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Grassley asks FTC to review hospitals' contracts with health plans

Senate Judiciary Chair Charles Grassley (R-Iowa) on Wednesday asked the Federal Trade Commission to investigate major health systems' potentially anti-competitive contracts with insurers. The senator questioned whether these contracts are a driver of spiking healthcare costs.

Citing a September report from the Wall Street Journal, Grassley urged FTC Chair Joseph Simons to give the agency's perspective on whether secretive inter-industry ties are exacerbating rising healthcare costs. In 2016, healthcare accounted for nearly one-fifth of the U.S. gross domestic product, or about $3.3 trillion.

"Spending is projected to grow at an average rate of 5.5% per year and reach $5.7 trillion by 2026," Grassley wrote. "The last thing American patients and consumers need at this time is a healthcare system that permits or encourages anti-competitive agreements that hinder access to lower cost care."

The Wall Street Journal article detailed hidden financial arrangements between hospital systems and insurers that included limitations on coverage offered by the plans to their enrollees, which in turn would save the hospitals money. Systems named in the story included Johns Hopkins Medicine in Maryland, OhioHealth system and Aurora Health Care in Milwaukee.

Some dominant health systems prohibit insurers from selling any plan that excludes the hospital from the network, or require the insurers to design plans aimed at discouraging enrollees' use of less expensive providers.

"Other terms allow hospitals to mask prices from consumers, limit audits of claims, add extra fees and block efforts to exclude healthcare providers based on quality or cost," the article stated.

Health systems are coming under increasing scrutiny in Congress for their roles in rising health costs.

In August, House Republican leaders of the Energy & Commerce Committee launched an investigative quest on hospital consolidation, calling on congressional Medicare advisors to analyze federal policies for ways they might be speeding hospital consolidations, as well as the implications of those consolidations on the healthcare pricing.

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http://www.modernhealthcare.com/article/20181010/NEWS/181019979