Business & Tech

Senate leaders honing bill to rein in state’s health care costs

Said state Senator Karen E. Spilka (above): “We’re looking at everything, with the intent of driving costs down but not sacrificing our commitment to universal coverage.”
Suzanne Kreiter/Globe Staff
Said state Senator Karen E. Spilka (above): “We’re looking at everything, with the intent of driving costs down but not sacrificing our commitment to universal coverage.”

Massachusetts Senate leaders say they are developing an extensive bill aimed at curbing health care costs in the state budget and for consumers, in what could shape up to be the biggest state health care legislation in five years.

Senators expect to finish drafting the bill in coming weeks and file it in October, after several months of research, including meetings with health officials in other states.

In interviews this week, they offered few details about the legislation. But the lawmakers indicated it would cover a broad range of policies aimed at slashing medical spending and providing more coordinated care to patients in need.

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Senators are targeting a long list of complex issues, including prescription drug costs, unnecessary hospital admissions, support services for the chronically ill, and access to mental health services and dental care.

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“We’re looking at everything, with the intent of driving costs down but not sacrificing our commitment to universal coverage,” said Senator Karen E. Spilka, the Senate budget chief, who is among a half-dozen senators developing the bill.

“I think it will be a very significant piece of legislation,” said Spilka, an Ashland Democrat.

Senators are pushing ahead with their bill even as uncertainty lingers about health care nationally. President Trump and the Republican-led Congress have been trying to scrap the Affordable Care Act. A repeal would have big implications for how states cover and pay for health care for low-income residents, and the move is widely opposed in Massachusetts.

With repeal efforts stalled, some members of Congress are working on legislation to stabilize health care markets.

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“We can’t wait for Washington,” state Senate President Stanley C. Rosenberg said.

Senators didn’t say whether their bill will include proposals from Governor Charlie Baker to curb costs in the state Medicaid program, called MassHealth. In late June, Baker proposed slashing expenses, in part, by changing eligibility rules and moving 140,000 people from MassHealth to subsidized commercial health plans.

The House and Senate so far have declined to approve Baker’s ideas, but they agreed to increase fees on employers to help fund the rising costs of MassHealth.

Rosenberg said Baker’s proposals are “all still on the table” but that any eligibility changes must be done very carefully.

MassHealth covers 1.9 million low-income families and individuals. Its costs, which are shared with the federal government, represent about 40 percent of the state budget.

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Senators said they also want to address spending in the commercial health care market, which includes the majority of Massachusetts residents.

Health costs in the state are generally considered among the highest in the country. In 2012, the Legislature and then-governor Deval Patrick approved a bill to tackle those costs. The law, known as Chapter 224, created two state agencies, the Health Policy Commission and the Center for Health Information and Analysis, to collect data and monitor health spending.

It also set a target of limiting growth in overall health care spending to 3.6 percent a year. The state exceeded that benchmark in 2015 and 2014.

“Health care is such a big part of our economy and such a big part of the state budget. We have to continually look for ways to improve the system and try and save money,” said Senator James T. Welch, cochairman of the Joint Committee on Health Care Financing.

Welch, a West Springfield Democrat, and his colleagues held meetings with local health care executives and experts last month. They have talked to experts from other states, including Minnesota and Maryland, and have planned meetings in Vermont, in an effort funded by the Milbank Memorial Fund, a private foundation that focuses on health care.

Health care executives in Massachusetts, already under pressure to control costs, are hoping legislators don’t try to implement a slate of onerous new rules.

The Baker administration is already in the midst of restructuring the way it pays for and delivers care under MassHealth, noted Lora M. Pellegrini, president of the Massachusetts Association of Health Plans. “The system’s going through a ton of change right now. I don’t think we need to be adding a lot of new regulations.”

Lynn Nicholas, president of the Massachusetts Health & Hospital Association, said legislation should give health care providers flexibility to deliver care more efficiently — not just target costs.

“This should be a bill about improving the quality of care and access to care in the right setting,” Nicholas said. “If that is done, then cost containment will follow.”

A trade group for biotech companies cautioned against “gimmicky ideas,” such as requiring companies to publicly break down the costs of their drugs.

“We are continuing to talk with senators about the value that innovative medicines bring to the health care system, especially in costs avoided,” Robert K. Coughlin, president of the Massachusetts Biotechnology Council, said in a statement.

Business groups, meanwhile, want the bill to focus on MassHealth’s growing costs. Employers say it’s unfair for them to pay more for MassHealth unless the state curbs the program’s spending.

Any Senate legislation would need approval from the House and governor to become law.

A spokesman for Speaker Robert A. DeLeo said House members are “considering a number of different ideas regarding health care cost containment.”

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey @globe.com. Follow her on Twitter @priyanka_dayal.