The Competitive Health Insurance Reform Act Is Reality: Now What?

In early 2021, the president signed into law legislation that will promote fair competition in health insurance markets with the removal of a 75-year-old exemption that allowed companies to avoid federal antitrust laws. The Competitive Health Insurance Reform Act (H.R. 1418) passed both the House of Representatives and the Senate in 2020 and was signed into law on Jan. 13, 2021.

H.R. 1418 was bipartisan legislation introduced by Reps. Peter DeFazio (D-Ore.), Paul Gosar (R-Ariz.) and House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.). It repeals the McCarran-Ferguson Act, passed in 1945, which allowed health insurance companies that conducted business in more than one state to operate outside of federal antitrust laws established by the Sherman Act. 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. ACA members lobbied for passage of this bill, and iterations of it, over several years during the association’s annual Capitol Hill advocacy day.

Since the legislation (now Public Law 116-327) went into effect, several ACA members have reached out to ask specifically how the law affects their practices. Below is a Q&A that should answer most concerns chiropractors have regarding the 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. So, 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 are strictly prohibited under the federal antitrust laws.

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 have also 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 these functions are general in nature and would not result in 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 lining up 5 to 10 cents off of the rate set by the original insurer? Fee schedules are supposed to be confidential; yet they all claim internal processes but still hit the same numbers.

A: Such collusive activity is now subject to antitrust scrutiny and is no longer protected by the “business of insurance” exception. It becomes a matter of proof of collusion, which can be done through direct evidence and expert analysis—as, for example, was successfully achieved in the Wilk v. AMA case.

Q. How can the new law be enforced?

A: Anticompetitive practices of insurance companies that are no longer protected by the “business of insurance” exemption are now subject to enforcement actions as with 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.

Q: What can chiropractors do now to take advantage of this new law?

A: The new law adds an additional federal antitrust remedy to other available remedies, including but not limited to actions under state insurance laws, ERISA, and Section 2706(a) of the Public Health Service Act. It is an important remedy to take advantage of when and if the need arises.

John Falardeau is ACA senior vice president of public policy and advocacy.