Massachusetts “Patients First Act” Implementation and Enforcement Re-Extended

The Massachusetts Senate proposed an amendment on Monday December 2, 2024, that would delay implementation and enforcement of the 2021 Patients First Act addressing health care cost transparency. Section 31 of the amendment would replace the current implementation date of January 1, 2025, with January 1, 2027, providing an additional two years for providers to prepare for the additional notice requirements accompanying the law.

Governor Charles Baker signed into law An Act Promoting a Resilient Health Care System that Puts Patients First (Patients First Act) on January 1, 2021, to address perceived concerns regarding out-of-network (OON) billing. Under the Patients First Act, health care providers will be required to notify patients if the provider is in or out of the patient’s health plan. The Patients First Act has been the Massachusetts legislative attempt to address the challenges in private insurance and health care coverage market — a compliment to the Federal No Surprises Act, discussed in prior blog posts here and here.

Recognizing the challenges of implementing this law, the Commonwealth had already extended and re-extended the implementation and enforcement date for the Patients First Act. With the most recent extension, implementation and enforcement will now begin January 1, 2027, and health care providers will be required to notify patients about charges and payments for proposed admissions, procedures, services, and referrals that are specific to the patient’s health insurance carrier. Failing to comply with these requirements may lead to penalties of up to US$2,500 for each instance of noncompliance issued by the Department of Public Health (DPH).

Impacted Health Care Providers

The requirements of the Patients First Act apply to health care providers, defined to include doctors, dentists, registered nurses, social workers, pharmacists, chiropractors, psychologists, hospitals, clinics — including community health centers — and nursing homes.

Notice Requirements

The Patients First Act requires health care providers to notify patients or potential patients, verbally or in writing, of whether the provider participates in the patient’s health plan. This notice must be given upon scheduling an admission, procedure, or service that is related to a non-emergency medical condition or upon request by the patient. Once the initial notice is given, patients can waive this requirement for subsequent admissions, procedures, or services that are part of a continued course of treatment. The notification also varies based on whether a provider is in-network, meaning the provider does participate in the patient’s health plan, or out-of-network, in which case the provider does not participate in a patient’s health plan.

If a provider is in-network, at the time of scheduling an admission, procedure or service that is not for an emergency medical condition, the health care provider must provide notice that the provider participates in the patient’s health insurance plan. The patient may request the following information from their provider:

The allowed amount and any facility fees for the admission, procedure, or service, to be disclosed by the health care provider within two days of the patient’s request; and
If a provider is unable to quote a specific amount due to the inability to predict specific treatment or diagnostic codes, the provider must disclose the estimated maximum amount and any facility fees.

Patients may also obtain additional information in real time about applicable out-of-pocket costs from their insurance carrier’s toll-free number or website.

If a provider is OON, and if the appointment was scheduled more than seven days in advance of the admission, procedure, or service: the health care provider must inform the patient that the health care provider does not participate in the patient’s health plan verbally and in writing at the time of scheduling (no less than seven days before the appointment). Providers who fail to provide this notice are prohibited from billing the insured beyond any applicable copayment, coinsurance, or deductible that would be payable if the insured received the service from a provider who participates in the patient’s health plan.

If a provider is OON, and if the appointment was scheduled less than seven days in advance of the admission, procedure, or service: the health care provider must verbally inform the patient that the health care provider does not participate in the patient’s health plan, at the time of scheduling (no less than two days or as soon as practicable before the appointment). The provider must also give written notice upon the patient’s arrival for the appointment. Providers who fail to provide such notice are similarly prohibited from billing the insured beyond any applicable copayment, coinsurance, or deductible that would be payable if the insured received the service from a provider who participates in the patient’s health plan.

Regardless of the timing of the appointment scheduling, if a provider is OON, the health care provider must give notice of the charge and amount of any facility fees for the admission, procedure, or service at the time of scheduling. The provider must also give the patient notice that the patient will be responsible for the charges not covered through the patient’s plan and notice that the patient may be able to obtain the admission, procedure or service at a lower cost from a health care provider who participates in the patient’s health plan.

Referral Requests: In the case of referrals, requirements depend on whether a provider is referring the patient to another provider or whether the provider is directly scheduling, ordering, or otherwise arranging health care services for a patient with another provider. When a provider refers a patient to another provider, the referring provider must:

Disclose if the referred provider is part of or represented by the same provider organization^[1] as the referring provider;
Inform the patient that the referred provider may not participate in the patient’s health plan, that there may be applicable out-of-network rates, and that the patient has an opportunity to verify whether the referred provider participates in their health plan prior to making an appointment or agreeing to use the provider’s services; and
Provide the patient with sufficient information about the referred provider so that the patient may obtain additional information about whether the referred provider participates in their health plan and any applicable out-of-pocket costs should the patient use the referred provider’s services.

If a provider is directly scheduling, ordering, or otherwise arranging health care services for a patient with another provider, before doing so, the referring provider must verify whether the referred provider is in-network and notify the patient if the referred provider is either OON or the referring provider cannot verify whether the referred provider is in-network.

Penalties

The law authorizes DPH to penalize health care providers who fail to comply with these requirements, with a penalty of up to US$2,500 in each instance. Effective January 1, 2027, the Department will accept and investigate complaints. The initial penalty amount will be US$0 to give providers time to come into compliance.

Any patient who has not received the required notice may submit a complaint, in writing, to the health care provider’s professional licensing board, or in the case of a licensed facility, to the DPH Bureau of Health Care Safety and Quality. The board will notify the health care provider of the complaint and give the provider ten days to submit written documentation demonstrating compliance with the notice requirements.

Moving Forward

With increasing discourse about pricing transparency in health care costs nationwide, the Commonwealth’s choice to pass the Patients First Act supplements similar efforts made in the federal government. However, the recurring extensions of implementation and enforcement reflect the extraordinary complexities that come with proper application of this law to providers. Moving forward, these challenges may serve as a guide for other states — particularly in New England — for responding to conversations surrounding health care pricing and anticipating the difficulties that come with resolving such a complex matter. Providers and policymakers in other states should take the necessity of extending implementation of this new law by six years as evidence that even a well-intentioned transparency law such as this should be carefully considered and discussed with the provider community before being enacted.

Foley will monitor legislative activity in the Commonwealth to help Massachusetts-based health care organizations prepare for what reforms are ultimately passed. Foley is here to help you address the short and long-term impacts in the wake of regulatory changes. We have the resources to help you navigate these and other important legal considerations related to business operations and industry-specific issues. Please reach out to the authors, your Foley relationship partner, or to our Health Care Practice Group and Health Care & Life Sciences Sector with any questions.

[1] G.L. c. 111, s. 228 specifically references G.L. c. 6D, s1, which defines “provider organization” as follows:

“[A]ny corporation, partnership, business trust, association or organized group of persons, which is in the business of health care delivery or management, whether incorporated or not that represents 1 or more health care providers in contracting with carriers for the payments of heath care services; provided, that ”provider organization” shall include, but not be limited to, physician organizations, physician-hospital organizations, independent practice associations, provider networks, accountable care organizations and any other organization that contracts with carriers for payment for health care services.”

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