House budget committee advances $234M bill aiming to provide relief to hospitals
Photo | Courtesy of State House News Service
The Massachusetts State House
The House budget committee on Tuesday advanced a $234 million spending bill aimed at providing financial relief to hospitals and community health centers, reviving proposals that were left out of a broader agreement earlier this summer.
At the same time, the House Ways and Means Committee also proposed setting next year’s statewide primary election for Tuesday, Sept. 1, a move that would shift the date two weeks earlier than what state law typically dictates and keep Massachusetts among the latest states to hold its primaries.
The redrafted bill (H 4530), distributed to committee members Tuesday morning, uses fiscal year 2025 funds to address mounting financial strain at acute care hospitals and health centers, which lawmakers attributed to persistent economic pressures and what they described in a fact sheet as "an unfriendly federal government."
The Health Safety Net program pays hospitals and health centers for "medically necessary" services provided to low-income, uninsured, and underinsured residents, and "is experiencing a widening gap between available funds and the cost of claims submitted to the program as a result of reckless federal policies," the fact sheet said. The program also pays centers and hospitals for medical hardship expenses, and for some types of bad debt.
The legislation earmarks $199 million in relief for acute care hospitals, including $122 million in targeted payments to facilities serving low-income patients and facing the greatest financial distress. Another $77 million would be transferred to the Health Safety Net Trust Fund, which helps reimburse hospitals and health centers for care provided to uninsured residents.
Community health centers would receive $35 million, including $2.5 million directed to the Massachusetts League of Community Health Centers for initiatives such as shared services. The committee noted health centers “support the Commonwealth’s greatest share of vulnerable populations at a time when federal funding delays, Medicaid cuts, and rising pharmaceutical and other medical costs are straining CHC budgets.”
"This investment comes at a time of extraordinary distress for our hospitals and health systems, and with the impacts of new federal policies now on the horizon, policymakers are stepping up to ensure providers have the resources they need to carry on their mission and deliver accessible care for the commonwealth’s seven million patients," Massachusetts Health and Hospital Association President Steve Walsh said in a statement Tuesday.
Walsh called the bill “an immediate step and an extraordinary response from state leaders,” and said the association will continue working toward "long-term solutions to our commonwealth’s safety net challenge."
The Health Safety Net Fund is projected to experience a shortfall of $250 million in fiscal year 2025 and deficits up to $290 million in fiscal 2026, according to a June report from the Centers for Health Information and Analysis. The shortfall for fiscal year 2024 was $197 million.
Through the second quarter of fiscal 2025 — from Oct. 1, 2024, through March 31, 2025 — 43% of Massachusetts hospitals reported negative operating margins. Among health systems, which include affiliated physician practices, 70% reported negative margins, the CHIA report says.
The proposal closely mirrors a Senate plan passed in June that included $209 million in aid for hospitals and community health centers. That funding was dropped from a spending bill enacted in July, though Senate Ways and Means Chair Michael Rodrigues said lawmakers remained committed to resolving the issue.
“We’re not there yet on the provisions, but we are committed, and we want to say so publicly, committed to get to a solution as soon as possible,” Rodrigues said at the time.
During Senate debate on June 18, Rodrigues emphasized the bill’s payment structure prioritized hospitals serving the most low-income patients and under the most financial stress.
“This hospital strategy recognizes that the current Health Safety Net funding scheme is ineffective from both a resource and payments perspective,” he said.
Gov. Maura Healey echoed those concerns last week at a press conference in Worcester, where she promoted her DRIVE Bill to invest in medical research and jobs amid federal funding cuts.
“The other thing that is important for the Legislature to act on is shoring up the Health Safety Net,” she said. “We need to make sure that facilities like UMass Memorial, which is the safety net hospital for central Massachusetts, have the funding they need to enable people to continue to access care.”
She added, “And yes, the Trump administration made it a heck of a lot harder through the Big Beautiful Bill in Congress that is taking away funding for hospitals and health care centers. And so that’s why it’s important that we act quickly in the state to shore up our health care delivery system, and I’m going to continue to work on and lean into that.”
A recent Massachusetts Taxpayers Foundation report warned that Medicaid work requirements in the One Big Beautiful Bill will further strain the Health Safety Net after their implementation in January 2027.
“An increase in the uninsured population will increase financial pressure on the state’s larger health care system, as the cost of care for uninsured residents is covered through the state’s Health Safety Net, which currently has a funding shortfall of approximately $290 million and reimburses providers at rates far below MassHealth,” the report said.
In July, Rodrigues said the Senate proposal would nearly exhaust the transitional escrow account, a reserve that is funded with one-time surplus tax dollars, although the Senate bill gave the administration flexibility to fund line items from either the General Fund or the escrow account.
A House Ways and Means spokesperson said Tuesday that the administration retains the same discretion for $157 million in non-Health Safety Net appropriations in the bill.
“So, the remaining balance of the escrow account will depend on where the administration chooses to appropriate the money out of,” the spokesperson said.
Healey and the Legislature have already added hundreds of millions of dollars in spending to the state's $58.1 billion fiscal 2025 budget.
The governor has signed six supplemental budgets and filed two more. Last month, she filed a $2.45 billion bill that includes $2.05 million for Medicaid and $163 million for sheriff-related expenses.
Also Tuesday, the House Ways and Means Committee advanced legislation scheduling the 2026 statewide primary election for Tuesday, Sept. 1 — two weeks earlier than the Sept. 15 date currently dictated by law.
Healey proposed the change in her $2.45 billion budget filed last month. The House pulled just four pages out of that closeout supplemental budget (H 4531) to advance just the primary election measure.
Without legislative action, state law would place the primary seven weeks before the November election — on Sept. 15 — unless that date conflicts with a religious holiday.
Since the 2010 enactment of a federal law requiring ballots be sent to military and overseas voters at least 45 days before an election, lawmakers have opted to move the primary to an earlier date to meet the requirement.
If both legislative chambers and Healey agree to the Sept. 1 date, Massachusetts would still have one of the latest statewide primaries in the country.
According to the National Conference of State Legislatures, the earliest state primaries in 2026 are scheduled for March 3 in Arkansas, North Carolina and Texas. June is the busiest month for primaries, while Massachusetts and Delaware are currently among the latest.
The Ways and Means Committee also endorsed a bill (H 3932) to allow development of city-owned land for a new Boston Public Library branch and 33 units of affordable housing on Columbia Road in Dorchester.
The bills will likely be pushed forward by the full House when it holds a formal session on Wednesday.
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