Lawmakers decided to eliminate provisions from an end-of-year proposal that would have prohibited anticompetitive healthcare contracting practices.
Congress' end-of-year spending legislation is still in flux, but eight lawmakers that lead key committees didn't ask to curb gag clauses or various types of clauses that would make it difficult for plans to steer consumers to lower-cost or higher-quality providers.
The practices targeted in a prior bipartisan healthcare reform package titled the Lower Health Care Costs Act are widespread, but have gained renewed attention since California Attorney General Xavier Becerra was chosen as President-elect Joe Biden's nominee for HHS secretary. Becerra sued Sutter Health for anticompetitive practices similar to those the legislation was designed to stop.
The prior legislation would have prohibited so-called gag clauses in contracts that prevent plan sponsors, enrollees or referring providers from seeing cost and quality data. It would also have barred various types of contract clauses that make it difficult or impossible for employers and plans to steer enrollees to lower-cost or high-quality providers. They include anti-tiering, all-or-nothing, and most-favored nation clauses.
Hospitals had asked that the provisions be removed, and applauded lawmakers for leaving them out of an end-of-year surprise billing package.
"We also would like to commend you for not including in the legislation certain provisions extraneous to the surprise medical billing issue, such as those related to privately negotiated contracts, which would lead to narrower provider networks with fewer choices for patients," the American Hospital Association wrote to lawmakers on Sunday.
Employers have been lobbying to ensure the contracting provisions make it in a final package. James Gelfand, senior vice president for health policy at the ERISA Industry Committee, said the contracting provisions raise revenue and have wide bipartisan consensus and should be passed even if surprise billing legislation ultimately fails.
"It would be crazy to throw out the baby with the bathwater," Gelfand said.
The Congressional Budget Office estimated that the contracting provisions would lower premiums and raise $1.1 billion in revenue for the federal government over 10 years. The impacts would be felt more in markets with a dominant but non-monopolistic health system and no single dominant insurer, analysts wrote.
Elizabeth Mitchell, president and CEO of the Pacific Business Group on Health, said companies that leverage the tactics to make more money are resistent to the policy.
"We believe in the market. Yet the market is so distorted, with so little transparency and oversight, that it really makes it difficult for anyone to purchase healthcare," Mitchell said.
Lawmakers are negotiating a COVID-19 relief package and omnibus appropriations bill ahead of a deadline on Friday to fund the federal government.
