Lawmakers Ponder Regulations For Healthcare Negotiations
HARTFORD, CT — Unable to pinpoint why healthcare providers and insurers couldn’t agree on how much to pay for medical care, legislators debated Tuesday whether the state needs to get involved in future negotiations between providers and insurers.
At Tuesday’s public hearing before the Insurance and Real Estate Committee, Hartford Healthcare and Anthem Blue Cross and Blue Shield both apologized for the length of their contract dispute, but they were unable to say exactly why it lasted as long as it did. Both parties said they were still analyzing what went wrong and what they can do in the future to avoid another disruption in service.
The two companies were unable to agree on what Anthem would reimburse Hartford Healthcare for the services provided to their shared consumers. The seven week stalemate, which ended Nov. 18, left tens of thousands of patients to face out-of-network rates for care. This forced them to make tough decisions such as rescheduling surgeries, postponing treatment, or finding another provider. The latter was likely difficult since Hartford Healthcare includes doctors at numerous facilities in the area.
“It wasn’t like we ran out of time,” said Dr. James Cardon, executive vice president of Integrated Care for Hartford Healthcare. “It was a fundamental difference in position that we couldn’t reconcile with each other.”
Deremius Williams, vice president of provider relations for Anthem, said this is the first time they’ve had disruption of this magnitude.
She described the length of the contract impasse as “rare.”
Anthem was unable to reach an agreement three years ago with the Connecticut Children’s Medical Center, but they were able to agree to extend the old contract until they could come up with new terms. That didn’t happen this time with Hartford Healthcare.
Hartford Healthcare refused to extend the contract terms past the expiration of their agreement Sept. 30. Cardon said it would have been “fiscally irresponsible” to do that since it would have have profound implications on their performance.
“Negotiations by their nature don’t always go smoothly, but they are necessary to ensure that both parties, providers and payers, can remain financially viable,” Cardon said.
He opined that no one but the negotiating parties are better situated to understand the business needs of their organizations.
But lawmakers wanted to know if there was something they could do to help avoid similar situations in the future.
The contract for Yale-New Haven Healthcare and Anthem is up next year and Rep. Sean Scanlon, D-Guilford, said he would like to avoid a repeat of the Hartford Healthcare-Anthem breakdown.
Senate President Martin Looney, D-New Haven, said since 2015 he’s been proposing legislation that would require binding arbitration between hospitals and insurance carriers if they’re unable to resolve their differences.
Looney said year-after-year the proposals have been opposed by both the hospitals and the insurance carriers, but he believes the recent events merit a closer look. He said both engage in brinkmanship and the patient gets caught in the middle.
State Comptroller Kevin Lembo, who administers the state employee and retiree health care system, agrees.
Lembo said they are likely to see “more, not less of this,” and that the time has come for statewide protections of consumers who are caught in the middle.
He urged lawmakers to think of the market as more of a “utility” that’s regulated rather than a regular marketplace responding to economic conditions.
Lembo also said there needs a be a “pressure point” in those economic disputes and the state should step in and provide that.
State Sen. Kevin Kelly, R-Shelton, said he doesn’t believe getting more government involved will help the situation.
Rep. Rob Sampson, R-Wolcott, said he thinks negotiations between healthcare providers and carriers shouldn’t involve the government.
“That’s between you folks,” Sampson said.
Insurance Commissioner Katharine Wade warned that while some of the solutions being offered might sound good, they could also drive up the cost of healthcare for consumers.
“Two private parties have to be able to enter into contract negotiations,” Wade said. “Some of the proposals being offered could have the unintentional consequences of raising prices.”