HPC outlines legal process and oversight for setting Massachusetts health cost benchmark; performance plans remain available tool

Health Policy Commission executive director David Seltz told the commission and the joint legislative committee that the benchmark is set under state law and the HPC has discretion — within statutory limits — to modify it each year after a public hearing and consultation with the Joint Committee on Health Care Financing.

Seltz reviewed the law’s phased approach: in the statute’s first five years the benchmark was a fixed PGSP‑based rate of 3.6%, then the law tied the benchmark to potential gross state product minus 0.5 percentage points for the next five years while permitting limited modification. After the 10‑year mark, the statute preserves the benchmark’s tie to long‑term economic growth but gives the HPC broader discretion to raise or lower the benchmark if warranted.

“Now after year 10, we are in a new phase as prescribed by the law where, again, the default rate for the benchmark to be set every…