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September 22, 2016

New hospital expansion approval process applauded

While proposed changes to the process by which state officials examine hospital expansions were applauded at a hearing Wednesday, several speakers cautioned that restrictions on ambulatory surgery centers could end up raising health care costs and squeezing consumers.

The Department of Public Health is planning a broad overhaul of its regulations governing the review of proposed capital expenditures and changes in service by health care providers. Officials said last month the revisions will modernize and streamline the process, make it more transparent and allow for more community engagement.

"From a health care consumer advocacy perspective, it's been a frustrating year here in Massachusetts," said Paul Hattis, a health policy professor at Tufts University Medical School who served on the state's Health Policy Commission until this year. "That's why, with some sense of hope, I can say these proposed regulations represent the best health policy development that's come forward this year, either through the Legislature or a state government agency."

Hattis said the new regulations overall would "support both a better functioning health care system and provide some sense of improved accountability over health care providers in their expansion or capital investment activities."

The changes, according to a DPH fact sheet, include an "over 57% reduction in regulatory provisions," incentives for competition and innovation, and a simplified application process for hospital mergers and acquisitions. They would create an expedited review for deferred maintenance and add follow-up reporting requirements after projects are approved.

Under the proposed regulations, the DPH would be required to electronically post project materials, and the commissioner of public health could call for extra public hearings on projects.

The revisions would also lift a moratorium on expansions and other projects at ambulatory surgery centers, allowing instead for "controlled expansion" of freestanding ambulatory surgery centers, but only if they either have hospital affiliation or are joint ventures with a hospital, according to a presentation to the Public Health Council last month.

"This arbitrary distinction will likely constrain the innovation, efficiency, value and access that freestanding ambulatory surgery centers currently bring to the Massachusetts health care system," said Brendan Abel of the Massachusetts Medical Society. "There's been nearly a singular focus by the Legislature, by regulators and many stakeholders here in this room over the past several years to promote policies and positions...increasing access, improving quality and reducing costs."

Greg DeConciliis, the president of the Massachusetts Association of Ambulatory Surgery Centers, said the revisions as written would result in a "migration of patients" to higher-cost hospital outpatient departments and encourage hospitals to acquire surgery centers, increasing consolidation and reducing competition in the health care market.

Health care spending in Massachusetts rose to $57.2 billion in 2015, growing 3.9 percent over the previous year and slightly outpacing the benchmark set under a 2012 cost containment law. Policymakers and watchdogs have aimed to rein in climbing health costs that strain the budgets of state government, employers and individuals.

"With state health care spending coming in above the benchmark for a second straight year, the high-quality, cost-effective services that [ambulatory surgery centers] can provide are exactly the type of expanded services that further the goals of this overall revision," said Michael Caljouw of Blue Cross Blue Shield of Massachusetts.

Caljouw said his company was in "strong support" of the revisions as a whole and suggested that the department allow the expansion of all ambulatory surgery centers that "exhibit the same commitment to the community that we expect from hospitals," in part by agreeing to accept Medicare and Medicaid patients.

Eric Linzer, a vice president at the Massachusetts Association of Health Plans, offered another alternative, recommending the department allow ambulatory surgery centers to access the program if they can "demonstrate that they are improving quality and lowering cost."

A second hearing on the proposed regulatory changes to the Determination of Need program is scheduled for Sept. 26 in Northampton, and written comments will be accepted until Oct. 7. A related series of listening sessions on the development of statewide health priorities and community engagement standards will be held in Worcester, Plymouth and Boston in October.

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