Massachusetts Rate Setting Commission

Setting of rates to be paid by Massachusetts state agencies to health care institutions (and, from 1975, the approval of all hospital rate increases) was the responsibility successively of the Division of Hospital Costs and Finances (1954-1962, within the Commission on Administration and Finance), the Bureau of Hospital Costs and Finances (1963-1968, within the Executive Office for Administration and Finance), and the Rate Setting Commission (1968-1996, within the Executive Office of Human Services (Executive Office of Health and Human Services from 1992)--also known as the Massachusetts Rate Setting Commission). The commission was succeeded in 1996 by the executive office's Division of Health Care Finance and Policy.

Per St 1953, c 636 (effective 1954), a Division of Hospital Costs and Finances was established under the Commission on Administration and Finance to determine and certify rates to be paid by the various departments, boards, and commissions of the Commonwealth of Massachusetts purchasing care from hospitals, sanatoria, and infirmaries. It included an advisory committee of gubernatorial appointees. Per St 1962, c 757 (effective 1963), which established the Executive Office for Administration and Finance (succeeding the commission), the division was reconstituted as the Bureau of Hospital Costs and Finances (ss 5, 10). St 1963, c 809 established a separate Board of Rate Setting within the executive office, to determine rates for convalescent and nursing or rest homes.

St 1968, c 492 replaced the bureau with a Rate Setting Commission (also known as the Massachusetts Rate Setting Commission) consisting of the commissioner of administration and four gubernatorial appointees. The commission was reorganized by St 1973, c 1229, as an entity within the Executive Office of Human Services (Executive of Health and Human Services from 1992) consisting of three appointees of the governor with the advice from the secretary of human services (appointees of the secretary of human services with the approval of the governor per St 1985, c 737, s 10), and having an advisory council composed of pertinent members of the governor's cabinet and other agency heads. St 1975, c 424 extended the commission's purview to approval of any increased rates proposed by hospitals. Per 1976, c 409, a Rate Setting Commission Hospital Policy Review Board was established to monitor the commission's work in this area (abolished by St 1988, c 23, s 4, effective Oct. 1987 per s 92)

The commission's functions were described in MGLA c 6A, ss 31-77; they included, in addition to rate setting for health services purchased by the Commonwealth, the oversight of the hospital payment system, and analysis and publication of health cost and utilization information for use by lawmakers, state officials, providers, and consumers in the formulation of public policy and the purchase of health care services. The commission's responsibilities were enlarged in the area of health insurance per St 1991, c 495.

The commission was abolished and replaced by a Division of Health Care Finance and Policy within the Executive Office Health and Human Services per St 1996, ss 31, 275 (see also St 1998, c 161, ss 40-41)

NAME AUTHORITY NOTE. Series relating to the agencies described above can be found by searching the following access points for the time period stated: 1954-1962--Massachusetts. Division of Hospital Costs and Finances; 1963-1968--Massachusetts. Bureau of Hospital Costs and Finances (also: Massachusetts. Board of Rate Setting); 1968-1996--Massachusetts Rate Setting Commission (also, 1976-1987: Massachusetts. Rate Setting Commission Hospital Policy Review Board)