Anti-trust Laws Used to Disempower Health Care Providers and Patients, But Not Big Insurers!

By Judy Arnold, LCSW

If it was not painful, it would be laughable. Do you know a Clinical Social Worker/Psychotherapist who has a monopoly, cartel, or trust? One that controls the whole New York State market? But I bet you can think of an insurance company that does! In college we social workers did not learn about antitrust laws because we were not encouraged to go into private practice. However, in the current healthcare climate, the prohibition of civil service employees to strike (county mental health) is a relic, in much need of reform. Clinical Social Workers need to have the ability to jointly negotiate with insurances companies, just like other workers can negotiate with the people who cut their checks. Doing so will allow greater access to services for those least able to pay.

But, alas, we might be saved/protected by Assembly Bill A.336 (Richard Gottfried) or Senate Bill S1157 (Kemp Hannon). An act to amend the public health law, in relation to requirements for collective negotiations by health care providers with certain health benefit plans. This bill would allow Licensed Clinical Social Workers — in solo or small group practices — to communicate with each other and jointly negotiate with health insurance companies in certain circumstances. Without this basic right, independent clinicians and those in small group practices are powerless to challenge the practices of huge health insurance companies that offer “take it or leave it” contracts which almost always contain provisions which are unfair to care providers and patients alike. This law will empower Licensed Clinical Social Workers to advocate for their patients, encourage competition among health care plans (imagine: health insurers fighting each other to attractive social workers!), and restore some semblance of fairness and balance in a marketplace that is increasingly and overwhelmingly dominated by one sector of the health care industry.

The New York State Chapter of the National Association of Social Workers representing over 8,000 social workers across the state strongly supports this measure. Currently, federal antitrust laws generally prohibit individual health care providers from collectively negotiating contracts with managed care entities. Given the likelihood that health insurance company domination will grow as a result of the hundreds of thousands of New Yorkers newly receiving coverage through the State’s Health Insurance Exchange, as well as the implementation of the mandate to purchase health insurance, it is incumbent upon this organization to empower patient’s clinicians to advocate on their (the patients) behalf.

This bill would take advantage of the “State Action” doctrine created nearly 70 years ago by the US Supreme Court in a landmark decision permitting collective action under close state supervision to vindicate legitimate public interests. This bill would allow, in limited instances, health care providers in New York State to conduct some collective negotiations by creating a system under which the state would closely monitor negotiations, and approve or disapprove such negotiations from going forward. While the Federal Trade Commission (FTC) does not favor “state action immunity” exceptions to federal jurisdiction, the exception is well recognized.

New York’s Concentrated Health Insurance Market

With insurer consolidation, regional markets continue to be further dominated by a dwindling number of health insurance behemoths. According to a 2014 report from the American Medical Association, 82% of the enrollees in the commercial managed care market in New York State were enrolled in just 5 health insurance companies. And the same report demonstrated that most regions of New York State had two insurers dominating that market. In the Binghamton area it is Excellus and United.

At the same time these companies wield such market domination, their profits have grown significantly. According to a recent United Hospital Fund report, profits for health insurers serving New York’s commercial market were $1.3 billion for 2010, a nearly 50% increase over 2009. Moreover, their executives continue to be handsomely compensated. CEO salaries range from $8M at Emblem to $19 million at Cigna.

Managed Care Organizations (MCOs) are increasing premiums for businesses and other payers at a dramatically high rate, even as they reduce coverage, limit patient access, and maintain stagnant or reduced reimbursement rates. And because insurers – whether by legitimate means or otherwise – have somehow come to effectively set the same rates, social workers face the same situation no matter where they turn. Thus social workers are faced with a classic Hobson’s choice: agree to the insurers’ terms or eliminate access to their services for those who cannot afford to pay out of pocket.

The only way to maintain a high level of quality of psychotherapy services and robust choice of therapists for consumers — short of the State setting rates — is by enabling social workers to collectively bargain. Only then can there be a countervailing force to challenge the insurance companies’ essentially oligopolistic power to set reimbursement rates at unreasonably low levels. Access to mental health care should not be subject to the greediness of insurers; nor should the burden of providing access to mental health care simply be dumped on the economically challenged shoulders of social workers.

But guess who wanted a waiver/exemption – the insurance industry in 1945. The Sherman Antitrust Act, passed by Congress in 1890, prohibits anti-competitive business activities and empowers the federal government in investigate trusts. This law, of course, was used to break union activity, only legalized with a 1914 exemption. However businesses got around it by mergers. Insurance companies too have an exemption, the McCarran-Ferguson exemption passed Congress in 1945 to protect small insurance companies who had a great need for data from existing insurers in order to set premiums effectively. Because such information sharing was illegal under the antitrust standards of the era, Congress provided an antitrust free pass. This same information sharing is prohibited to social workers. A muzzle is a muzzle.

In 2013 David A. Balto, former policy director, FTC, stated, “If there was one thing clear from the Congressional debate over health care, it is that health insurance markets are unhealthy.” The Health Care Reform bill contained a provision to end this insurance exemption, but it was removed.

Our national framework of trade regulatory statutes, including our antitrust laws, was enacted to prevent the huge concentration of market power in a few massive sellers and/or buyers. The application of these laws in such a way as to enhance the power of huge health insurers by effectively crippling providers, patients and health insurance purchasers is a gross perversion of these statutes.

PLEASE contact your legislators and tell them you support their bill.

FAX: Gottfried – 518-455-5939 Hannon – 518-426-6954

 

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