AAOS Now

Published 6/1/2011
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Simit Pandya

Is a provider antitrust exemption possible?

Federal antitrust regulations not only cover the country’s largest corporations, they also apply to the healthcare sector. But while current law does not allow healthcare providers to work together to pursue fair reimbursement rates from health insurance plans, health insurers enjoy broad exemptions under the McCarran-Ferguson Act of 1945. As a result, current antitrust enforcement policies and recent healthcare industry consolidations have enabled a few health plans to dominate local healthcare markets and unilaterally set provider reimbursement rates.

This inequity allows insurers to achieve overwhelming market power and subsequently impose one-sided, non-negotiated contracts onto physicians.

But finally, orthopaedic surgeons and other healthcare providers have some hope for relief. HR 1409, also known as the Quality Healthcare Coalition Act of 2011, was introduced by Rep. John Conyers (D–Mich.) on April 7, 2011, and was subsequently referred to the House Judiciary Committee for further consideration.

HR 1409 stipulates that “healthcare professionals who are engaged in negotiations with a health plan regarding the terms of any contract under which the professionals provide healthcare items or services for which benefits are provided under such plan shall, in connection with such negotiations, be exempt from the Federal antitrust laws.”

The passage of HR 1409 will benefit physicians, patients, and the nation’s entire healthcare system in several ways. First, it will enable physicians to negotiate fair reimbursement rates from insurers without fear of violating federal antitrust laws. Second, physicians’ ability to negotiate fairer contracts will better enable them to deliver high-quality health services and protect patient safety. Third, this bill will expand the public’s access to care by attracting a new generation of qualified clinicians to replace a dwindling healthcare workforce. Finally, the passage of this bill will protect physicians who intend to work with other healthcare providers to provide integrated healthcare services as part of future private accountable care organizations.

The American Association of Orthopaedic Surgeons (AAOS) has been working with public and private partners to build bipartisan support for this important piece of legislation. Rep. Conyers has proven to be a stalwart champion of antitrust reform since he addressed the members of the Board of Councilors and Board of Specialty Societies at the 2010 Fall Meeting. In recent weeks, Reps. Ron Paul (R–Texas), Donna Edwards (D–Md.), and Jeff Miller (R–Fla.) have signed on as cosponsors.

The bill’s prospects of passage remain unclear, and previous attempts to pass antitrust reform failed to gain much momentum. However, the increased bipartisan support may signal more hopeful prospects for this bill. The AAOS believes that much of this bill’s success depends on how the medical community galvanizes its members and allies in support of antitrust reform.

For more information, please contact Simit Pandya at pandya@aaos.org

Simit Pandya is the orthopaedic quality institute specialist in the AAOS office of government relations.