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S 874

Designates the tenth day of March of each year as a public holiday, to be known as Harriet Tubman day

2025 Regular Session Introduced by Jamaal Bailey

The bill requires state and managed care payers to raise and stabilize minimum payment rates for behavioral health services in clinics by 5% per code (starting Jan 1, 2027) and ens

REPORTED AND COMMITTED TO FINANCE
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Bill Summary · S 874

Summary — S.874 (2025): "An Act strengthening mental health centers"

Note: The bill file and text provided concern strengthening behavioral/mental health clinics in Massachusetts. (The short title in the initial “Bill Information” — designating Harriet Tubman Day — appears to be inconsistent with the attached bill text. This summary reflects the actual bill text on file titled “An Act strengthening mental health centers.”)

Purpose

To raise and stabilize payment rates for behavioral health services delivered in licensed behavioral health clinics, require managed care entities to adopt higher minimum payment rates, and establish a recurring review process to keep rates aligned with inflation, local wages, and the costs imposed by governmental mandates.

Key provisions

  • Adds two new sections to Chapter 118E (sections 13D¾ and 13M).
  • Definitions: establishes terms such as “behavioral health clinic,” “behavioral health services,” “independent practitioner” (licensed independent clinical social worker), “managed care entity,” and “minimum payment rates.”
  • Payment increases (state-directed):
    • The Division (presumably the Division of Insurance or relevant division under Chapter 118E) must increase minimum payment rates for behavioral health services by 5% per procedure code, effective January 1, 2027.
    • The Division must ensure that each payment rate (or component of a bundled rate) for services delivered in behavioral health clinics is at least 20% higher than comparable services delivered by independent practitioners.
  • Managed care entity obligations:
    • The Division shall direct managed care entities (insurers, plans, behavioral health management firms, third-party administrators, Medicaid MCOs, ACOs) to increase minimum payment rates by 5% per procedure code effective January 1, 2027 and to ensure clinic rates are at least 20% above independent practitioner rates.
  • Biennial rate review:
    • The Division must review behavioral health service rates every two years and, at minimum, consider: (i) an inflationary adjustment factor no less than the total Medicare Economic Index for the prior two calendar years; (ii) where possible, comparison of staff wage estimates to the 75th percentile wage for that occupation per the most current U.S. BLS data for the Commonwealth; and (iii) reasonable costs to providers from any governmental mandates.

Who is affected

  • Behavioral health clinics licensed under Chapter 111 / 130 CMR 429.000 (primary beneficiaries).
  • Independent practitioners (licensed independent clinical social workers), whose reimbursement is used as a comparator for clinic rates.
  • Managed care entities, insurers, Medicaid MCOs, ACOs — required to implement higher minimum payments.
  • Patients and the behavioral health workforce — potential indirect effects: improved clinic financial stability, potential gains in staff wages and service capacity; possible premium or cost impacts for payers.

Implementation timeline & procedural status

  • Effective date for the scheduled rate increases: January 1, 2027.
  • Biennial reviews begin after enactment per the statutory schedule.
  • Legislative actions (selected): Introduced in Senate 03/05/2025; referred and reported by committees (Health Care Financing; then reported and committed to Finance). A hearing was scheduled for 05/12/2025; listed as REPORTED AND COMMITTED TO FINANCE (05/20/2025).
  • The bill inserts new statutory sections 13D¾ and 13M into chapter 118E.

Potential fiscal/operational impacts (high-level)

  • Short-term increased spending by public and private payers to meet minimum payment increases (5% per code; clinics paid ≥20% above independent practitioners).
  • Potential stabilization or expansion of clinic capacity and workforce if increases raise wages and cover mandate-related costs.
  • Insurers/managers may adjust contracts, utilization management, or network structures in response to mandated minimums.

For legislative or budget analysis, further information would be needed on current rate baselines by procedure code, projected utilization, the Division’s authority and rulemaking timeline, and estimated fiscal impact to Medicaid and commercial payers.

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

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