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S 3140

Amendment S.3140

194th Legislature (2025-2026) Introduced by Mike Rush

Massachusetts would review nonprofit hospital drug chargemaster pricing for reasonableness, publish findings, and empower AG enforcement to curb prices harming patients.

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Bill Summary · S 3140

Summary of Bill S.3140 ( Massachusetts, 194th General Court)

Main purpose

S.3140 aims to determine whether nonprofit hospital drug chargemaster pricing is unreasonable or excessive and to provide a framework for state-level review, reporting, and enforcement. The bill creates a structured process involving the Center for Health Information and Analysis (CHIA), the Health Policy Commission (HPC), and the Attorney General (AG) to assess drug pricing practices and address affordability and consumer protection.

Key provisions and changes

  • New CHIA referral-driven review (Section 8B, Chapter 6D):

    • CHIA can refer drugs from nonprofit hospitals for review and require disclosure on a standard form.
    • Information requested includes chargemaster pricing methodology, price increase history (last 5 years), factors behind pricing, acquisition and reimbursement benchmarks, 340B status, and whether pricing differs for 340B vs non-340B drugs.
    • Hospitals must attest accuracy; materials are confidential to protect trade secrets, with public reports summarized but not disclosing sensitive data.
    • The HPC, upon review, can determine if pricing is unreasonable or excessive (e.g., chargemaster price >120% of ASP or higher than similarly situated hospitals). If so, HPC requests additional information with at least 30 days’ notice.
    • The HPC must issue a written, public report within 180 days, detailing findings, methodology, differential pricing (noting 340B distinctions), and recommended corrective actions.
    • Reports may not reveal exact supplier prices or other protected data.

  • Attorney General enforcement and patient-benefit consideration (Section 8C, Chapter 6D):

    • Following an HPC finding of unreasonableness or excess pricing, the AG can review materials and decide whether to open an investigation.
    • If warranted, the AG may investigate continued chargemaster pricing that mirrors the HPC finding.
    • Hospitals may certify whether a majority of the markup revenue is used to benefit patients (e.g., lowering out-of-pocket costs, discounts, charity care).
    • The AG may consider factors such as actual patient benefit, automatic vs. on-application benefits, and the sufficiency of such benefits in enforcement decisions.
    • If deceptive or unfair practices are found, actions under Chapter 93A (unfair or deceptive acts) or other laws may be pursued, with consideration given to the certification provided by the hospital.
    • The HPC report can be used as evidence, but is not controlling in legal determinations.

  • CHIA drug chargemaster reporting and referrals (Section 10B, Chapter 12C):

    • Hospitals must annually submit a Drug Chargemaster Pricing Methodology Report describing pricing categories, inputs (e.g., acquisition cost, ASP, etc.), markup formulas and ranges, 340B distinctions, frequency of updates, responsible officers, and material changes.
    • A supplemental Drug Pricing Schedule for up to 100 drugs (or more as regulated) with details on chargemaster amounts, category, 340B status, ASP, and 120% ASP threshold.
    • CHIA will refer hospitals to HPC for drugs with chargemaster >120% of ASP or other concerning patterns.
    • Public reporting by CHIA is required in a way that protects confidential data but informs affordability and pricing structure.
    • Regulations will define material changes, data formats, audit procedures, and coordination with other price-transparency rules.
    • Filings are due by March 31 each year for the prior calendar year; updates are required within 30 days after material changes.
    • Civil penalties for noncompliance: up to $10,000 for initial violation, $25,000 for a second within 3 years, and $50,000 for each subsequent violation; daily penalties may apply after notice and cure period.

Who is affected

  • Nonprofit hospitals in Massachusetts that establish chargemaster prices for drugs (including affiliated outpatient departments and related entities).
  • Center for Health Information and Analysis (CHIA) and Health Policy Commission (HPC), which will conduct reviews, analysis, and publish reports.
  • Attorney General (AG), which may investigate and enforce if pricing is deemed unfair or deceptive.
  • Patients, providers, payers, and employers who may benefit from improved pricing transparency and potential affordability measures.

Procedural and timeline aspects

  • HPC reviews and issues a public report within 180 days of receiving information.
  • CHIA collects annual methodology reports and supplemental schedules due by March 31 each year; referrals to HPC may occur within 90 days after submission.
  • If material concerns are found, the AG may open investigations and pursue enforcement.
  • Ongoing reporting and potential audits are supported by regulations specifying data formats, redaction standards, and confidentiality protections.

Overall, the bill codifies a comprehensive mechanism to scrutinize nonprofit hospital drug chargemaster pricing, promote transparency, assess patient affordability implications, and enable enforcement against unreasonable pricing practices.

Compiled from official sources — confirm details with the bill’s official record.

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