Industry balks at Senate proposals to boost competition, price transparency

By | June 9, 2019

Dive Brief:

  • Payers and providers criticized proposed Senate bills that would ban certain contract clauses and force price transparency regulations in comments to the HELP Committee this week.
  • Employers and health policy experts, however, said banning anticompetitive practices and making more information available would benefit patients.
  • Industry groups differed in their response to legislation in the package that would ban surprise billing, one of many such bills being considered on the Hill. The American Hospital Association and America’s Health Insurance Plans both advocated for including air ambulance services in surprise billing legislation.

Dive Insight:

The sweeping package of draft bills released last month targets secretive dealings between payers and providers, surprise billing, price transparency, public health issues and high drug costs.

It also proposed a national claims-database, which policy experts have long sought. AMGA, a trade association representing multispecialty medical groups and integrated systems of care, in particular supported this idea, saying it is “essential for population health efforts, as well as for providing a level of accountability and transparency in the healthcare system.”

AHA also offered support, but cautioned the database should have strong privacy and security protections and the information should include context like the type of health plan and appeal rates.

AHA said it supports the attempt to tackle surprise billing and had a clear favorite among that proposed bill’s three options for determining payment: an in-network guarantee, rate setting or a defined arbitration process. The group suggested a modified form of arbitration that does not involve benchmark rates and that splits the cost of the proceedings while keeping them private.

It strongly opposed the rate setting option as government intrusion into private business negotiations and the in-network guarantee “because it interferes with the fundamental relationship between hospitals and their physician partners and severely limits providers’ ability to negotiate contract terms with insurers.”

AHIP, however, preferred payments based on a federal standard and not solely on independent dispute resolution. The ERISA Industry Committee (ERIC), which represents self-insured businesses, lobbied for the in-network guarantee, saying it would “eliminate any and all confusion, as well as any and all gaming of the system.”

A group of health policy advisers with the USC-Brookings Schaeffer Initiative for Health Policy said that while all three surprise billion proposals would be a step forward, only the in-network guarantee would “fully address the market failure” that causes the problem.

AHA had harsh words for one draft bill in particular, which would ban certain anticompetitive provision in contracts between payers and providers. “We do not support these policies because they would unnecessarily increase costs for providers, discourage commercial health insurers from pursuing value-based care arrangements with providers and/or put consumers at risk of being subject to practices that would limit their access to care,” the group wrote.

AHIP said proposals that “would disclose competitively negotiated rates should be rejected, as they will make health care more expensive, not less.”

ERIC disagreed. The group wrote in support of banning anti-steering and all-or-nothing clauses, as well as unconsented contractual obligation causes, referring to them collectively as “abusive contracting strategies undertaken by health systems and providers.”

The Brookings experts also wrote in support of banning such clauses as fostering more competition.

AHA said a provision that would prevent all-or-nothing clauses that require plans to contract with all providers in a particular system or none of them would require all insurers to “cherry-pick” hospitals to contract with, resulting in limited access to care.

In regard to a provision that would require all bills be sent to patients with 30 days, AHA said it could support such a component with key changes. The timeframe would need to begin on the date the health plan adjudicates the claim, not on the date of discharge. Also, the information should be available on request, not mandated for all patients, because it “may not be of interest to every patient.”

Finally, AHA recommends the bill clarify that a good faith attempt at compliance is sufficient, in part because many bills are returned due to incorrect mailing addresses.

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