Hospital Shuns Original Medicare Users: Lawmaker

What You Need to Know

Rep. Anna Eshoo, a Democrat, suggested Congress needs to ask insurers about health system practices.
New federal regulations require hospitals to post many of their prices.
Chris Severn, a health price service CEO, said one problem is that hospitals can create their own price reporting format.

Some members of the U.S. House are wondering whether the big hospitals’ health systems have too much market power.

The issue came up often Tuesday, when the House Energy and Commerce health subcommittee held a hearing on transparency and competition in health care.

Rep. Anna Eshoo, D-Calif., said she has been thinking about how a large health system in her area has been responding to would-be patients.

“They were turning away new patients with traditional Medicare but accepting patients who have Medicare Advantage and private insurance,” Eshoo said. “The private-insured are favored over the publicly insured.”

The health system’s new CEO told Eshoo the organization would try to change that strategy, at least for new health care providers, but, later, she found that the organization seemed to be keeping the patient selection strategy in place.

Eshoo said that she thinks insurers are in a much better position to negotiate prices than the patients, but that, in some cases, health systems have bought up all of the competitors and have no need to do much for the insurers.

“They can demand that insurers pay whatever price they set,” Eshoo said.

What It Means

Members of Congress have noticed that health care system players other than health insurers may contribute to rising health care costs and the lack of easy-to-find information about costs.

The Hearing

Health insurers and health care policy specialists have been talking for decades about the effects of lack of competition, complicated pricing structures and lack of easy patient or employer access to detailed price information on the cost and quality of U.S. health care.

During the administration of former President Donald Trump, Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, tried to increase price transparency by releasing price transparency regulations.

Trump himself issued executive orders setting price posting requirements for hospitals and insurers.

Rep. Cathy McMorris Rodgers, R-Wash., the chair of the full House Energy and Commerce Committee, and Rep. Brett Guthrie, R-Ky., the chair of the health subcommittee, said they organized the hearing because of bipartisan frustration with the lack of full, useful compliance with the price transparency requirements.

McMorris Rodgers cited the story of a South Carolina woman who needed a biopsy, received a hospital price tool estimate that the biopsy would cost $1,400 out of pocket, and ended up having to pay $5,000 out of pocket.

“Patients shouldn’t be in the dark until after they receive care and their bills come,” she said.

Most hospitals have not complied fully with the hospital price posting rules, and CMS has imposed two penalties on hospitals for price posting failures, McMorris Rodgers said.