This bill mandates a GAO study, in collaboration with the FTC and DOJ, to examine the impact of specific anti-competitive contract clauses between health insurers and providers on patient care and costs.
Victoria Spartz
Representative
IN-5
This Act mandates a comprehensive study by the GAO, in collaboration with the FTC and DOJ, to investigate the impact of specific anti-competitive contract clauses used between health insurers and providers. The review will assess how clauses like anti-steering, anti-tiering, all-or-nothing, and gag clauses affect healthcare costs, consolidation, and patient access. Furthermore, the study must recommend necessary legislative or administrative changes to strengthen the FTC and DOJ's ability to enforce antitrust laws regarding these agreements.
GAO Gets 18 Months to Study How Secret Health Care Contract Clauses Drive Up Your Costs
This bill, the Addressing Anti-Competitive Health Care Contract Clauses Act, doesn’t change any laws immediately. Instead, it’s the legislative equivalent of saying, “Hold up, we need to see the receipts.” It mandates a major study, due within 18 months, by the Government Accountability Office (GAO) to figure out exactly how certain restrictive contract clauses between health insurance companies and large hospital systems affect competition, costs, and patient access. The goal is to shine a light on the fine print that might be making your premiums and out-of-pocket costs astronomical.
The Fine Print That Costs You
For the purposes of this study, the bill defines several contracts terms that sound like they belong in a legal thriller but impact your wallet every day. Think of “gag clauses” (SEC. 3)—these are provisions that stop providers or insurers from telling you, the patient, the actual negotiated rate, the allowed payment amount, or even your out-of-pocket costs before you get a service. It's like buying a car without knowing the price until after you sign the papers. The GAO will also look at “anti-steering clauses,” which prevent your insurer from offering you incentives—like lower co-pays—to choose a cheaper, high-quality provider over a more expensive one. If you’ve ever wondered why your insurance company doesn’t just tell you the cheapest place to get an MRI, these clauses might be why.
All-or-Nothing Deals and Tiering Trouble
The study also zeroes in on “all-or-nothing clauses” (SEC. 3). This is where a large hospital system tells an insurer, “If you want to contract with our highly-rated downtown hospital, you also have to contract with our less-efficient, more expensive rural clinic.” The insurer is forced to take the whole package, which limits their ability to negotiate and often means you pay more for services across the board. Similarly, “anti-tiering clauses” stop insurers from putting providers into different cost tiers—say, putting the most affordable, efficient doctors in Tier 1 and the more expensive ones in Tier 3. Without tiering, every provider looks the same to the insurer, removing a key tool for driving down costs and guiding patients toward value.
Is the Government Equipped to Fight Back?
Beyond analyzing the impact of these tricky clauses on consolidation and cost, the GAO study must assess whether the Federal Trade Commission (FTC) and the Department of Justice (DOJ) have the staff, funding, and legal authority to effectively enforce antitrust laws against these practices (SEC. 2). This is a critical check. If the agencies tasked with maintaining market competition are fighting with one hand tied behind their backs, the report will recommend specific legislative or administrative changes to give them better tools. Essentially, the bill aims to identify the problem and then figure out if the government has the right wrench to fix it. While this bill doesn't fix anything today, it sets the stage for future policy that could finally force transparency and competition back into the healthcare market.