§ 1 — Definitions

Section 1. As used in this chapter the following words shall, unless the context clearly requires otherwise, have the following meanings:--"Accountable care organization'', or "ACO'', a provider organization certified under section 15 of chapter 6D."Actual costs'', all direct and indirect costs incurred by a hospital or a community health center in providing medically necessary care and treatment to its patients, determined in accordance with generally accepted accounting principles."Acute hospital'', the teaching hospital of the University of Massachusetts Medical School and any hospital licensed under section 51 of chapter 111 and which contains a majority of medical-surgical, pediatric, obstetric and maternity beds, as defined by the department of public health."Alternative payment contract'', any contract between a provider or provider organization and a public health care payer or a private health care payer which utilizes alternative payment methodologies."Alternative payment methodologies or methods'', methods of payment that are not solely based on fee-for-service reimbursements; provided, that "alternative payment methodologies'' may include, but not be limited to, shared savings arrangement, bundled payments, and global payments; provided further, that "alternative payment methodologies'' may include fee-for-service payments, which are settled or reconciled with a bundled or global payment."Ambulatory surgical center'', any distinct entity that operates exclusively to provide surgical services to patients not requiring hospitalization and meets the requirements of the federal Health Care Financing Administration for participation in the Medicare program."Ambulatory surgical center services'', services described for purposes of the Medicare program under 42 USC § 1395k(a)(2)(F)(I); provided, that "ambulatory surgical center services'' shall include facility services only and shall not include surgical procedures."Carrier,'' an insurer licensed or otherwise authorized to transact accident or health insurance under chapter 175; a nonprofit hospital service corporation organized under chapter 176A; a nonprofit medical service corporation organized under chapter 176B; a health maintenance organization organized under chapter 176G; and an organization entering into a preferred provider arrangement under chapter 176I, but not including an employer purchasing coverage or acting on behalf of its employees or the employees of 1 or more subsidiaries or affiliated corporations of the employer; provided that, unless otherwise noted, the term "carrier'' shall not include any entity to the extent it offers a policy, certificate or contract that provides coverage solely for dental care services or vision care services."Case mix'', the description and categorization of a hospital's patient population according to criteria approved by the center including, but not limited to, primary and secondary diagnoses, primary and secondary procedures, illness severity, patient age and source of payment."Center'', the center for health information and analysis."Charge'', the uniform price for specific services within a revenue center of a hospital."Child'', a person who is under 18 years of age."Clinical affiliation'', any relationship between a provider organization and another entity for the purpose of increasing the level of collaboration in the provision of health care services, including, but not limited to, sharing of physician resources in hospital or other ambulatory settings, co-branding, expedited transfers to advanced care settings, provision of inpatient consultation coverage or call coverage, enhanced electronic access and communication, co-located services, provision of capital for service site development, joint training programs, video technology to increase access to expert resources and sharing of hospitalists or intensivists."Commission'', the health policy commission established in chapter 6D."Community health centers'', health centers operating in conformance with Section 330 of United States Public Law 95-626 and shall include all community health centers which file cost reports as requested by the center."Dependent'', the spouse and children of any employee if such persons would qualify for dependent status under the Internal Revenue Code or for whom a support order could be granted under chapters 208, 209 or 209C."Dispersed service area,'' a geographic area of the commonwealth in which a provider organization delivers health care services; provided, however, that the center may by regulation establish standards to determine dispersed service areas based on the number of zip codes, towns, counties or primary service areas, which standards may vary based upon the population density of various regions of the commonwealth."Eligible person'', a person who qualifies for financial assistance from a governmental unit in meeting all or part of the cost of general health supplies, care or rehabilitative services and accommodations."Employee'', a person who performs services primarily in the commonwealth for remuneration for a commonwealth employer; provided, that "employee'' shall not include a person who is self-employed."Employer'', an employer as defined in section 1 of chapter 151A."Executive director'', the executive director of the center."Facility'', a licensed institution providing health care services or a health care setting, including, but not limited to, hospitals and other licensed inpatient centers, ambulatory surgical or treatment centers, skilled nursing centers, residential treatment centers, diagnostic, laboratory and imaging centers, and rehabilitation and other therapeutic health settings."Fee-for-service'', a payment mechanism in which