By Newt Gingrich

Senate HELP Committee Should Pass Lower Health Care Costs Act

Senator Lamar Alexander’s leadership in the Senate has produced the best opportunity for bipartisan legislative progress in health care before the 2020 election.

The Lower Health Care Costs Act is a bipartisan package of common sense reforms which fix some of the most frustrating features of the current health system.

It tackles surprise medical bills by ensuring emergency services, including air ambulances, are always considered in network and count toward a patient’s deductible. It also holds patients harmless from surprise medical bills which occur when a patient chooses an in-network hospital but is then treated by an out of network specialty physician who works at the hospital.

The bill also increases access to lower cost generic medicines by speeding up the application and approval process at the FDA. It does so by addressing many of the regulatory choke points which can be manipulated to delay approval of generic drugs and clarifies many rules which have caused confusion and delays. Most notably, the bill makes a category change to insulin which will enable more generic options to be made available.

The bill also has several measures to increase transparency in health care.

A recent Wall Street Journal article detailed how secret deals between hospitals and insurers can reduce competition and drive up the cost of health care. The package of reforms prevents many of these arrangements, including anti-tiering and anti-steering clauses that prevent insurers from sending patients to lower cost or higher quality facilities for certain procedures. It also requires health insurance brokers to disclose if they are receiving payment from insurance companies.

The bill also bans so-called gag clauses that prevent patients and plan sponsors from accessing cost and quality data on health care procedures. This is particularly important for companies who pay directly for their employees’ health care (self-insuring) but pay an insurance company for access to their network and to process the claims. Currently, many insurers will simply draw down on employers’ bank accounts for the costs of the care but refuse to share the claims data because it would reveal the insurer’s negotiated rates with providers – which they consider a trade secret. The bill would require insurers to share de-identified claims data with plan sponsors if they request it, so they can better assess whether they are getting a good deal on their employees’ health care.

There are a few items of concern in the bill which should be addressed.

For instance, the bill creates an all claims payer database (ACPD) to be operated by a nonprofit. The entity would collect all claims data from government programs, state-based ACPDs, and self-insured health plans, and make it available in bulk form stripped of identifiable patient data.

There is no doubt that a national level APCD would be helpful for researchers and policymakers, as well as self-insuring employers who would benefit from seeing what providers are charging. However, the proposal raises a fundamental issue. This sort of aggregate data has real economic value. Mandating that it be turned over is essentially a forced transfer of an asset. Many left-wing health care efforts, from Hillarycare to one of the recent Medicare for All bills, have called for the creation of an APCD. So, Senators will need to consider if the good an APCD can do is worth the precedent it creates.

In addition, a centralized location for all this data is an inviting target for hackers. To fix this, senators should consider making it the responsibility of the submitting parties to eliminate the personally identifiable information rather than relying on the entity maintaining the database to strip it out when claims data requests are made. This way all the private patient data is never held in one place.

These concerns notwithstanding, the Lower Health Care Costs Act is worthy of the support of the HELP Committee, which is scheduled to mark it up today before sending it to the full Senate. It is critical that a bipartisan package stay on schedule so it can be sent to the House by this fall. Additional changes can be made before a full vote of the Senate.

If Senators McConnell and Alexander can get the bill passed, Nancy Pelosi will be forced into a difficult situation. If she allows a vote on the bill, it would almost certainly pass and give President Trump a big health care win. If she blocks the vote, it expose the priorities of House Democrats – hurting President Trump even if it means denying the American people relief from surprise medical bills and high prescription drug costs.