Providers and payers identified some areas of agreement, including the need for policies that bolster competition in pharmaceuticals.


Jan. 29—Hospital and insurer advocates urged the Trump administration to take differing approaches in its quest to increase competition in health care.

On Oct. 12, 2017, President Donald Trump signed an executive order that aimed to “promote healthcare choice and competition across the United States.” As part of the implementation of that order, the U.S. Department of Health and Human Services (HHS) issued a request for information (RFI) on state and federal laws, regulations, guidance, requirements, and policies that may discourage high‐quality care at affordable prices and competition in healthcare markets, and lead to “excessive consolidation throughout the healthcare system.”

Among the first steps that hospital and insurer stakeholders urged were those that could prevent mergers and acquisitions among the other group.

For instance, the American Hospital Association (AHA) urged HHS to take a more active role in assisting federal antitrust agencies in evaluating the impact of health insurance deals on Medicare and Medicare Advantage (MA) patients.

Such steps are needed, according to an AHA letter, to reverse the increasing lack of insurer competition, as seen in an American Medical Association annual analysis that studied 389 markets and found that 69 percent were highly concentrated.

In contrast, America’s Health Insurance Plans (AHIP) urged in a letter that HHS devote more resources to “stopping anticompetitive provider consolidation before it happens.”

The extent that provider consolidation poses a problem, according to AHIP, is seen in the organization’s research findings that ownership of provider groups by local hospitals or multihospital health systems resulted in per patient expenditures that were 10 percent to 20 percent higher than for patients seen at independently owned groups. The insurer call for action came as a new report from Kaufman Hall found hospital and health system transactions announced in 2017 totaled 115, an increase of 13 percent over 2016 and the highest number recorded in recent history.

Instead of greater scrutiny, the answer to promoting competition is more allowance of innovative provider partnerships, according to the Association of American Medical Colleges (AAMC). To facilitate coordinated care and promote cost reductions, the advocacy group for nearly 400 teaching hospitals and health systems urged the Centers for Medicare & Medicaid Services (CMS) to create new exceptions or safe harbors from the Stark and Anti-Kickback laws.  

“Provisions in these laws present significant barriers to clinical and financial integration aimed at improving the quality of care, population health, and reducing costs,” Janis Orlowski, MD, chief health care officer for AAMC, wrote in comments to HHS.

Network Adequacy Concerns

Insurer and hospital advocates also clashed over the issue of provider network adequacy in health plans.

For instance, AHA urged new requirements for managed care plans to periodically update their directories by proactively reaching out to the providers in their network to confirm the listed information.

In contrast, AHIP urged HHS to keep network adequacy standards at the state level when possible.

“This allows states to promote approaches adequately responsive to local markets, rather than a one-size-fits-all approach,” AHIP wrote.

The issue of network adequacy, according to AHIP, is especially important in rural areas, which can be difficult to provide coverage for in a way that promotes competition and choice. The organization urged that plans in rural areas be allowed to direct non-emergency care to the nearest urban area even when the distance exceeds typical time and distance standards.

Areas of Agreement

Insurer and hospital advocates found agreement in several areas, including the need for support of the individual-insurance market and telehealth.

The RFI specifically cited concerns over the decrease in insurer participation in the Affordable Care Act’s marketplaces from 167 in 2017 to 132 in 2018.

AHIP warned against policies that decrease the number of shoppers in the individual-insurance marketplaces, such as those that draw healthy consumers away. One way that could happen is through a proliferation of association health plans, which the administration has said it plans to promote.

AHA also urged a range of steps to bolster the ACA marketplaces, including by providing cost-sharing reduction subsidies to reduce premiums, creating a federal reinsurance program, and ensuring that the federal risk-adjustment program does not decrease competition and choice by disadvantaging smaller plans and new entrants.

Regarding telehealth, insurer advocates urged the revision of network adequacy requirements in Medicare and Medicaid to improve access. Among its proposals, AHIP recommended that CMS interpret the use of telehealth as a mode of delivering the basic healthcare benefits covered under the Medicare fee-for-service (FFS) program, which would expand the ability of Medicare Advantage plans to cover such services.

The AHA said Congress needs to take several steps to expand telehealth, including removal of Medicare restrictions. For instance, Medicare needs to eliminate geographic and setting requirements so patients outside of rural areas can benefit from telehealth.

Providers and payers also agreed that federal policymakers need to concentrate on increasing competition in pharmaceuticals.

During the swearing in this week for the recently confirmed secretary of HHS, Alex Azar, Trump specifically urged action on drug prices.

“We have to get the prices of prescription drugs way down and unravel the tangled web of special interests that are driving prices up for medicine and really hurting patients,” Trump said at the event.

Among the steps recommended by AHA was more funding for Food and Drug Administration reviews and approvals of generic drugs and biosimilars, and fast-tracking of generic applications when no or limited generic competition exists.

AHIP also urged that drug-pricing transparency be required.

“Nearly all other participants in the health care sector have to be accountable for their prices and actions, and drug manufacturers should not continue to be exempt from that fundamental rule,” AHIP wrote.

The insurer advocate urged that manufacturers be required to disclose information during the approval process on the intended launch price, the use of the drug, and direct and indirect research-and-development costs.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare 

Publication Date: Monday, January 29, 2018