Bipartisan Plan Aims to Address Healthcare Costs

May 29, 2019

The new plan could affect all of healthcare and could radically change contract provider agreements. 

There is a good chance that provisions of a new proposed sweeping healthcare measure will become law, given it is bipartisan and the Administration is trying to address similar issues.

The proposal, introduced by Senate health committee Chairman Lamar Alexander (R-Tennessee), and ranking member Patty Murray (D-Washington) includes five related, transformative components, according to experts.

They are:

  • Reducing ‘surprise billings’ by requiring contract providers to adhere to in-plan reimbursement guidelines:

  • Reducing abusing practices of pharmacy manufacturers that have kept some generics out of the market and kept prices high;

  • Establish a new national entity to manage and produce transparent data on pricing, costs, and quality, so that patients can be encouraged to make better informed decisions about the care they receive;

  • Produce more data for patients so that they can better understand science-based realities of vaccines, factors associated with obesity and best practices for reducing health disparities.

  • Provide patients with increased access to their own electronic medical records. Require interoperability across health records systems. Require increased assurance of privacy.

The proposed bill is a long-awaited policy response to reasonable consumer complaints about being blindsided over surprise balance billing. For decades, and with increasing frequency, patients have learned that services like emergency services, pathology, and radiology services, received at an in-network or preferred provider institution were provided by contract providers who were not subject to the terms of the patient’s insurance policy.

“One of the most powerful parts of the proposed measure is a very comprehensive requirement that institutional hospital providers ensure that all of the services provided by and through them, even those under contract, such as ED, pathology, and radiology, are billed to insured patients under the same in-network contractual terms as the hospital’s own contract with the relevant third party,” says Jay Wolfson, DrPH, JD, distinguished service professor, Public Health, Medicine and Pharmacy, and senior associate dean, Morsani College of Medicine, University of South Florida Health. “This is a very explicit effort to stop what has become epidemic ‘surprise’ post-discharge billings that have placed huge burdens on insured patients, who had, in good faith-and in compliance with their insurance contract-sought care at an in-network institution.”

Related: Hospitals Charge Employer Plans Double What Medicare Pays

Surprise billing has meant that independent contract physicians and corporations could depend on exacting full charges from unsuspecting patients who presumed that all of their care at an in-network facility was subject the terms of their insurance policy, according to Wolfson.

“For patients, it should be a very welcome and rational change,” he says. “Sadly, insurance companies should have long ago taken the lead on these matters, requiring, as a matter of in-network contracts, that all of the institution’s clinical services, including those contracted, would be subject to the in-network payment provisions. If this legislation is successful-institutional executives will have to take on that responsibility.”

The proposed legislation also has very timely and important changes designed to stop pharmaceutical manufacturers from preventing lower cost generics or biosimilars from easily entering the market, according to Wolfson.

Transparency in pricing

Pricing transparency is another critical element of the proposed measure.

“The transparency provision would significantly increase administrative and accounting requirements plus negotiations between hospital administrators and insurance plans-e.g., bans on gag clauses, prevent ‘anti-tiering,’ ‘anti-steering,’ prevent ‘all or nothing’ clauses,” says G. William Hoagland, senior vice president of the Bipartisan Policy Center. “I see these provisions as possibly significantly increasing paper work and administrative costs.”

According to Wolfson, although transparency in pricing is a very important step in consumer education, a next step should be publication of quality and outcome data. “The creation of the proposed patient healthcare data corporation should afford a vehicle for acquisition, management and reporting of data to support increased transparency,” he says. “This will include data to support public health vaccination management and individual patient access to their own electronic health information.”

Healthcare executives should be interested and concerned about the proposed bill because it will require a big change in the contractual and clinical dynamics of care and services provide in and through their institutions, according to Wolfson.

“In some instances, hospital institutions have become partial flea markets, where many sub-contractors do business at their own stalls and are permitted to bill at their own rates through their own corporate systems,” he says. “There are, of course, delicate contractual provisions that protect the parties against Stark and other kickback violations. To the extent that the enforcement provisions are sufficiently powerful, the proposed legislation will certainly require express contractual language with contract providers-and the institutional entities will be held responsible for ensuring that the terms of the law are enforced. This may create conflicts with some contract providers who do not want some internal financial details revealed to their hospital ‘partners.’” 

 The Senate health committee is accepting comments at LowerHealthCareCosts@help.senate.gov on the discussion draft until June 5.