribing programs established in this section. The executive office shall provide necessary staffing services to the task force, which shall consist of the following members appointed by the secretary:

(1) the secretary of health and human services, who shall serve as chair;

(2) the Medicaid director or a designee;

(3) the commissioner of public health or a designee;

(4) the commissioner of mental health or a designee;

(5) the commissioner of mental retardation or a designee;

(6) the commissioner of corrections or a designee;

(7) a representative of private payors;

(8) a representative of the division of industrial accidents;

(9) a representive of the group insurance commission;

(10) a representative of the University of Massachusetts Medical School;

(11) a member representing public education;

(12) a member representing municipalities or local governments;

(13) a clinical pharmacist;

(14) two licensed prescribers;

(15) a representative of the Masshealth drug utilization review board;

(16) a representative of the Commonwealth Medicine division of the University of Massachusetts Medical School;

(17) a representative of an organization representing racial and ethnic minorities;

(18) a representatives of a health care consumer quality advocacy group; and

(19) a representatives of a health care consumer legal advocacy group.

(d) In consultation with the task force, the secretary shall develop and implement an evidenced-based preferred drug list, hereinafter referred to as PDL, to be used in the administration of prescription drug benefits by MassHealth. Decisions regarding drugs to be included in the PDL must be based on available, reliable evidence-based health information concerning pharmaceutical efficacy, adverse effects and appropriate clinical trials, as well as cost effectiveness. The PDL must also ensure that less expensive generic drugs, other therapeutically equivalent alternatives or other evidence-based treatment options will be substituted for brand name drugs where the quality of care is not diminished, and consider the approval of drugs with lower abuse potential in substitution for drugs with significant abuse potential.

(e) In order to implement the purposes of this section, the office of medicaid shall develop and implement a prior authorization program to be administered in coordination with the PDL. The program shall:

(1) identify clinically efficacious high-quality prescription drugs that are also cost-effective; these drugs may not require prior approval;

(2) be designed to ensure timely access to certain medically necessary medications prescribed to medically fragile beneficiaries, including persons with mental illnesses, while allowing for the exploration of appropriate options for reducing the costs of pharmaceutical benefits and programs;

(3) minimize administrative burdens on health care practitioners and patients and insure prompt turnaround on prior authorization decisions;

(4) incorporate effective outreach to medical providers, pharmacists and patients about how the program works;

(5) incorporate a transparent review process for the PDL and prior authorization criteria while avoiding pharmaceutical industry influence and conflicts of interest; and

(6) adopt rules allowing prescribers to be exempted from certain provisions of the prior authorization rules upon formal endorsement of the PDL and associated procedures developed as part of the program authorized by this section.

(f) To insure quality and efficiencies in the delivery of health care services, while maximizing the use of evidence-based criteria, the secretary shall to the extent practicable develop the PDL to harmonize with preferred drug lists and formularies in use throughout state agencies and in publicly funded, administered or subsidized health programs including without limitation, programs of the Commonwealth Health Insurance Connector Authority, the group insurance commission, the departments of mental health, mental retardation and corrections, and other agencies of the commonwealth.

(g) The executive office, in consultation with the task force, shall directly or by contract, develop a joint pharmaceuticals purchasing consortium. The consortium's purchasing activities shall be based upon the evidence-based prescription drug program and PDL established in this chapter.

(1) Participation in the purchasing consortium shall be offered as an option on a voluntary basis to the Commonwealth Care Health Insurance program and the departments of mental health, mental retardation and corrections, and other agencies of the commonwealth no later than January 1, 2008. By July 1, 2008, the secretary shall, in consultation with the task force, develop a plan and an implementation timetable to require, to the extent practicable and consistent with the purposes of this chapter, all state purchasers and publicly funded, administered or subsidized health programs to participate in the consortium by January 1, 2010. In developing the consortium and the underlying harmonized PDL, the department will seek to ensure, unless otherwise agreed to by participating entities, that:

(i) participating plans are not fundamentally altered and that the independent nature of any of the health plans involved in the consortium is not compromised;

(ii) rebates are negotiated on behalf of the entire consortium, and all participating plans share in the savings realized through the pooled purchasing effort.

