The Tri-Star State: The Scorecard For Free-Market Health Care Reforms

Jun 3, 2019

Rep. Cameron Sexton (R-Cookeville) announced a slate of Republican health care initiatives in February.

Republicans in the Tennessee House of Representatives vowed to make free-market reforms in health care this year. The agenda was ambitious — reduce surprise billing, incentivize patients to be more cost conscious and deregulate the hospital industry.

In the end, some legislation stalled out, some was substantially watered down, but patients may still see some change.

More: Tennessee Republicans Unveil Health Care Plan Focused On 'Free-Market Concepts'

Surprise medical bills have spawned the collective ire of patients around the counrty through projects like "Bill of the Month" from Kaiser Health News. And legislatures throughout the U.S. have felt compelled to respond, including the Tennessee General Assembly.

Surprise Billing

Lawmakers passed something that's fairly basic and non-controversial, titled the "Healthcare Billing Clarity Act." In reality, it mostly just ensures services are broken out clearly so it's easier to recognize when a hospital may have double-billed for a service. Even the hospitals were on board with this change.

"We view the legislation as an opportunity to continue to inform and educate patients about the healthcare system and billing practices," Tennessee Hospital Assosiation spokesperson Yolanda James said in a statement.

The confusion about who is billing for what is just a tiny part of the surprise billing problem. But there are other states like Texas that have just taken a big swing at the core issue, which is when people are hit with out-of-network bills from an emergency room.

The Texas legislature just passed a measure in the last few weeks that would essentially shield patients from having to pay out-of-network rates when insurance companies and hospitals are wrangling over charges.

'Right To Shop'

There is a new law that was dubbed "right to shop" that passed after several years of background discussions. Basically, it incentivizes patients to shop around for cheaper services and let's them share in some of the savings.

Health care consumers are increasingly aware that common tests like an MRI can cost hundreds of dollars one place and thousands of dollars somewhere else. Now that out-of-pocket deductibles are so much higher, patients care quite a bit more about how much those things cost.

The "Tennessee Right To Shop Act" is intended to get insurance companies to split the savings with the patient 50-50. But don't check the mailbox anytime soon for a rebate check.

The original wording of this legislation required insurance companies operating in Tennessee to start these shared savings programs next year. They pushed back. After intense lobbying, the law merely allows insurers to start shared savings programs.

But as the conference committee worked out the final details, Sen. Kerry Roberts, R-Springfield, encouraged insurers to participate.

"We are very hopeful that you will embrace incentives as a means of doing something that you have not been able to do in the past, and that is to steer a patient to a lower cost provider," he said.

Certificate Of Need

There were a couple of bills that would either outright repeal or substantially reduce requirements for a "certificate of need" when opening a health care agency or facility. In the CON process, a proposed hospital or hospice agency has to convince state regulators that their service is actually needed, not just stealing patients from existing providers.

Some conservative states have gotten rid of these regulations altogether, with encouragement from the Trump White House, as a way to potentially increase competition and perhaps drive down costs. But the idea has not caught fire among conservatives here.

Rep. Cameron Sexton, R-Cookeville, says he's getting an earful from nonprofit hospitals, for instance, who are worried about for-profit entities opening up in their communities and hurting their business.

But there's still some interest in rolling back certificate of need requirements, like for free-standing emergency rooms. There are some rural communities that are desperate for an ER because they can no longer support a full hospital at the moment. So legislators are spending some of this summer studying the issue.

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