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SECTION 28	Section 8A of chapter 180 of the General Laws, as appearing in the 1998 Official Edition, is hereby
amended by adding the following subsection:-

(1) A nonprofit acute-care hospital, as defined in section 25B of chapter 111, or a nonprofit health maintenance organization as defined inchapter 176G shall give written notice of not less than 90 days to the attorney general and to the commissioner of public health if such notice concerns a nonprofit health maintenance organization, before it enters into a sale, lease, exchange, or other disposition of a substantial amount of its assets or operations with a person or entity other than a public charity. No such notice shall be required if a written waiver of such notice is executed by the attorney general. When investigating the proposed transaction, the attorney general shall consider any factors that the attorney general deems relevant, including, but not limited to, whether:

(i) the proposed transaction complies with applicable general nonprofit and charities law.

(ii) due care was followed by the nonprofit entity.

(iii) conflict of interest was avoided by the nonprofit entity at all phases of decision making.

(iv) fair value will be received for the nonprofit assets.

(v) the proposed transaction is in the public interest.

(2) The attorney general shall assess the entity proposing to receive such assets or operations for reasonable costs related to, and shall expend such amounts for the review of the proposed transaction as determined by the attorney general to be necessary. Such reasonable costs may include expert review of the transaction, a process for educating the public about the transaction and obtaining public input and administrative costs. All materials filed by the parties in the course of the attorney general review shall be available for public inspection pursuant to section 10 ofchapter 66 and section 7 of chapter 4.

(3) The attorney general shall, during the course of his investigation, hold at least one public hearing, in a location convenient to the population served by the nonprofit entity, at which any person may file written comments and exhibits or appear and make a statement. At least 21 days in advance of the public hearing, the nonprofit entity shall publish notice of the hearing in a newspaper of general circulation where the entity is located. The notice shall include the name of the nonprofit entity, the name of the acquirer, or other parties to the proposed transaction, the nature of the proposed transaction and the anticipated consideration that will be paid by the acquirer. In addition, the notice shall offer to provide to any person upon request to the nonprofit entity a detailed summary of the proposed transaction and copies of all transaction and collateral agreements. As defined insection 7 of chapter 4, compliance with this notice requirement will not require disclosure of confidential trade secret, commercial or financial information contained in schedules or exhibits of those agreements.

(4) If a charitable fund results from the transaction, and if the nonprofit entity making the disposition does not continue its operation of a nonprofit hospital or nonprofit health maintenance organization, the governance of the charitable fund shall be subject to review by the attorney general and approval by the court. The governance of the charitable fund shall be broadly based in the community historically served by the predecessor nonprofit acute care hospital or health maintenance organization and shall be independent of the new for-profit entity. The attorney general shall conduct a public hearing in connection with his review of the plan for the governance of the resulting charitable fund. An appropriate portion of any resulting proceeds shall, if determined to be necessary by the attorney general, be used for assistance in the development of a community-based plan for the use of the resulting charitable fund.

(5) The entity receiving such assets or operations shall, if determined to be necessary by the attorney general in consultation with the department of public health, provide the funds, in an amount determined by the commissioner of public health, for the hiring by the department of public health of an independent health care access monitor to monitor and report quarterly to the attorney general, the department of public health and the committee on health care on community health care access by the entity, including levels of free care provided by the entity. The funding shall be provided for three years after the transaction. The entity receiving such assets or operations shall provide the monitor with appropriate access to the entity's records in order to enable the monitor to fulfill this function. To prevent the duplication of any information already reported by the entity, the monitor shall, to the extent possible, utilize data already provided by the entity to the division of health care finance and policy pursuant tochapter 118G or to any other agency. No personal identifiers shall be attached to any of the records obtained by the monitor and all such records shall be subject to the privacy and confidentiality provisions of section 70E ofchapter 111.

(6) No officer, director, incorporator, member, employee, staff, physician, expert or advisor of the nonprofit entity making the disposition shall derive improper benefit from the transaction. The officers, directors, incorporators, members, senior managers, staff, physicians, experts and advisors of the nonprofit entity making the disposition shall be prohibited from investing in the for-profit entity for a period of three years following such disposition.