(2) Participation in the consortium shall be purely voluntary for units of local government, private entities, labor organizations, and for individuals who lack or are underinsured for prescription drug coverage. The department may set reasonable fees, including enrollment fees, to cover administrative costs attributable to participation in the prescription drug consortium.

(3) If the department contracts on behalf of the consortium for services with a pharmacy benefits manager or administrator or other private entity for the negotiation of savings and rebates, it shall insure full transparency of all financial terms and contracts between the negotiating entity and the members of the consortium; pass through of all financial benefits including rebates and other discounts and payments without limitation; and a fiduciary relationship between the negotiating entity and the consortium.

(4) There is hereby established an account within the executive office of health human services known as the prescription drug consortium account. All receipts from activities related to administration of the drug purchasing consortium on behalf of participating individuals and organizations, other than state purchased health care programs, shall be deposited into the account. The receipts shall include, but not be limited to, rebates from manufacturers, and the fees established pursuant to clause (2). Funds in the account may be expended without further appropriation by the secretary for the purposes of this section.

(h) The executive office is authorized to participate in joint purchasing opportunities with other states that are consistent with the evidence-based policies and other criteria established herein. If the state participates in a multi-state purchasing pool that contracts with a private entity for the negotiation of savings and rebates, it shall insure full transparency of all financial terms and contracts between the negotiating entity and the members of the consortium; pass through of all financial benefits including rebates and other discounts and payments without limitation; and a fiduciary relationship between the negotiating entity and the consortium.

(i) The department may implement other strategies to control costs of drugs without reducing the quality of care consistent with the evidence-based approach in this chapter, including but not limited to authorizing reimbursement for drugs only in economical quantities and limiting the prices paid for drugs by such means as negotiated discounts from pharmaceutical manufacturers, central purchasing, volume contracting, or setting maximum prices to be paid.

(j) The department shall enter into a contractual agreement with the Oregon Health and Science University Drug Effectiveness Review Project to provide technical and clinical support in the development and the administration of the PDL and other evidence-based programs established in this section.

(k) On March 1, 2008 and every year thereafter, the department shall submit a report to the house and senate chairs of the joint committee on health care financing and the chairs of the senate and house committees on ways and means, on the progress in meeting the timetable and goals of this section, as well as savings achieved and any issues that need to be addressed.

Section 7. The department shall adopt regulations as necessary to implement this section.

SECTION 6. The General Laws are hereby amended by inserting after chapter 118H the following chapter:–

CHAPTER 118I

HEALTH CARE COST CONTROL

Section 1. As used in this chapter, the following words shall, unless the context clearly requires otherwise, have the following meanings:–

“Public payors”, agencies of the Commonwealth that purchase or contract for health care and health care insurance services, including, but not limited to, the Group Insurance Commission established by section 3 of chapter 32A, the Commonwealth Health Insurance Connector Authority, established by section 2 of chapter 176Q, and the Medicaid and MassHealth programs established by sections 9 and 9A of chapter 118E.

“Potentially preventable hospital readmission”, a patient’s readmission to a hospital within 30 days of a discharge from a hospital, due to a condition that indicates the readmission was potentially preventable during the initial hospital stay, as further defined by regulations.

“Potentially preventable hospital complication”, a potentially preventable harmful event or negative outcome that occurs to a patient while in a hospital that results from the process of care and treatment and not from any underlying disease, as further defined by regulations.

Section 2. The executive office of health and human services shall coordinate the creation of common, transparent quality and payment metrics among public payors to facilitate administrative savings and create standard, transparent methods for evaluating health care prices and quality. The common quality and payment metrics may include:

(1) a standard claims payment data set;

(2) standard units of payment, including cases, visits and payment methods; and

(3) a standard menu of performance measures, including severity and risk adjustments.

