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Should FTC Examine Contracts Between Hospitals, Insurers?

Analysis  |  By Steven Porter  
   October 12, 2018

A high-ranking Republican senator has asked federal antitrust regulators to review such contracts and offer insight to lawmakers.

Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, asked the Federal Trade Commission to conduct a formal review of contracts between health insurers and hospitals, citing concerns that the often-opaque agreements could be harming consumers by undermining competition.

Grassley made the request Wednesday in a letter to FTC Chairman Joseph Simons, quoting directly from a September report by The Wall Street Journal's Anna Wilde Matthews.

"Dominant hospital systems use an array of secret contract terms to protect their turf and block efforts to curb health-care costs," Wilde Matthews reported. "As part of these deals, hospitals can demand insurers include them in every plan and discourage use of less-expensive rivals. Other terms allow hospitals to mask prices from consumers, limit audits of claims, add extra fees and block efforts to exclude health-care providers based on quality or cost."

The report named several prominent providers, including Johns Hopkins Medicine, OhioHealth, Aurora Health Care, and HCA Healthcare, as having contracts with provisions that restrict how insurers can design their plans.

"If true, these practices undermine Congress's efforts to lower the cost of, and increase access to, health care for millions across the country," Grassley wrote in his letter.

"The last thing American patients and consumers need at this time is a health care system that permits or encourages anticompetitive agreements that hinder access to lower cost care," he wrote.

"It is critical for Congress to understand the FTC's perspective on these issues, including whether contractual provisions—like those highlighted in recent reports—impact the cost of health care in the United States and whether consolidation in the marketplace magnifies the impact of such provisions," Grassley added.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.

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