Analysis: Another week, another draft surprise bill legislative proposal

Congressional Quarterly reported that Health, Education, Labor and Pensions (HELP) Chairman Lamar Alexander, (R-Tenn.), and ranking member  Patty Murray, (D-Wash.), released a draft bill, the Lower Cost Health Care Act, on May 23 “targeting five areas: banning surprise medical bills; speeding low-cost generic drugs to market; increasing transparency; improving public health and enhancing health information technology. The bill proposes three options related to surprise bills.”

The Congressional Quarterly article went on to say “The first option would require an in-network facility to guarantee to patients and health plans that all individual providers there be considered in network. Another option is arbitration, so that for all surprise bills over $750, the payer and provider could give their best offers to an independent judge for dispute resolution. Under the third, the payer would reimburse the provider or facility at the median rate for a service in a certain geographic area.” 

Although the draft legislation is getting most of its press for provisions addressing drug costs and surprise bills, which are two key areas of public concern, it has a section dedicated to increasing the price transparency for healthcare services. Among other things, the transparency provisions would:

• Ban gag clauses in contracts between providers and health plans that prevent enrollees, plan sponsors or referring providers from seeing cost and quality data on providers.
• Prevent “anti-tiering” and “anti-steering” clauses in contracts between providers and health plans that restrict the plan from directing or incentivizing patients to use specific providers and facilities with higher quality and lower prices.
• Prevent “all-or-nothing” clauses in contracts between providers and health plans that require health insurance plans to contract with all providers in a system or none of them.
• Prevent “most-favored-nation” clauses in contracts between providers and health plans that protect an insurance company’s dominant position in a market by requiring that the insurance company be given the most favorable pricing of any health plan in the market. 
• Require all bills to be sent to a patient within 30 business days. If bills are received more than 30 days after receiving care, the patient is not obligated to pay.
• Require providers and health plans to give patients good faith estimates of their expected out-of-pocket costs for specific healthcare services, and any other services that could reasonably be provided, within 48 hours of a request.

Takeaway

The draft HELP legislation’s price transparency provisions related to “gag,” “anti-tiering,” “all-or-nothing” and “most favored nation” clauses are probably better thought of as individual and group market managed care contracting provisions. There’s something in there for everyone to like (or dislike, depending on your perspective). 

Plans will strongly support the anti-tiering and all-or-nothing provisions. While providers and hospitals will support the most-favored nations provision. Neither will like the gag clause provisions. 

While I still think we will see some transparency provisions in a final bill, my guess is the provisions won’t be as expansive as this. It will probably be something along the line of a requirement for plans and providers to provide good faith out-of-pocket cost estimates, which is in line with HFMA’s Price Transparency Taskforce Report. 

What is missed in this bill is the opportunity to really bend the cost curve as was the original intent of the bill. While the price transparency and surprise bill elements are a step in that direction, it might be fair to call this a missed opportunity. 

Senator Alexander received over 400 responses to his request for cost control ideas, including one from HFMA. Unfortunately, the HELP bill is relatively narrowly focused. And by taking a narrow approach, left on the curb was an opportunity to accelerate the spread of APMs by revisiting antiquated fraud and abuse laws and requiring the implementation of APMs in Federal Employees Health Benefit Plan offerings. As we’ve seen from a recently released survey from the AMGA, APM penetration in commercial plans lags. 

Senator Alexander intends to bring the package to the Senate floor sometime this summer, with July the targeted date.