Mass. General Brigham gets more time to file spending plan

The corporate offices of Massachusetts General Brigham hospitals in Assembly Square in Somerville.Lane Turner/Globe Staff

The state’s largest health system, under pressure from health care watchdogs to put its spending in check, will have a bit more time to create a plan.

The Health Policy Commission on Wednesday gave Mass. General Brigham until May 16 to file what is known as a “performance improvement plan,” which will outline a target for the system to keep health care spending in check.

“The conversations have been very constructive and there is a mutual interest in a ... proposal that will successfully address the underlying causes of MGB’s cost growth and result in meaningful savings to the Commonwealth,” said David Seltz, executive director of the Massachusetts Health Policy Commission, at an HPC hearing Wednesday.

The commission initially put Mass. General Brigham on an improvement plan in January, after the commission said the health system’s spending exceeded acceptable levels. The system had 45 days to respond to the request, and it ultimately filed a 60-day extension request in March, saying it would need until May 16 to develop a performance improvement plan.

Commissioners said that the request wasn’t just a delay, but represented a real effort by Mass. General Brigham to bring spending in line with the state’s benchmark.

“I’m optimistic that they will come up with a plan that gets our overall spending growth down closer to the benchmark which is so important to maintain the financial viability of our health care system,” said Stuart Altman, chair of the Health Policy Commission.

In a statement, Mass. General Brigham said it was pleased by the extension.

“We are committed to making health care more affordable for our patients and are working collaboratively with the HPC to develop and implement a [performance improvement plan] that achieves this goal.”

Mass. General Brigham is the first health system to be put under a performance improvement plan by the commission in the six years the agency has been monitoring payer and provider spending.

The state has tried for several years to keep the annual growth rate of total health care spending below 3.1 percent. In 2020, health care spending totaled $62.6 billion.

In January, commission staff said that Mass. General Brigham exceeded that growth rate by a wider margin than any other provider, with spending growth totaling $293 million above benchmark limits from 2014 to 2019. The output was more than double that of the second-highest health system in Massachusetts, according to commission data. The figures are not adjusted for patient illness.

This spending represents total spending for patients with a primary care provider at Mass. General Brigham.

Commission staff said in a January presentation that Mass. General Brigham had pledged to continue steps it had already taken to curtail spending, such as shifting care to lower-cost settings, but that it had not provided evidence that this effort would be effective. As a result, commissioners put Mass. General Brigham on a performance improvement plan.

In the March extension request letter filed with the commission, Christopher Philbin, vice president of government affairs at Mass. General Brigham, said the system needed to hear from the state’s Public Health Commission on its outpatient expansion proposals before it could respond to the state, saying the proposal was “fundamental” to its overall strategy for reducing costs.

Mass. General Brigham ultimately withdrew its outpatient expansion proposal earlier this month, citing a lack of support from Department of Public Health staff, which reviews the plans and submits a recommendation to the Public Health Council.

Mass. General Brigham did not address how it planned to move forward with its improvement plan in the absence of the outpatient expansion.

The performance improvement plan will ultimately have to be approved by the Health Policy Commission, kickstarting up to 18 months of monitoring. The commission can levy a $500,000 fine as a last resort if Mass. General Brigham doesn’t file or implement an improvement plan in good faith.