Anticompetitive Health Plan Contracts
This model legislation prohibits anticompetitive contract clauses that dominant health care systems may demand in contracts with health insurers to increase prices and thwart cost-containment efforts. The model specifically prohibits four common anticompetitive contract provisions that health systems have used in consolidated markets: (1) all-or-nothing contracting; (2) anti-tiering or anti-steering clauses; (3) most-favored-nation clauses; and (4) gag clauses. To create a more level playing field for negotiations to lower hospital costs, this model bans anticompetitive contract terms using states’ consumer protection and antitrust laws.
NASHP Report: A Tool for States to Address Health Care Consolidation: Prohibiting Anticompetitive Health Plan Contracts, April 2021. This report describes how consolidated systems use anticompetitive contract terms to charge supracompetitive prices and explains how the model act can give states essential tools to combat these terms and rein in rising health care costs.
Using Insurance Rate Review to Control Costs
For over a decade, Rhode Island has used its health insurance rate review authority to constrain the growth of hospital prices to the rate of inflation plus 1 percent. Other states are moving to implement similar strategies that give the insurance commissioner the authority to enforce affordability standards as part of the health insurance rate review process. This model allows the insurance commissioner to condition health insurance rate approval on carriers’ limiting the rate of hospital cost growth.
NASHP Report: NASHP Toolkit for Assessing and Enacting Health Insurance Rate Review Authority to Control Health Care Costs, June 2021. This toolkit allows states to assess their existing health insurance rate review laws for the authority to regulate hospital cost growth and proposes model statutory and regulatory text to condition health insurance rate approval on meeting affordability standards in hospital cost growth.
Insurance Rate Review as a Hospital Cost Containment Tool: Rhode Island’s Experience, February 2021. This blog provides background on how Rhode Island used affordability standards in insurance rate review to control hospital cost growth.
Hospital Financial Transparency
NASHP’s model legislation identifies what data must be collected, which hospital documents should be used to obtain the information, and underscores that a state agency or office must be responsible for analyzing the data. NASHP also provides a reporting template to help states implement the law and collect the information needed to evaluate the vitality of a state’s hospitals.
Model Legislation: Model Act to Ensure Financial Transparency in [Name of State]’s Hospitals and Health Care Systems, August 2020.
Model Reporting Template: Hospital Financial Transparency Report Template, August 2020. Download this reporting template to use or adapt to capture the necessary data to implement the hospital financial transparency law.
The Access Project: A Community Leader’s Guide to Hospital Finance, 2020. This report, prepared by Sarah Gunther Lane, MS, Elizabeth Longstreth, BA, Victoria Nixon, MS, and Nancy Kane, DBA, provides an overview of the key questions policymakers can ask to understand hospital financial performance, including background on hospital revenues and expenses, sources of financial information, and evaluations of financial health.
The act requires annual reporting of facility fees charged or billed by health care providers, delegates implementation authority to a relevant state agency, and provides three enforcement mechanisms:
- An annual facility fee audit by the relevant state agency;
- A private right of action for consumers; and
- Administrative financial penalties against health care providers for violations.
State Policies to Address Vertical Consolidation in Health Care, August 2020. This report by Erin Fuse Brown, JD, MPH, explores the increased financial pressure for vertical consolidation, its financial impact on states and consumers, and what policies states can implement to address the coming wave of vertical health care consolidations.
Combat Rising Health Care Costs by Limiting Facility Fees with New NASHP Model Law, August 2020. This blog explains how prohibiting site-specific facility fees and requiring annual reporting of facility fees can lower health system costs.
State Purchasing Pool Buy-in
Q&A: Prescription Drug State Purchasing Pools and Buy-in, January 2020.
NASHP Proposal for a State Purchasing Pool for Prescription Drugs, October 2019. This white paper provides a roadmap to help states navigate legal issues and implement a state purchasing pool.
Model Pharmacy Benefit Manager Contract Terms Help States Achieve Prescription Drug Savings, January 2020. This blog explains how establishing favorable PBM contract terms can be a state’s first step toward leveraging additional savings through a second strategy – implementing a state purchasing pool for prescription drugs.
Improved Oversight of Provider Mergers
This model legislation grants state attorneys general and state health officials with overarching authority on cost, like a health cost commission, the authority to review, place conditions upon, and block potentially harmful consolidation of health care providers in their state. It creates a comprehensive review process for transactions with the potential to reduce access, increase costs, or that are otherwise not in the public interest. The model addresses gaps in federal antitrust enforcement because it would require state review of health care transactions at values below the Hart-Scott-Rodino Act threshold and apply to all types of consolidation, including horizontal, vertical, or cross-market.
Explore the latest state legislative action to lower health system costs.