Upon adoption of the common quality and payment metrics by regulation, all public payors shall, to the extent possible, shall implement the common quality and payment metrics.

Section 3. The executive office of health and human services shall direct hospitals and insurers to provide data on potentially preventable hospital readmissions. The secretary shall initially consult with the health care quality and cost council established by section 16K of chapter 6A, and its advisory committee, regarding the data to be collected, and shall collect sufficient data to determine for each hospital a rate of potentially preventable hospital readmissions. The initial determinations for a hospital shall be provided to the hospital for review, but shall not be public information.

Following the review of its data by each hospital, the secretary shall promulgate regulations directing hospitals and insurers to provide data on potentially preventable hospital readmissions. No more than one year following the initial determination of hospital potentially preventable hospital readmission rates, the secretary shall post on the consumer health information internet site the potentially preventable hospital readmission data and rates for each hospital. The rates shall be adjusted annually, or as the secretary determines.

The secretary shall coordinate the creation of a common, transparent payment methodology among public payors to reduce potentially preventable hospital readmissions. The methodology shall reduce or eliminate payment for potentially preventable hospital readmissions. Upon adoption of the payment methodology by regulation, all public payors shall, to the extent possible, implement the common payment methodology.

Section 4. The executive office of health and human services shall direct hospitals and insurers to provide data on potentially preventable hospital complications. The secretary shall initially consult with the health care quality and cost council established by section 16K of chapter 6A, and its advisory committee, regarding the data to be collected, and shall collect sufficient data to determine for each hospital a rate of potentially preventable hospital complications. The initial determinations for a hospital shall be provided to the hospital for review, but shall not be public information.

Following the review of its data by each hospital, the secretary shall promulgate regulations directing hospitals and insurers to provide data on potentially preventable hospital complications. No more than one year following the initial determination of hospital potentially preventable hospital complication rates, the secretary shall post on the consumer health information internet site the potentially preventable hospital complication data and rates for each hospital. The rates shall be adjusted annually, or as the secretary determines.

The secretary shall coordinate the creation of a common, transparent payment methodology among public payors to reduce potentially preventable hospital complications. The methodology shall reduce or eliminate payment for potentially preventable hospital complications. Upon adoption of the payment methodology by regulation, all public payors shall, to the extent possible, implement the common payment methodology.

Section 5. The executive office of health and human services shall coordinate the creation of a common, transparent prospective payment methodology among public payors for outpatient procedures. The methodology shall provide a single prospective payment for all services provided in an outpatient visit in a hospital or ambulatory surgery facility, and may include a single prospective payment for a physician office visit. Upon adoption of the prospective payment methodology by regulation, all public payors shall, to the extent possible, implement the common prospective payment methodology.

Section 6. The executive office of health and human services shall coordinate the implementation of transparent evidence-based episodes of care payment rates among public payors for patients with chronic illnesses. Episodes of care payment rate methodologies shall encourage clinically integrated care based on evidence-based guidelines that reflect high-quality, cost-effective care. The methodology used to determine such guidelines shall meet recognized standards for systematic evaluation of all available research and shall be free from conflicts of interest. The methodology shall include a comprehensive evaluation process that assesses clinical quality and patient satisfaction. All details of the payment system and care evaluation shall be transparent to patients and providers. The rate methodologies shall provide an annual severity-adjusted payment to a care coordination entity that will provide all clinically appropriate care for the year. A portion of the payments shall be contingent upon meeting clinical quality goals and patient satisfaction standards. Upon adoption of the payment methodology by regulation of the council, all public payors shall, to the extent possible, implement the evidence-based episodes of care payment rates for patients with chronic conditions.

