Hospital groups share concerns about Lower Health Care Costs Act

In a letter today to leaders of the Senate Health, Education, Labor and Pensions Committee, the AHA and five other national hospital groups said they agree with the need to protect American families from the problem of “surprise medical bills,” but have “serious concerns” with a provision of the Lower Health Care Costs Act (S.1895) that sets a benchmark rate in statute to resolve out-of-network payment disputes between providers and insurers, and with provisions that seek to change privately negotiated contracting arrangements between hospitals and insurers.
 
“We are concerned that the rate-setting provision of the legislation is a plan-determined, non-transparent process that will upend private payment negotiation,” wrote the AHA, America’s Essential Hospitals, Association of American Medical Colleges, Catholic Health Association of the United States, Children’s Hospital Association, and Federation of American Hospitals. “A default rate will become the payment ceiling and remove incentives for insurers to develop comprehensive networks, as there are already increasing numbers of narrow network products offered that exclude certain types of providers. If an insurer can pay the same rate to all out-of-network providers, why would they make the effort to develop robust in-network insurance products for their subscribers? Moreover, setting a payment rate is difficult to do properly in statute, even when a geographic adjustment is provided, given the many factors that are currently used to determine payment.”
 
The groups also urged the committee to remove the contracting provisions from the transparency section of the bill. “We believe these restrictions could lead to even more narrow networks with fewer provider choices for patients, while adversely affecting access to care at rural and community hospitals serving vulnerable communities,” they said.