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Trump Administration Holds Comment Period on Two CMS Rule Changes

May 3, 2019

In May, the Trump administration will be wrapping up comment periods for two consumer-oriented initiatives reforming the way health insurance operates with providers and across state lines.

             On March 11, CMS posted notification for comment on a proposed rule that would allow health insurance companies to sell policies across state lines. This measure and the contract transparency plan are outcomes of President Donald Trump’s Executive Order 13813, issued October 2017, “Promoting Healthcare Choice and Competition Across the United States.” The order called for the Trump administration to use its regulatory powers to lower prices and improve access by increasing competition and giving consumers more choices.

             On March 4, the Centers for Medicare and Medicaid Services (CMS) posted notification of a patient data access rule that includes a measure preventing health care providers “from inappropriately restricting the flow of information to other health care providers and payers.” Contracts between providers and payers are closely held agreements that traditionally have been confidential.

Obamacare Impediments

The rule changes have some hurdles to cross before they can have the desired impact on health care costs and access, says Lindsey Killeen, vice-president for strategic outreach and communications at The Mackinac Center for Public Policy. For cross-state insurance sales to make a big impact, Congress must allow more freedom to buy policies that do not offer all of the “essential health benefits” (EHBs) required by the Affordable Care Act, says Killeen.

                “The current EHB requirements have driven up costs and limit the choices that consumers have between prices and benefit packages when shopping between insurance carriers,” said Killeen. “Until insurers can begin offering greater variation in their plans—meaning, until EHB requirements are reformed—there is little incentive to the insurer or to the consumer to invest in cross-state insurance sales.”

Need for Interstate Agreements

In addition to Congress easing Obamacare restrictions—which is not likely in the foreseeable future with a divided Congress—states have been slow about fostering interstate health insurance sales, says Killeen.

            “Several states have had laws in place allowing them to form compacts with other states for the sale of health insurance across state lines,” Killeen said. “Despite these laws, there has been no meaningful activity between states and insurers to make use of this option. This is largely because the cost of compliance with state regulations varies and requires additional financial investments from insurance carriers to establish business in multiple states.

        “Without the ability to offer mandate-light plans and other variations in benefit packages that would otherwise drive greater consumer demand, there is little incentive for insurance companies to make these investments,” Killeen said.

               Killeen says the comment period is important. “States need to let CMS know their interest in broadening health insurance sales and to align more closely to the Administration’s other initiatives, such as broadening access to short-term and association-based health plans.”

Transparency Snags

In a similar effort to improve access and help Americans “make better informed choices” as Executive Order 13813 states, the administration is proposing to make transparent the price deals between providers and third-party payers.

               Described in one sentence under the subtitle “clinicians and hospitals,” the administration states, “We are also proposing policies to prevent health care providers from inappropriately restricting the flow of information to other health care providers and payers.” 

              Dr. Don Rucker, national coordinator for health information technology at the Department of Health and Human Services told the Wall Street Journal March 7, “It’s an effort by the president to help put Americans back in control of price data.”

             Michael Cannon, director of health policy studies at the Cato Institute, says he’s not sure it will work out that way.

                  “Insurance companies will have a hard time excluding providers if they all of a sudden learn the provider cut a better deal with another insurer,” said Cannon. “If a provider is cut, the consumer won’t view it in sympathetic terms; they’ll just see it as restricted access. They’ll rebel, and that constrains the insurer’s ability to say no.  In a thirty-party payer system, if consumers don’t care about costs, transparency means nothing.”

            The 28-day comment period for the price transparency rule ends May 3, and May 6 for the rule on cross-state border health insurance sales.

AnneMarie Schieber (amschieber@heartland.org)is the Managing Editor of Health Care News.

Author
AnneMarie Schieber is a research fellow at The Heartland Institute and managing editor of Health Care News, Heartland's monthly newspaper for health care reform.
amschieber@heartland.org @HCPolicy