Competitive Health Insurance Reform Act

Competitive Health Insurance Reform Act

The American Chiropractic Association (ACA) applauds Congress for passing legislation that will promote fair competition in health insurance markets with the removal of a 75-year-old exemption that allowed these companies to avoid federal antitrust laws. The Competitive Health Insurance Reform Act (H.R. 1418) passed the House of Representatives and the Senate in 2020 and was signed into law on Jan. 13, 2021. Health insurers will now be subject to the same laws that other businesses are required to comply with and that prohibit unfair practices such as price fixing, price gouging, collusion and market allocations that hurt consumers. Learn more below.

Q&A on the recently enacted Competitive Health Insurance Reform Act

Q. What does the new legislation do?

A: It levels the playing field between a doctor and a health insurance company. Doctors have long been subject to federal antitrust scrutiny. Federal antitrust laws strictly prohibit such things as discussing with other doctors current or future prices or charges; discounts for cash payments; or any term, condition or requirement upon which a doctor deals or is willing to deal with any existing or proposed participating agreement with any third-party payor or vendor. Health insurance companies, on the other hand, have been free to exchange among themselves suggested price information, terms of service and criteria for the reimbursement of doctors of chiropractic. They also have been free to obtain and utilize reimbursement criteria from various “medical consultants” who often are direct competitors of doctors of chiropractic and have anticompetitive intent. With certain limited exceptions, this ability of insurance companies now ends with the elimination of the “business of insurance’ exemption to the federal antitrust laws.

Q. What are the limited exceptions to the new law?

A: Health insurers may continue to:

  1. Collect, compile, or disseminate historical loss data.
  2. Determine a loss development factor applicable to historical loss data.
  3. Perform actuarial services so long as it does not involve a restraint of trade, and
  4. Develop or disseminate standard insurance policy forms if these forms are not mandatory.

All of these functions are general in nature and would not protect against the types of specific problems doctors of chiropractic have encountered with health insurers.

Q. How does the new law change a common practice of one insurer setting its rates and a month later all of the rest of the insurers in an area line up five to 10 cents off of the rate set by the original insurer? Fee schedules are supposed to be confidential and they all claim internal processes.

A: Such collusive activity is now subject to antitrust scrutiny and is no longer protected by the “business of insurance” exemption health insurers enjoyed before the new law. Such activity becomes a matter of proof of collusion that can done through direct evidence and expert analysis as, for example, was done in the Wilk v. AMA case.

Q. How can the new law be enforced?

A: Anticompetitive practices of insurance companies which are now no longer protected by the “business of insurance” exemption are subject to enforcement actions as any other federal antitrust violation. Actions may be brought by the U.S. Justice Department, the Federal Trade Commission or by an individual plaintiff in federal court. Plaintiffs may recover treble damages along with attorneys’ fees and costs.