all reimbursable health care activity is described and categorized into discreet and separate units of service and each provider is separately reimbursed for each discrete service rendered to a patient."Fiscal year'', the 12 month period during which a hospital keeps its accounts and which ends in the calendar year by which it is identified."General health supplies, care or rehabilitative services and accommodations'', all supplies, care and services of medical, behavioral health, substance use disorder, mental health, optometric, dental, surgical, chiropractic, podiatric, psychiatric, therapeutic, diagnostic, rehabilitative, supportive or geriatric nature, including inpatient and outpatient hospital care and services, and accommodations in hospitals, sanatoria, infirmaries, convalescent and nursing homes, retirement homes, facilities established, licensed or approved under chapter 111B and providing services of a medical or health-related nature, and similar institutions including those providing treatment, training, instruction and care of children and adults; provided, however, that rehabilitative service shall include only rehabilitative services of a medical or health-related nature which are eligible for reimbursement under Title XIX of the Social Security Act."Governmental unit'', the commonwealth, any department, agency board or commission of the commonwealth and any political subdivision of the commonwealth."Gross patient service revenue'', the total dollar amount of a hospital's charges for services rendered in a fiscal year."Health care professional'', a physician or other health care practitioner licensed, accredited, or certified to perform specified health services consistent with law."Health care cost growth benchmark'', the projected annual percentage change in total health care expenditures in the commonwealth, as established in section 9 of chapter 6D.[ Definition of "Health care real estate investment trust'' inserted following definition of "Health care cost growth benchmark'' by 2024, 343, Sec. 31 effective April 8, 2025.]"Health care real estate investment trust'', a real estate investment trust, as defined by 26 U.S.C section 856, whose assets consist of real property held in connection with the use or operations of a provider or provider organization."Health care services'', supplies, care and services of medical, behavioral health, substance use disorder, mental health, surgical, 1 optometric, dental, podiatric, chiropractic, psychiatric, therapeutic, diagnostic, preventative, rehabilitative, supportive or geriatric nature including, but not limited to, inpatient and outpatient acute hospital care and services; services provided by a community health center or by a sanatorium, as included in the definition of "hospital'' in Title XVIII of the federal Social Security Act, and treatment and care compatible with such 1 services or by a health maintenance organization.[ Definitions of "Health disparities'' and "Health equity'' inserted following definition of "Health care services'' by 2024, 343, Sec. 32 effective April 8, 2025.]"Health disparities'', preventable differences in the burden of disease, injury, violence or opportunities to achieve optimal health that are experienced by socially disadvantaged populations."Health equity'', the state in which a health system offers the infrastructure, facilities, services, geographic coverage, affordability and all other relevant features, conditions and capabilities that will provide all people with the opportunity and reasonable expectation that they can reach their full health potential and well-being and are not disadvantaged in access to health care by their race, ethnicity, language, disability, age, gender, gender identity, sexual orientation, social class, intersections among these communities or identities or their socially determined circumstances."Health insurance company'', a company as defined in section 1 of chapter 175 which engages in the business of health insurance."Health insurance plan'', the medicare program or an individual or group contract or other plan providing coverage of health care services and which is issued by a health insurance company, a hospital service corporation, a medical service corporation or a health maintenance organization."Health maintenance organization'', a company which provides or arranges for the provision of health care services to enrolled members in exchange primarily for a prepaid per capita or aggregate fixed sum as further defined in section 1 of chapter 176G."Health status adjusted total medical expenses'', the total cost of care for the patient population associated with a provider group based on allowed claims for all categories of medical expenses and all non-claims related payments to providers, adjusted by health status, and expressed on a per member per month basis, as calculated under section 9 and the regulations promulgated by the center."Hospital'', any hospital licensed under section 51 of chapter 111, the teaching hospital of the University of Massachusetts Medical School and any psychiatric facility licensed under section 19 of chapter 19."Hospital service corporation'', a corporation established to operate a nonprofit hospital service plan as provided in chapter 176A."Major service category,'' a set of service categories to be established by regulation, which may include: (i) acute hospital inpatient services, by major diagnostic category; (ii) outpatient and ambulatory services, by categories as defined by the Centers for Medicare and Medicaid, or as established by regulation, not to exceed 15, including a residual category for "all other'' outpatient and ambulatory services that do not fall within a defined category; (iii) behavioral, substance use disorder and mental health services by categories as defined by the Centers for Medicare and Medicaid, or as established by regulation; (iv) professional services, by categories as defined by the Centers for Medicare and Medicaid, or as established by regulation; and (v) sub-acute services, by major service line or clinical offering, as defined by regulation.