NAHU Washington Update - 05/24/2019 (Plain Text Version)
In this issue:
Senate Committee Releases Draft Legislation to Require Broker-Compensation Disclosure
The legislation includes two provisions that are aimed at providing greater transparency of healthcare costs by disclosing broker compensation. The legislation would require health benefit brokers and consultants to...
Yesterday the Senate Health, Education, Labor and Pensions (HELP) Committee released discussion draft legislation aimed at reducing healthcare costs. The legislative effort is being led by Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA), who spearheaded previous market-stability proposals for which they received the 2018 NAHU Spirit of Independence Award. The draft legislation introduced this week is considerably more extensive than the earlier bipartisan healthcare efforts and addresses five core issues: ending surprise billing, reducing the prices of prescription drugs, creating more transparency to include health insurance agent and broker compensation, boosting public health and improving the exchange of health information technology.
The draft legislation includes two provisions that are aimed at providing greater transparency of healthcare costs by disclosing broker compensation. The legislation would require health benefit brokers and consultants to disclose to plan sponsors any direct or indirect compensation the brokers and consultants may receive for referral of services. This would be reported using a format similar to a 2007 proposed regulation by the Bush Administration for health and pension plan brokers. Further, the draft would require health benefit brokers to disclose to enrollees in the individual market any direct or indirect compensation the brokers may receive for referral of coverage.
The draft bill also includes a section with three options aimed at addressing surprise medical bills. The proposal calls for patients to be charged the same as if they received care in-network if a provider is out-of-network during an emergency or at an in-network facility. The first option for resolving payment disputes would be for in-network facilities to guarantee all providers as in-network; the second option would establish an independent arbitration system for bills over $750 and anything below would be based on contracted rates for the service area; and the third approach would simply pay the provider the median contract rate without going through arbitration.
As a discussion draft, it is not being formally introduced at this time, but is being shared with stakeholders for comment before any possible introduction. NAHU has been in close contact with staff of the HELP committee and will continue to work with them for favorable language in subsequent versions of the legislation. The committee is currently planning to revise the language over the next two weeks with comments on the draft due by June 5. The committee then plans to use these comments to shape an updated version that is expected to be released ahead of the July 4 holiday, which would be accompanied by a hearing. NAHU has worked closely with lawmakers on previous discussion draft legislation to ensure our concerns about the impact to agents, brokers, and your clients are heard and necessary changes are made. Last fall, NAHU specifically worked with members of the Senate Bipartisan Working Group on the discussion draft legislation that was later updated with our comments and released last week.
The Senate Bipartisan Working Group’s updated legislation was formally introduced last week and calls for implementing a baseball-style arbitration to settle surprise billing disputes. It followed discussion draft legislation introduced by leaders of the House Energy and Commerce Committee, and this week legislation was introduced by Representatives Joe Morelle (D-NY) and Van Taylor (R-TX) that is similar in scope to the Senate working group’s version and would provide for a baseball-style arbitration if providers and plans are unable to come to an agreement within 30-days of negotiations. Additionally, a bipartisan group of physician members of Congress released their own outline of ways to end surprise billing that would similarly lead to arbitration if plans and providers are unable to agree on a provider’s “commercially reasonable rate.”
As a market-stability effort, the draft proposal has largely been met with a tepid response, particularly among Democrats who have called out the Administration for further destabilizing the marketplaces with their rules on expanding the availability of Association Health Plans, short-term plans and HRAs. Senator Chris Murphy (D-CT) called the package “window dressing” that would do nothing to rollback these rules, while Senator Tammy Baldwin (D-WI) said that the time for passing these reforms was in 2017 as Congress has focused its healthcare efforts now on pharmaceutical pricing. Further, with the silver-loading of plans by insurers, the impact to subsidized consumers on the marketplace has been minimal, giving less incentive for lawmakers to negotiate on a package.
The Alexander-Murray proposal was first introduced in October 2017 with 22 bipartisan co-sponsors—11 Republicans and 11 Democrats, following the Republican repeal-replace efforts stalled in the wake of the Senate’s multiple failed attempts. Their proposal would have provided $10 billion a year for 2019, 2020 and 2021 for reinsurance and invisible high-risk pool programs, with a federal fallback in the first year, established through the ACA’s Section 1332 waiver program. They also sought more flexibility for health plan designs and streamlining the approvals process by allowing governors to apply for waivers and creating a fast-track process for waivers that already received approval through similar requests by other states. The Trump Administration ultimately opted to issue guidance giving themselves that authority, although it is currently being challenged and the House voted earlier this month to rescind the guidance.
The earlier Alexander-Murray package also sought to include language that would fund the cost-sharing reduction (CSR) program from October through December of 2017, for 2018 for plans that did not silver-load and Basic Health Plans, and for all plans for 2019, 2020 and 2021. After cutting the CSR program funding, the White House has repeatedly asked Congress to restore it through statute. The Administration acknowledged the significant increase in federal spending and increased insurance premiums caused by its decision to cancel payments in its repeated requests to restore funding. Finally, Alexander and Murray sought to include language that would establish a new catastrophic insurance plan at a “copper” metal level of 50% actuarial value.
Their market-stability proposal languished in late 2017 after a counter-proposal was offered by then-Senator Orrin Hatch (R-UT) and Representative Kevin Brady (R-TX). Both would have temporarily funded the ACA’s cost-sharing reduction (CSR) program, but with very different tradeoffs. The Alexander-Murray plan seeks Republicans support by offering additional state flexibility, while the Hatch-Brady plan would temporarily eliminate the ACA’s mandate penalties. Another factor complicating the Alexander-Murray passage was the often conflicting messages coming from the White House, and most notably from President Trump who would both support and oppose the package, often in the same press conferences or statements, making it difficult for members of Congress to determine if it was worth their efforts to support the measure if it was never to be considered by the president.