SECTION 7. Chapter 175 of the General Laws is hereby amended by inserting after section 47Z the following section:-

Section 47AA. (a) For purposes of this section, health insurance plan shall include a policy or policies of group life and accidental death and dismemberment insurance covering persons in the service of the commonwealth, and group general or blanket insurance providing hospital, surgical, medical, dental, and other health insurance benefits covering persons in the service of the commonwealth, and their dependents organized under chapter 32A, individual or group health insurance policies offered by an insurer licensed or otherwise authorized to transact accident or health insurance organized under chapter 175, a nonprofit hospital service corporation organized under chapter 176A, a nonprofit medical service corporation organized under chapter 176B, a health maintenance organization organized under chapter 176G, or an organization entering into a preferred provider arrangement under chapter 176I, any health plan issued, renewed, or delivered within or without the commonwealth to a natural person who is a resident of the commonwealth, including a certificate issued to an eligible natural person which evidences coverage under a policy or contract issued to a trust or association for said natural person and his dependent, including said person’s spouse organized under chapter 176M, and medical assistance and medical benefits under the Medicaid and MassHealth programs established by sections 9 and 9A of chapter 118E, and coverage provided by the Commonwealth Care Health Insurance Program under chapter 118H.

For purposes of this section, preventive care shall include any periodic, routine, screening or other services designed for the prevention and early detection of illness. This includes, but is not limited to, immunizations; periodic health exams for adults and children, as well as those mammograms, cytological exams and diagnostic tests associated with periodic health exams; prenatal maternity care; well child care, including vision and auditory screening; voluntary family planning; nutrition counseling; and health education. Preventive health care shall also include supplies, equipment, medication and specialist provided treatments and services for persons with chronic illnesses or disabling conditions.

For purposes of this section, copayments or coinsurance includes a fixed dollar or proportional amount that a person pays under a health insurance plan in connection with the provision of medical services, as further defined by regulations of the division.

(b) No health insurance plan shall charge copayments or coinsurance for preventive health care.

SECTION 8. Subsection (a) of section 3 of chapter 176J of the General Laws, as most recently amended by section 82 of chapter 58 of the acts of 2006, is hereby further amended by inserting after clause (6) the following clause:–

(7) Every carrier desiring to increase premiums or desiring to set the initial premium shall file a rate filing or application with the commissioner at least 90 days before the proposed effective date of such new rates. The commissioner may disapprove the proposed rates if the benefits provided are unreasonable in relation to the rate charged, or if they are excessive, inadequate or unfairly discriminatory or do not otherwise comply with the requirements of this chapter.

If a carrier files for an increase in premium of more than 7 percent than the premium previously charged, or if a carrier files an initial premium request that is more than 7 percent greater than the average premium for the similar policies offered by carriers in the same market, the carrier’s rate, in addition to being subject to all other provisions of this chapter and other provisions of law, shall be subject to prior approval of the commissioner. In granting such prior approval, the commissioner shall make a finding on the basis of information submitted by the carrier and investigated by the division and shall be subject to a public hearing pursuant to this clause. The hearing shall comply with the requirements of chapter 30A. The commissioner may consolidate hearings for more than one carrier. The carrier shall provide information on the reasons for the proposed increase in rates, and members of the public may testify. All testimony and evidence received shall be public records. The provisions of section 8A of chapter 175 authorized the commissioner by summons to require the attendance and testimony of witnesses under oath and the production of books, records and papers touching upon the matters in question at such hearing shall apply to hearings under this clause.

SECTION 9. The executive office of health and human services shall convene a long-term care payment coordination task force to develop a common comprehensive and transparent long-term care payment methodology that rewards efficient, clinically proper care in the most appropriate setting, without undue incentives to choose a particular setting, that provides high value and best meets patient and family needs. The task force shall consist of all agencies of the commonwealth concerned with long-term care policy, including the office of medicaid, the executive office of elder affairs, the division of health care finance and policy, and the department of public health. The task force shall consult with experts in the field of long-term care, long-term care providers, consumer health organizations, and organizations representing the elderly, the disabled and racial and ethnic minority groups. The task force shall invite participation by the Centers for Medicare and Medicaid Services.