[ Definition of "Management services organization'' inserted following definition of "Major service category'' by 2024, 343, Sec. 33 effective April 8, 2025.]"Management services organization'', a corporation that provides management or administrative services to a provider or provider organization for compensation."Medicaid program'', the medical assistance program administered by the division of medical assistance under chapter 118E and in accordance with Title XIX of the Federal Social Security Act or any successor statute."Medical assistance program'', the medicaid program, the Veterans Administration health and hospital programs and any other medical assistance program operated by a governmental unit for persons categorically eligible for such program."Medical service corporation'', a corporation established to operate a nonprofit medical service plan as provided in chapter 176B."Medicare program'', the medical insurance program established by Title XVIII of the Social Security Act."Net cost of private health insurance'', the difference between health premiums earned and benefits incurred, which shall consist of: (i) all categories of administrative expenditures, as included in medical loss ratio regulations promulgated by the division of insurance; (ii) net additions to reserves; (iii) rate credits and dividends; and (iv) profits or losses, or as otherwise defined by regulations promulgate by the center."Network contract'', a contract entered between a provider or provider organization and a carrier or third-party administrator concerning payment for the provision of heath care services."Non-acute hospital'', any hospital which is not an acute hospital."Patient'', any natural person receiving health care services."Patient-centered medical home'', a model of health care delivery designed to provide a patient with a single point of coordination for all their health care, including primary, specialty, post-acute and chronic care, which is (i) patient-centered; (ii) comprehensive, integrated and continuous; and (iii) delivered by a team of health care professionals to manage a patient's care, reduce fragmentation, and improve patient outcomes.[ Definitions of "Payer'', "Pharmaceutical manufacturing company'' and "Pharmacy benefit manager'' inserted following definition of "Patient-centered medical home'' by 2024, 342, Sec. 15 and 2024, 343, Sec. 34 effective April 8, 2025.]"Payer'', any entity, other than an individual, that pays providers for the provision of health care services; provided, however, that "payer'' shall include both governmental and private entities; and provided further, that "payer'' shall include self-insured plans to the extent allowed under the Employee Retirement Income Security Act of 1974."Pharmaceutical manufacturing company'', an entity engaged in the: (i) production, preparation, propagation, compounding, conversion or processing of prescription drugs, directly or indirectly, by extraction from substances of natural origin, independently by means of chemical synthesis or by a combination of extraction and chemical synthesis; or (ii) packaging, repackaging, labeling, relabeling or distribution of prescription drugs; provided, however, that "pharmaceutical manufacturing company'' shall not include a hospital licensed under section 51 of chapter 111, a wholesale drug distributor licensed under section 36B of chapter 112 or a retail pharmacist registered under section 39 of said chapter 112."Pharmacy benefit manager'', as defined in section 1 of chapter 176Y."Primary service area'', a geographic area of the commonwealth in which consumers are likely to travel to obtain health services; provided, however, that the center may by regulation establish standards to determine primary service areas by major service category, which standards may vary based upon the population density of various regions of the commonwealth.[ Definition of "Private equity company'' inserted following definition of "Primary service area'' by 2024, 343, Sec. 35 effective April 8, 2025.]"Private equity company'', any company that collects capital investments from individuals or entities and purchases, as a parent company or through another entity that the company completely or partially owns or controls, a direct or indirect ownership share of a provider, provider organization or management services organization; provided, however, that "private equity company'' shall not include venture capital firms exclusively funding startups or other early-stage businesses."Private health care payer'', a carrier authorized to transact accident and health insurance under chapter 175, a nonprofit hospital service corporation licensed under chapter 176A, a nonprofit medical service corporation licensed under chapter 176B, a dental service corporation organized under chapter 176E, an optometric service corporation organized under chapter 176F, a self-insured plan, to the extent allowable under federal law governing health care provided by employers to employees, or a health maintenance organization licensed under chapter 176G."Provider'', any person, corporation partnership, governmental unit, state institution or any other entity qualified under the laws of the commonwealth to perform or provide health care services."Provider organization'', any 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, including but not 