Massachusetts senators approved a sweeping bill at midnight Thursday that seeks to control the rising costs of medical care and prescription drugs, including a controversial plan that would fine hospitals if spending rises too fast.
The legislation also would require pharmaceutical companies to submit to more scrutiny from state officials. The bill sailed through the overwhelmingly Democratic Senate by a 33-6 margin at the stroke of midnight, after two days of debate and much last-minute wrangling over technical language.
Senators approved several changes to their original bill, including to some sections that had drawn criticism from the health care industry, but they said it remained the same at its core. The bill’s drafters said it will help curb costs for consumers and the state budget, while improving patient care.
“Many of the issues we’re addressing here have gone unaddressed for a long time, and we just don’t have the ability to kick the can down the road anymore,” said Senator James T. Welch, a West Springfield Democrat and lead author of the bill.
Opponents and skeptics say now is not the time for sweeping health care legislation, given the ongoing uncertainty around health care in Washington and the fact that Massachusetts passed a health care cost control bill in 2012.
Republican Bruce Tarr, the Senate minority leader, questioned the need for additional “bureaucracy” that could drive costs higher, and said lawmakers should focus instead on measures to increase the transparency around health costs.
Tarr, who voted against the bill, said the legislation’s “Achilles heel” is that it failed to seriously deal with the rising costs of the state Medicaid program, MassHealth.
The bill’s fate in the House remains unclear. House leaders have not said when they will take up health care legislation.
The 100-page bill attempts to help struggling community hospitals by setting a floor for the reimbursements they receive from insurers. Hospitals would have to be paid at least 90 percent of the average price of a service, according to the legislation.
Hospitals are already major contributors to health care spending, so to control costs, the bill also sets a benchmark for annual growth in hospital spending, estimated at 2.7 percent. If the hospital industry exceeds that benchmark, some hospitals would have to pay hefty penalties.
The idea of the penalties drew strong objections from the hospital industry, particularly the state’s largest health system, Partners HealthCare. Partners executives said their two biggest medical centers, Massachusetts General and Brigham and Women’s, would be fined unfairly under the measure.
The bill originally allowed for penalties against just three hospitals where spending is highest, but late Thursday, senators amended the language to provide for more flexibility. The amended bill would not limit the fines to just three hospitals.
“We heard what Partners said,” Welch said.
The Massachusetts Health & Hospital Association had also raised objections about the penalties. And the Massachusetts Association of Health Plans, which represents insurers, raised concerns that the bill could encourage many hospitals to spend more, not less, if only certain hospitals were subject to a penalty.
Senate President Stanley C. Rosenberg said the bill takes a “market-driven approach” to addressing price disparities among different hospitals. “We’re asking the market to correct itself,” he said.
Senators also approved a measure Thursday to study a single-payer health care system, a nod to the more liberal members of the chamber.
The Senate bill omits several proposals from Governor Charlie Baker to curb spending in the MassHealth program, which covers poor and low-income residents. Baker wanted to change eligibility rules and move some adults off of MassHealth and onto other subsidized plans, but lawmakers have so far rejected those ideas.
“My big concern with the Senate health care bill is it doesn’t save the state any money,” Baker told reporters Thursday. “If we don’t do some things to change the way our system operates, we put education spending at risk, we put transportation spending at risk, and we put general local aid to cities and towns, public safety, and fire protection at risk.”
Senator Karen E. Spilka, the Senate budget chief, said she was “dumbfounded” by the governor’s comment. Senate leaders predict that in 2020, their legislation would save an estimated $114 million in MassHealth, part of an overall savings in the health system of up to $525 million.
House leaders have not detailed their plans to deal with health care costs. “Right now, we’re just listening to stakeholders and hearing what people have to say,” said Representative Jeffrey Sanchez, the House budget chief. “Anything that we do, we want to make sure that it’s based off a very defined problem.”
The Senate bill would requires pharmaceutical companies for the first time to submit price and other data to the state Health Policy Commission, a watchdog agency. It would also require drug makers to testify at the commission’s annual hearing, where health care executives publicly discuss what they’re doing to control costs.
“We are concerned with the current form of the Senate bill but know it’s only the first step in the process,” Robert K. Coughlin, president of the Massachusetts Biotechnology Council, said in a statement Thursday. “We look forward to working with the House to develop approaches for the state to adequately measure the value that prescription drugs bring to patients and the healthcare system, in lives improved and costs avoided.”
The legislation would expand the role — or scope of practice — for several types of health care workers: nurse practitioners, nurse anesthetists, psychiatric clinical nurse specialists, optometrists, and podiatrists. It would also create a new type of dental care provider, called a dental therapist, who could do some of the work now left to dentists.
In addition, the legislation would require hospitals to get more aggressive in preventing patients from being re-admitted just days or weeks after being discharged.
The wide-ranging Senate bill includes many other provisions spanning MassHealth and the commercial health insurance market. It is the most comprehensive health care bill to be debated on Beacon Hill in five years. In 2012, lawmakers approved legislation that set a benchmark for controlling the overall growth in health spending to 3.6 percent a year, among other measures.Priyanka Dayal McCluskey can be reached at firstname.lastname@example.org. Follow her on Twitter @priyanka_dayal.