Bill to lower health care costs calls for more scrutiny of drug makers

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Massachusetts Senate leaders unveiled sweeping health care legislation Tuesday that seeks to rein in prescription drug costs and hospital prices, an effort that proponents say would improve the state’s health care system and curb medical spending.

The bill would require drug companies for the first time to submit price and other data to the Health Policy Commission, a watchdog state agency, for scrutiny.

It addresses price disparities among hospitals — a perennially controversial issue — and sets a target for controlling the rate at which total hospital spending can rise. The legislation calls for slowing the rate of price growth at the state’s most expensive hospitals while allowing bigger price hikes at lower-paid hospitals.

Senators also want to set a target for reducing unnecessary hospital admissions. And their bill pushes insurance companies to offer new types of health plans that encourage patients to seek care from lower-cost, but high-quality, providers.

In addition, the Senate would establish a new type of dental care provider, called a dental therapist, and expand the scope of practice for nurse practitioners, optometrists, podiatrists, and other health care workers, a move that Governor Charlie Baker’s administration has supported.

Senate President Stanley Rosenberg said Tuesday that the wide-ranging bill aims to “guarantee access, maintain or improve quality, bring down cost, and maintain or improve outcomes.”

Lawmakers drafted the legislation after conducting more than a year of research that included studying policies adopted by several other states to curb health care spending. It is the most comprehensive health care bill to be considered by Massachusetts lawmakers in at least five years.

But the bill omits several significant changes proposed by Baker to control spending in the state Medicaid program, MassHealth. The governor proposed changing eligibility rules and move some adults off of MassHealth and onto other subsidized coverage, but lawmakers in both houses have so far rejected that idea.

Baker administration officials said Tuesday they were still reviewing the 100-page Senate bill.

“The administration . . . believes final legislation must include serious reforms that are needed to stabilize the health care safety net and protect taxpayers from picking up the tab for more worker’s health coverage,” Baker’s press secretary, Billy Pitman, said in a statement.

The Senate proposal also ran into resistance from leaders in the House, who said the lingering uncertainty around health care nationally makes this a bad time for a big new state health care bill.

Representative Jeffrey Sánchez, the House budget chief, said senators seem to be recycling several old ideas.

“It’s anyone’s guess what we’re going to face [nationally] in the next several months,” Sanchez said. “We’re skeptical of the need to make any big changes . . . given that future action in D.C. might destabilize the health care market.”

President Trump and the Republican-led Congress have tried unsuccessfully to repeal and replace the Affordable Care Act. The White House last week caused panic among state officials and insurance companies when it said it would stop paying billions of dollars in subsidies that insurers use under the law to provide discounted insurance to lower-income Americans. (On Tuesday, members of the US Senate said they had reached a compromise to continue payment of those subsidies.)

Massachusetts senators argued Tuesday that their bill will help the state remain a leader in health care reform. In 2020, they said, their long list of proposals would save the state an estimated $114 million at MassHealth, part of an overall savings in the health system of up to $525 million.

The legislation gives a larger oversight role to the Health Policy Commission, which was created in 2012 to monitor health care costs. The commission studies hospitals but has little purview over drug companies. That would change under the Senate proposal.

“This is the first time in Massachusetts we’re bringing pharma to the table,” said Senator James Welch, who cochairs the Joint Committee on Health Care Financing.

Caitlin Carroll, a spokeswoman for the Pharmaceutical Research and Manufacturers of America, said the trade group was still reviewing the Senate bill.

“We are committed to coming to the table, and look forward to continuing to work with Massachusetts policy makers on these important issues,” Carroll said.

The Senate’s proposal to reduce longstanding disparities in prices between hospitals is likely to stir controversy. If the hospital industry spends more than a set target, according to the legislation, the three biggest spenders would be fined.

Community hospitals have long complained that they are paid much less than big urban teaching hospitals for providing the same services, and they welcomed the Senate proposal at a State House press conference on Tuesday.

“I want commercial [insurers] to stop paying me on my ZIP code and start paying me on my quality,” said Winfield S. Brown, chief executive of Heywood Hospital in Gardner.

The Massachusetts Health & Hospital Association, which represents big health systems as well as small community hospitals, took a cautious approach.

“There are . . . complex areas of the bill that we believe deserve further vetting in order to prevent unintended consequences that could run counter to the goals set out by the Senate,” the association’s president, Lynn Nicholas, said in a statement.

The bill includes several other proposals that address increasing the use of telemedicine, expanding the role of paramedics, establishing new urgent care centers focused on mental health, and allowing employers and their employees to buy in to the public MassHealth program. It also adds protections against surprise medical bills and limits when hospitals can charge so-called facility fees.

The consumer group Health Care For All and a local unit of the Service Employees International Union said they support the Senate bill. The Massachusetts Association of Health Plans applauded the Senate’s efforts but said it wanted to work with senators on the specifics.

Senators plan to hold a public hearing Oct. 23 and to pass a bill by mid-November. The fate of the legislation in the House remains unclear.