SECTION 29

There is hereby established a special commission to conduct an analysis of physician compensation.

Said commission shall consist of: the commissioner of public health, or his designee; the commissioner of medical assistance, or his designee; and four persons to be appointed by the governor, one of whom shall represent a graduate school of public health and who shall be a medical economist; one of whom shall represent health care for all; one of whom shall represent the ad hoc committee to defend health care; and one of whom shall represent the Massachusetts Medical Society. Said commission shall evaluate physician compensation arrangements, including, but not limited to, risk threshold arrangements, the feasibility of compensation arrangements that are severity adjusted based on the population of patients served, and inducements to limit, reduce or deny health care. Said commission shall report its findings, and file any draft legislation prohibiting or regulating such arrangements with the clerks of the house of representatives and the senate, the joint committee on health care and the house and senate committees on ways and means not later than February 15, 2001. Thereafter, the office of patient protection in the department of public health shall conduct, every two years, analyses to evaluate physician compensation arrangements using evidence based studies to review and report on arrangements that may inappropriately limit, deny or withhold services. Upon request, the office shall have access to patient surveys and outcome studies as provided in this section. For purposes of this section, "risk threshold" means the maximum financial risk to which a licensed health care professional, licensed health care provider group or organization that employs or utilizes services of a licensed health care professional may be exposed under a licensed health care provider incentive plan.

SECTION 30

Not later than six months after the effective date of this act, the division of health care finance and policy

shall issue a proposed methodology for the preparation of the health plan report card pursuant to section 24 of chapter 118G of the General Laws. The division shall issue the initial report card not later than six months after the announcement of the methodology and annually thereafter.

SECTION 31

(a) The office of patient protection in the department of public health shall establish a pilot program in a labor

market area, other than the city of Boston, which requires carriers offering health care benefits through a network also to offer such benefits through a point of service option to all insureds. For the purposes of this section, "point of service option" means a choice exercised by an insured and their dependents to obtain diagnostic and treatment services from a provider of health care services who is not under contract with or otherwise a participating provider in a carrier's network.

(b)(1) A carrier may require an insured that accepts the additional coverage under a point of service option under subsection (a) to be responsible for the payment of a reasonable additional cost over the amount of the premium for the coverage offered by the carrier for the services restricted to network providers.

(2) A carrier may impose reasonable cost sharing provisions for the point of service option based on whether the health care services are provided through the carrier's network or outside the carrier's network.

(c) A carrier may require that the insured accept or reject the point of service option at the beginning of the term of the contract or policy under which health care benefits are to be provided, with the option of modifying such decision during the carrier's open enrollment period.

(d) The office of patient protection shall require such carriers to maintain and forward to the office statistics on usage of such point of service option, the cost of such option, the impact on health care quality and access, and customer satisfaction. Such pilot program shall expire on December 31, 2001. The office shall file a report on the impact of such pilot program on health care quality and cost, together with any draft legislation, on or before October 1, 2001.

SECTION 32

There is hereby established an advisory committee for the purpose of arranging for and evaluating an

independent analysis of the feasibility and fiscal implications of establishing a system of consolidated health care financing and streamlined health care delivery model accessible to every resident of the commonwealth.

Said advisory committee shall review and evaluate said independent analysis in order to ensure that (1) access to affordable health care services that eliminates barriers to such services, medications and supplies necessary for the prevention, diagnosis, treatment, rehabilitation and palliation of physical and mental illness is available for all residents of the commonwealth; (2) patients have the right, within the terms of their health benefit plan and applicable state statutes, to freely choose their health care providers; (3) the high quality of health care in Massachusetts shall be preserved and promoted; (4) health services are organized in the most efficient manner possible, including the simplification of administrative procedures and reduction in administrative costs, to promote quality, affordable accessible patient care; (5) no financial incentives be permitted that limit patient access to medically necessary health care services.