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."Public health care payer'', the Medicaid program established in chapter 118E; any carrier or other entity that contracts with the office of Medicaid to pay for or arrange the purchase of health care services on behalf of individuals enrolled in health coverage programs under Titles XIX or XXI of the Social Security Act, including prepaid health plans subject to section 28 of chapter 47 of the acts of 1997; the group insurance commission established under chapter 32A; and any city or town with a population of more than 60,000 that has adopted chapter 32B."Purchaser'', a natural person responsible for payment for health care services rendered by a hospital."Quality measures'', the standard quality measure set as defined by the center in section 14."Registered provider organization,'' a provider organization that has been registered in accordance with section 11 of chapter 6D."Relative prices'', the contractually negotiated amounts paid to providers by each private and public carrier for health care services, including non-claims related payments and expressed in the aggregate relative to the payer's network-wide average amount paid to providers, as calculated under section 9 and regulations promulgated by the center."Revenue center'', a functioning unit of a hospital which provides distinctive services to a patient for a charge."Resident'', a person living in the commonwealth, as defined by the center by regulation; provided, however, that such regulation shall not define a resident as a person who moved into the commonwealth for the sole purpose of securing health insurance under this chapter; and provided, further that confinement of a person in a nursing home, hospital or other medical institution shall not, in and of itself, suffice to qualify such person as a resident."Secretary'', the secretary of health and human services."Self-employed'', a person who, at common law, is not considered to be an employee and whose primary source of income is derived from the pursuit of a bona fide business."Self-insurance health plan'', a plan which provides health benefits to the employees of a business, which is not a health insurance plan, and in which the business is liable for the actual costs of the health care services provided by the plan and administrative costs."Self-insured group'', a self-insured or self-funded employer group health plan.[ Definition of "Significant equity investor'' inserted following definition of "Self-insured group'' by 2024, 343, Sec. 36 effective April 8, 2025.]"Significant equity investor'', (i) any private equity company with a financial interest in a provider, provider organization or management services organization; or (ii) an investor, group of investors or other entity with a direct or indirect possession of equity in the capital, stock or profits totaling more than 10 per cent of a provider, provider organization or management services organization; provided, however, that "significant equity investor'' shall not include venture capital firms exclusively funding startups or other early-stage businesses."Specialty hospital'', an acute hospital which qualifies for an exemption from the medicare prospective payment system regulations or any acute hospital which limits its admissions to patients under active diagnosis and treatment of eyes, ears, nose and throat or to children or patients under obstetrical care."State institution'', any hospital, sanatorium, infirmary, clinic and other such facility owned, operated or administered by the commonwealth, which furnishes general health supplies, care or rehabilitative services and accommodations."Surcharge payor'', an individual or entity that pays for or arranges for the purchase of health care services provided by acute hospitals and ambulatory surgical center services provided by ambulatory surgical centers; provided, however, that the term "surcharge payor'' shall include a managed care organization; and provided further, that "surcharge payor'' shall not include Title XVIII and Title XIX programs and their beneficiaries or recipients, other governmental programs of public assistance and their beneficiaries or recipients and the workers' compensation program established under chapter 152."Third party administrator'', an entity that administers payments for health care services on behalf of a client in exchange for an administrative fee."Third party payer'', an entity including, but not limited to, Title XVIII and Title XIX programs, other governmental payers, insurance companies, health maintenance organizations and nonprofit hospital service corporations; provided, that, "third party payer'' shall not include a purchaser responsible for payment for health care services rendered by a hospital, either to the purchaser or to the hospital."Title XIX'', Title XIX of the Social Security Act, 42 USC 1396 et seq., or any successor statute enacted into federal law for the same purposes as Title XIX."Total health care expenditures'', the annual per capita sum of all health care expenditures in the commonwealth from public and private sources, including: (i) all categories of medical expenses and all non-claims related payments to providers, as included in the health status adjusted total medical expenses reported by the center under subsection (d) of section 8; (ii) all patient cost-sharing amounts, such as deductibles and copayments; and (iii) the net cost of private health insurance, or as otherwise defined in regulations promulgated by the center.[ Definition of "Wholesale acquisition cost'' added by 2024, 342, Sec. 16 effective April 8, 2025.]"Wholesale acquisition cost'', the cost of a prescription drug as defined in 42 U.S.C. 1395w-3a(c)(6)(B).