Testimony of Christine H. Monahan, J.D., earlier than the U.S. Home of Representatives Training & Workforce Well being Subcommittee, June 21, 2023.
Good morning Chairman Good, Rating Member DeSaulnier, and members of the Subcommittee on Well being, Employment, Labor, and Pensions.
My identify is Christine H. Monahan and I’m an Assistant Analysis Professor on the Middle on Well being Insurance coverage Reforms inside Georgetown College’s McCourt College of Public Coverage. I’m honored to testify at the moment relating to competitors and transparency in our well being care markets.
Consolidation within the U.S. well being care system is rising, to the detriment of everybody who makes use of and pays for well being care. In each the supplier and insurer markets, we’ve got seen vital horizontal and vertical consolidation over the previous decade contributing to rising costs for well being care.
The enlargement of enormous well being techniques, with a number of hospitals, outpatient departments, and doctor practices underneath the identical possession, has been considerably rising what business insurers – and, finally shoppers and employers – pay for care. One egregious instance of that is the addition of outpatient facility charge expenses to well being care companies that may be safely and successfully supplied exterior of a hospital. These expenses usually come as a shock to sufferers who go in for a routine physician’s go to and so they can result in considerably increased out-of-pocket prices than shoppers have historically paid for such care.
Some states, from Connecticut, to Maine, to Indiana, have began to sort out this concern by prohibiting these expenses in sure circumstances, and a handful of personal insurers and at the very least one state worker well being plan have additionally taken steps to restrict these expenses and shield shoppers from these payments. One problem to focusing on and implementing these reforms, nonetheless, is a scarcity of transparency within the claims suppliers undergo insurers, which may obscure the place care was really supplied.
For instance, a state or insurer might need to finish hospital facility charge expenses for care supplied in off-campus departments or doctor places of work, since this care inherently doesn’t must be supplied in a hospital-setting. However all the claims from a well being system might appear like they’re coming from the principle campus of the hospital.
There are easy reforms the federal authorities can take to handle this concern, and set the stage for added motion to restrict what business insurers pay for care in these circumstances and finally transfer in direction of web site impartial funds, as we’re seeing in Medicare. These reforms embrace requiring that every separate facility or workplace the place care is supplied, like a hospital off-campus division, purchase a novel nationwide supplier identifier or NPI and that each the hospital and all well being care practitioners embrace this NPI on their claims for any care they supply there. This is able to give insurers, in addition to regulators and policymakers counting on claims information, a a lot better sense of who’s charging outpatient facility charges and after they’re charging them and take applicable motion. Extra broadly, it will additionally enable insurers to higher tailor different reimbursement choices primarily based on the situation of care, contemplating components like high quality and price.
Let’s not be naïve about how far relying solely on non-public insurers to comprise prices will get us, nonetheless. They, too, have consolidated horizontally and vertically, and it’s usually of their curiosity to not pushback strongly towards supplier costs. This can be as a result of the suppliers charging the best charges are thought-about “must-have” suppliers for his or her networks, or these suppliers have demanded that the insurer embrace anticompetitive clauses of their contracts. However the main insurers even have little incentive to make use of what negotiating energy they do have.
It is a specific downside within the employer-sponsored insurance coverage market, nearly all of which is insured by way of self-funded well being plans with the key insurers serving as third-party directors (or TPAs). On this position, the insurers have little incentive to barter aggressive supplier reimbursement charges because of their relative market energy and data monopoly vis-à-vis employers. What’s extra, employer contracts with TPAs and pharmacy profit managers (or PBMs) are sometimes rife with hidden charges and overpayments, whereas the consultants and brokers employers rent to assist prepare their contracts are taking in huge commissions.
That is all occurring although employers, as plan sponsors, have a authorized responsibility underneath ERISA to behave solely within the curiosity of plan members and to make sure they’re paying cheap compensation to service suppliers, and no extra. Fortunately, the employer neighborhood is beginning to awaken to those issues, due largely to latest efforts by Congress and the Govt Department to deliver extra transparency to our well being care system.
However extra nonetheless must be achieved to present employers the data they should change into extra prudent purchasers on this system. This consists of codifying and strengthening federal worth transparency guidelines; revisiting the Consolidated Appropriation Act’s ban on gag clauses; and clarifying and increasing service supplier disclosure necessities. Given their vital position and energy within the system, additionally it is value exploring whether or not entities like TPAs and PBMs themselves ought to be handled as plan fiduciaries when performing features the place it’s extra essential that they act in the perfect curiosity of plan members than their very own enterprise pursuits.
Thanks on your time. I welcome your questions.
You’ll be able to learn Ms. Monahan’s full testimony right here. A webcast of her testimony is obtainable right here.