The secretary shall file a report detailing the findings, recommendations and implementation plan of the task force, along with any legislation needed to implement its recommendations, with the committee on health care financing and the committees on ways and means no later than 6 months after the effective date of this act.

SECTION 10. The executive office of health and human services shall maximize enrollment of eligible persons in the MassHealth Senior Care Options program and shall develop a plan to offer similar coverage to Medicaid and Medicare-eligible disabled persons under age 65, hereinafter referred as dual eligible plans.

No later than 6 months after the effective date of this act, the executive office of health and human services shall prepare a report identifying clinical, administrative and financial barriers to expanded dual eligible plans, and recommended steps to remove the barriers and implement coverage for Medicaid and Medicare-eligible disabled persons under age 65. Before finalizing the report, the executive office shall hold a public consultative session that includes organizations representing seniors, organizations representing disabled persons, organizations representing health care consumers, organizations representing racial and ethnic minorities, health delivery systems, and health care providers. The report shall consider changes in procurement standards and MassHealth payment methodologies to promote enrollment in dual eligible plans. The report shall estimate the costs and benefits of implementing steps to remove barriers to expanded enrollment in dual eligible plans, including financial savings and improved quality of care.

The report shall be provided to the committee on health care financing, the house and senate committees on ways and means, and shall be posted on the internet site of the executive office of health and human services.

Subject to appropriation, the executive office of health and human services shall implement the steps recommended by the report. No later than one year following the filing of the report, the executive office shall issue a progress statement on expanded enrollment in dual eligible plans.

SECTION 11. The executive office of health and human services and the Commmonwealth Health Insurance Connector Authority shall prepare and implement a plan to make MassHealth and Commonwealth Care leaders in the use of advanced health information technology and electronic health records. The plan shall be developed in consultation with the Massachusetts e-Health Collaborative, the Massachusetts Health Data Consortium, MassPRO, consumer health organizations, consumer privacy organizations, providers and others concerned about health information technology and electronic health records.

The secretary shall file a report detailing the findings, recommendations and implementation plan, along with any legislation needed to implement its recommendations, with the committee on health care financing and the committees on ways and means no later than 6 months after the effective date of this act.

SECTION 12. There is hereby established a special commission to strengthen primary care. The commission shall consist of the secretary of health and human services, who shall serve as chair, 2 senators appointed by the president of the senate, 2 members of the house of representatives appointed by the speaker, the commissioner of public health, a representative of the Massachusetts Academy of Family Physicians, a representative of the Massachusetts Medical Society, a representative of the Massachusetts chapter of the American College of Physicians, a representative of the Massachusetts Nurses Association, a representative of the Massachusetts Association of Nurse Practitioners, a representative of the Massachusetts League of Community Health Centers, a representative of University of Massachusetts Medical School, a representative of the Massachusetts Public Health Association, a representative of the Massachusetts Association of Physician Assistants and a representative of Health Care For All.

The commission shall conduct a study and make recommendations for executive and legislative action to strengthen primary care in the commonwealth. The study shall review the availability of primary care services, identify regions of the state with impaired access to primary care, examine the impact of lack of access to primary care on the health status of the commonwealth, including racial, ethnic, gender, income and other disparities in health due to the lack of access to primary care, estimate the additional costs to the health care system due to the lack of availability of primary care, recommend methods to recruit and increase the availability of primary care practitioners, recommend changes in licensing, reimbursement rates and methodologies to strengthen primary care, and make such other findings and recommendations as the commission shall determine.

The commission shall hold at least three public hearings in different regions to receive testimony from the public on primary care concerns.

The commission shall report its findings to the clerks of the house and senate no later than December 31, 2007. The commission’s report shall be posted on the internet site of the executive office of health and human services.