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SD 1126

An Act to address the financial sustainability of the Health Safety Net

194th Legislature (2025-2026) Introduced by John Velis

The bill strengthens Health Safety Net funding by raising baseline payments and adding a new supplementary 50% shortfall assessment on non-Medicaid MCOs to cover projected gaps.

House concurred
0
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Bill Summary · SD 1126

Overview

Bill SD 1126, An Act to address the financial sustainability of the Health Safety Net, aims to strengthen the funding and stability of Massachusetts’ Health Safety Net (HSN). The bill proposes to adjust transfer mechanisms, increase baseline funding, and establish a new supplemental assessment on certain managed care organizations (MCOs) to cover anticipated shortfalls in reimbursable health services. The House has concurred on the bill, which was introduced on February 27, 2025.

Key Provisions

  • Funding transfers and baseline levels (Sections 1–2)

    • Amends funding flow to the Health Safety Net Trust Fund, ensuring transfers from the fund to the HSN Trust Fund for payments to acute hospitals and community health centers.
    • Requires annual transfers to the Health Safety Net Trust Fund to meet at least the amounts described in subsection (b) of section 189 of Chapter 149.
    • Increases the minimum annual funding level: previously $30,000,000, now $60,000,000.

  • New definition and framework for shortfall funding (Section 3)

    • Adds “Supplemental shortfall assessment” as a defined concept: an amount equal to 50% of the annual revenue shortfall in the Health Safety Net Trust Fund, as determined by the executive office.

  • Hospital and MCO assessment mechanics (Sections 4–6)

    • Section 66 amendments ensure new transfer and assessment rules are incorporated into the framework governing hospital and MCO contributions.
    • Creates Section 68A: Supplemental MCO Assessment to Fund Shortfall.
    • By April 1 of the year before the fund’s fiscal year, the executive office estimates the reimbursable health services, emergency bad debt costs, available funding, and projected shortfall.
    • If a shortfall is projected, 50% of that shortfall is allocated to MCOs that are not Medicaid MCOs and subject to the assessment under Chapter 118E §68.
    • The supplemental shortfall is paid monthly to the Health Safety Net Trust Fund, with annually finalized amounts within 60 days after the fund year end.
    • The secretary of health and human services will implement regulations to support this assessment, including set rates, reporting requirements, enforcement mechanisms, treatment in mergers/ownership changes, and any refunds or credits for overpayments.

  • Allocation methodology (Section 7)

    • Modifies how shortfalls are allocated among hospitals: 50% of any shortfall should be allocated in a way that reflects each hospital’s proportional financial requirement for reimbursements, including a potential graduated reimbursement system and related regulations.

Who Would Be Affected

  • Hospitals and community health centers would receive more stable funding for reimbursable health services through the Health Safety Net Trust Fund.
  • Non-Medicaid managed care organizations would be subject to the new supplemental shortfall assessment (a new funding stream to the HSN).
  • Medicaid MCOs would not be subject to the supplemental shortfall assessment under the new provision.
  • Massachusetts executive office of health and human services would administer estimates, assessments, and regulations tied to the new funding mechanism.

Financial and Procedural Timeline

  • By April 1 prior to the fund’s fiscal year, the executive office must estimate projections and determine shortfalls.
  • Supplemental shortfall assessments are paid monthly, with finalization of the annual amount within 60 days after the fund year end.
  • The secretary of health and human services must promulgate regulations to implement the new assessment framework.

Status

  • Referred to the Committee on Health Care Financing (2025-02-27).
  • House concurred (status: House concurred).

This bill represents a structural step to bolster the Health Safety Net’s financial stability by increasing baseline funding and introducing a targeted, non-Medicaid MCO assessment to cover projected shortfalls.

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

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