By: Christopher Parrella, Esq., CPC, CHC, CPCO
Parrella Health Law, Boston, Ma.
A Health Care Provider Defense and Compliance Firm

Massachusetts has once again positioned itself at the forefront of health care reform with the enactment of two landmark bills aimed at increasing oversight, enhancing transparency, and controlling rising health care and pharmaceutical costs. Governor Maura Healey’s signing of House Bill 5159 introduces some of the most significant health care regulations the state has seen since 2012.

These reforms fundamentally reshape health care market oversight, introduce stricter reporting and compliance requirements, and impose new financial obligations on a broader range of stakeholders, including pharmaceutical manufacturers, private investors, and pharmacy benefit managers (PBMs). If you are a provider, investor, or entity operating within the Massachusetts health care landscape, these changes demand your immediate attention.

Key Takeaways from the New Massachusetts Health Care Laws

1. Expanded Oversight of the Health Care Market

   • The Health Policy Commission (HPC) now has greater authority to review significant provider transactions, including equity investments, real estate sales, and nonprofit-to-for-profit conversions.
   • Health care real estate investment trusts (REITs) and management service organizations (MSOs) will now be required to register and report financial and operational details.
   • A new Office for Health Resource Planning will assess supply and demand across health care services and make recommendations to address statewide needs.

2. New Scrutiny on Pharmaceutical Costs

   • A newly established HPC Office for Pharmaceutical Policy and Analysis will examine trends in drug pricing, access, and affordability.
   • Pharmaceutical companies and PBMs will now be required to testify at the annual Health Care Cost Trends Hearing, making their pricing practices more transparent.
   • Massachusetts will begin capping out-of-pocket drug costs for essential medications, including those for diabetes, asthma, and heart conditions.

3. Tighter Compliance and Penalties

   • Increased penalties for non-compliance: Fines for failing to meet data reporting requirements have been raised to $25,000 per week, with no cap.
   • The Determination of Need (DoN) Process will now integrate HPC’s cost and market impact assessments, ensuring regulatory scrutiny before significant expansions or transactions.
   • More entities, including clinical labs, imaging facilities, and urgent care centers, will now be subject to the annual funding assessment.

4. Greater Focus on Primary Care and Health Equity

   • The Payment Reform Trust Fund will now prioritize investments that advance health equity.
   • A new 25-member task force will study primary care access and delivery, co-chaired by the HPC Executive Director and the Secretary of Health and Human Services.

What This Means for Health Care Stakeholders

For Providers & Health Systems

• Increased regulatory review of expansions, acquisitions, and equity transactions.
• Greater transparency requirements, particularly around pricing and investment relationships.
• Potential new costs associated with compliance and financial assessments.

For Pharmaceutical & PBM Companies

• Heightened scrutiny over drug pricing and reimbursement practices.
• Mandatory participation in state cost transparency hearings.
• Inclusion in new funding assessments that previously targeted providers.

For Investors & Private Equity Firms

• Expanded liability and disclosure requirements related to health care investments.
• Greater state oversight of financial transactions, including real estate and MSO arrangements.
• Increased risk exposure in cases of non-compliance by portfolio companies.

Why This Matters

With these new laws, Massachusetts is taking a proactive stance on cost containment, market oversight, and patient protections. Whether you are a provider, an investor, or a pharmaceutical company, these changes require immediate attention to ensure compliance and mitigate potential financial or regulatory risks.

What Should You Do Next?

At Parrella Health Law, we specialize in helping health care organizations, investors, and industry stakeholders navigate complex regulatory changes. Our team is ready to assist you in:

• Assessing compliance obligations under the new laws
• Developing internal policies to meet reporting and transparency requirements
• Evaluating investment strategies in light of heightened regulatory scrutiny
• Preparing for HPC market oversight and cost impact reviews

Contact Parrella Health Law today at 857.328.0382 or reach out to Christopher A. Parrella directly at cparrella@parrellahealthlaw.com to ensure your organization stays ahead of these sweeping changes.