The National Academy for State Health Policy has developed these model laws and resources to help states address rising health care costs. Accompanying each model act are additional resources, including in-depth analysis, Q&As, and examples of bills already approved by state legislatures across the country. To request additional resources — available only to state officials — please email mhq@nashp.org.
Anticompetitive Health Plan Contracts
This model legislation prohibits anticompetitive contract clauses that dominant health care systems may demand in contracts with health insurers to increase prices and thwart cost-containment efforts. The model specifically prohibits four common anticompetitive contract provisions that health systems have used in consolidated markets:
- All-or-nothing contracting
- Anti-tiering or anti-steering clauses
- Most-favored-nation clauses
- Gag clauses
To create a more level playing field for negotiations to lower hospital costs, this model bans anticompetitive contract terms using states’ consumer protection and antitrust laws.
April 2021
This report describes how consolidated systems use anticompetitive contract terms to charge supracompetitive prices and explains how the model act can give states essential tools to combat these terms and rein in rising health care costs.
Using Insurance Rate Review to Control Costs
For over a decade, Rhode Island has used its health insurance rate review authority to constrain the growth of hospital prices to the rate of inflation plus 1 percent. Other states are moving to implement similar strategies that give the insurance commissioner the authority to enforce affordability standards as part of the health insurance rate review process.
This model allows the insurance commissioner to condition health insurance rate approval on carriers’ limiting the rate of hospital cost growth.
June 2021
This toolkit allows states to assess their existing health insurance rate review laws for the authority to regulate hospital cost growth and proposes model statutory and regulatory text to condition health insurance rate approval on meeting affordability standards in hospital cost growth.
February 2021
This blog provides background on how Rhode Island used affordability standards in insurance rate review to control hospital cost growth.
Hospital Finance Transparency
Year after year, hospitals account for the largest expenditure of US health care dollars, followed by physician and clinical services, of which over half are owned by a hospital or a hospital-affiliated health system. To address rising health care costs, state policymakers and the public need detailed hospital financial information to understand a hospital’s assets as well as its expenses and liabilities.
NASHP’s model legislation identifies what data must be collected, which hospital documents should be used to obtain the information, and underscores that a state agency or office must be responsible for analyzing the data. NASHP also provides a reporting template to help states implement the law and collect the information needed to evaluate the vitality of a state’s hospitals.
August 2020
Download this reporting template to use or adapt to capture the necessary data to implement the hospital financial transparency law.
2020
This report, prepared by Sarah Gunther Lane, MS, Elizabeth Longstreth, BA, Victoria Nixon, MS, and Nancy Kane, DBA, provides an overview of the key questions policymakers can ask to understand hospital financial performance, including background on hospital revenues and expenses, sources of financial information, and evaluations of financial health.
Facility Fees
This model legislation prohibits site-specific facility fees for services rendered at physician practices and clinics located more than 250 yards from a hospital campus. It also prohibits all service-specific facility fees for typical outpatient services that are billed using evaluation and management codes, even if those services are provided on a hospital campus.
The act requires annual reporting of facility fees charged or billed by health care providers, delegates implementation authority to a relevant state agency, and provides three enforcement mechanisms:
- An annual facility fee audit by the relevant state agency;
- A private right of action for consumers; and
- Administrative financial penalties against health care providers for violations.
August 2020
This report by Erin Fuse Brown, JD, MPH, explores the increased financial pressure for vertical consolidation, its financial impact on states and consumers, and what policies states can implement to address the coming wave of vertical health care consolidations.
August 2020
This blog explains how prohibiting site-specific facility fees and requiring annual reporting of facility fees can lower health system costs.
State Purchasing Pool Buy-In
This model legislation allows small businesses and individuals to buy into a state employee prescription drug benefit purchasing pool. It authorizes non-state public employers, self-insured private employers, and insurance carriers who cover small groups or individuals to purchase drugs for their enrollees under the state’s purchasing authority. By adding more lives to a purchasing pool, purchasers can negotiate better prices for public employees and others who join the purchasing pool.
October 2019
This white paper provides a roadmap to help states navigate legal issues and implement a state purchasing pool.
Improved Oversight of Provider Mergers
This model legislation grants state attorneys general and state health officials with overarching authority on cost, like a health cost commission, the authority to review, place conditions upon, and block potentially harmful consolidation of health care providers in their state. It creates a comprehensive review process for transactions with the potential to reduce access, increase costs, or that are otherwise not in the public interest. The model addresses gaps in federal antitrust enforcement because it would require state review of health care transactions at values below the Hart-Scott-Rodino Act threshold and apply to all types of consolidation, including horizontal, vertical, or cross-market.
Out-of-Network Provider Rate Limits
This model legislation limits out-of-network rates for inpatient and outpatient hospital services to the lesser of (a) the state’s median in-network commercial rate for the same service; or (b) a percentage of the Medicare rate for the same service in the same geographic area.
Evidence from the Medicare Advantage program and studies analyzing the impact of price limits in several states indicate that an out-of-network rate limit can reduce in-network negotiated rates, encourage in-network participation, and reduce overall spending. An out-of-network rate limit reduces the value of a provider’s option of staying out-of-network, which providers can use to increase their prices. Such limits could change the dynamic between payers and powerful providers, resulting in lower costs and increased access for patients.
November 2022
November 2022