Said advisory committee shall consist of the chairmen of the house and senate committees on ways and means, the joint committee on taxation, the joint committee on health care, and the joint committee on insurance, or their designees; one member of the minority party to be appointed by the minority leader of the house of representatives; one member of the minority party to be appointed by the minority leader of the senate; the secretary of health and human services or his designee, the commissioner of health care finance and policy or his designee, and one representative from each of the following organizations: the state labor council of the American Federation of Labor/Congress of Industrial Organizations, Associated Industries of Massachusetts, the Massachusetts Business Roundtable, the Massachusetts Municipal Association, the Massachusetts Hospital Association, the Massachusetts Medical Society, the Massachusetts Nurses Association, the Massachusetts Association of Health Maintenance Organizations, the Massachusetts League of Community Health Centers, the Home and Health Care Association of Massachusetts, the Massachusetts Human Services Coalition, the Massachusetts Extended Care Federation, the Massachusetts Law Reform Institute, the Massachusetts Senior Action Council, Health Care for All, Mass-Care, the Small Business Service Bureau, the Life Insurance Association of Massachusetts, the Ad Hoc Committee to Defend Health care, and the Service Employees International Union. Said advisory committee shall be co-chaired by one advisory committee senate member designated by the senate president and one advisory committee house member designated by the speaker of the house of representatives.

Said advisory committee shall, subject to appropriation and upon the approval of the appointed co-chairs of said advisory committee, commission an independent consultant to analyze, evaluate and measure the implications of creating said system of consolidated health care financing and streamlined health care delivery model. Said advisory committee shall advise, direct and consult with said independent consultant on the execution and completion of said analysis. Said analysis shall include, but not be limited to, an account of the following: (a) the legal, political, and financial impacts associated with the transition from the existing health care delivery system in the commonwealth to a streamlined and unified system of health care benefits which may be administered by the state; (b) the projected cost of establishing said system and a detailed account of the savings resulting therefrom; (c) the cost of administering said system, including an itemized account of the methodology used to determine said cost projection; (d) the revenue streams necessary to implement and sustain said system; (e) a list of any and all required policy and budgetary changes needed to implement said system; (f) an analysis of said system's impact on the state's private health care market, the consumers, and the employers who may purchase such health care benefits.

Said advisory committee shall convene upon the call of the co-chairs in order to (a) advise and consult with said independent consultant on the completion and implementation of said analysis; (b) review and make recommendations on any and all preliminary findings of said independent consultant's analysis; (c) review and make recommendations to said independent consultant for a report to be submitted to the general court.

Said independent consultant shall report to the general court the preliminary results of its analysis by filing the same with the clerk of the house of representatives and the clerk of the senate on or before April 30, 2001. Said advisory committee shall file its preliminary recommendation, based on the preliminary report of said independent consultant with the clerk of the house of representatives and the clerk of the senate, on or before May 31, 2001. Said independent consultant shall report to the general court the final results of his analysis and findings by filing the same with the clerk of the house of representatives and the clerk of the senate on or before November 15, 2001. Said advisory committee shall file its final recommendations based on the final report of said independent consultant with the clerk of the house of representatives and the clerk of the senate on or before December 31, 2001.

SECTION 33	Sections 2, 4, 28 and 34 shall apply to all transactions for which notice to the attorney general pursuant to
section 8A of chapter 180 of the General Laws has been given on or after December 4, 1996.

SECTION 34

Nothing contained in the provisions of sections 2, 4, 28, and 33 shall be construed to limit the existing authority

of the attorney general, the commissioner of public health, any other government official or entity, or the court to review, approve, disapprove, or impose conditions upon a transaction or disposition under existing law.

SECTION 35

Sections 5, 6, 7, 8, 14, 15, 19, 21, 22, 23, 25, 26, 27, 30, and 31 shall take effect on January 1, 2001.

Approved July 21, 2000.

The above text may also be viewed on the Commonwealth of Massachusetts
site at: www.state.ma.us/legis/laws/seslaw00/sl000141.htm .