A top Republican and a top Democrat in the U.S. Senate have put a long health insurance agent and broker compensation disclosure provision in a major new health care finance system change bill.
Sen. Lamar Alexander, R-Tenn., and Sen. Patty Murray, D-Wash.,Alexander, included the provision in their new Lower Health Care Costs Act of 2019 bill draft.
Alexander — the chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee — and Sen. Patty Murray, D-Wash., the highest-ranking Democrat on the Senate HELP Committee, have been trying for years to come up with a bipartisan effort to shore up the current Affordable Care Act (ACA) system.
Alexander and Murray have sometimes won significant bipartisan support for their ACA fixer packages, but efforts to pass the packages failed, in part because of some Republican House members’ opposition to the idea of doing anything to that might extend the life of the ACA framework.
The current version of the Alexander-Murray bill draft has five main “titles,” or sections. The five main titles relate to improving health care transparency, improving the exchange of health information ending surprise medical bills, reducing prescription drug prices, and improving the U.S. public health system.
The health insurance producer compensation disclosure provision is part of the health care transparency title.
The Alexander-Murray Health Care Transparency Title
The proposed producer comp disclosure provision is one of a number of provisions in the health care transparency title.
Some of the other transparency provisions would:
- Ban what Congress sees as anticompetitive terms in insurance contracts.
- Ban price information confidentiality clauses.
- Set new accuracy rules for health plan provider directories.
- Require that health plan enrollees know what their own portion of medical bills will be, through a cost-sharing information access requirement.
The producer comp disclosure provision, described in Section 308 in the bill draft, would require “disclosure of direct and indirect compensation for brokers and consultants to employer-sponsored health plans and enrollees in plans on the individual market.”
Section 308 takes up about 15 pages in the 165-page draft PDF file.
The section would apply to a producer or entity expecting to earn more than $1,000 in direct or indirect compensation for selling or administering health coverage.
The revenue total used for the applicability threshold would apply to compensation for services such as benefits consulting, benefits administration, recordkeeping and providing stop-loss insurance as well as for selling coverage.
An affected individual or entity, or “covered service provider,” could report compensation as a monetary amount, a formula, a per-enrollee charge, or using ”any other reasonable method,” according to the draft text.
A covered service provider in the group health market would have to give a group health plan fiduciary compensation reports, listing the services provided and the sources of the compensation, when coverage was purchased or renewed, or when compensation arrangements changed.
A covered service provider in the group health market that made mistakes or accidentally left some information out could resolve the problem by sending a compensation report correction.
For enrollees in the individual health insurance market, the health insurance issuer would be responsible for providing the agent or broker compensation reports. The issuer would have to provide the disclosure before the consumer bought the coverage and include the disclosure on any documentation confirming the individual’s enrollment, according to the bill draft text.
If the Lower Health Care Costs Act of 2019 were passed as written and implemented as the drafters expect, the comp disclosure provisions would take effect two years after the act was enacted.
Other Alexander-Murray Bill Provisions
Here’s a look at some of the other draft provisions that might be of interest to agents and brokers:
The surprise medical bill section: Some provisions would apply to in-network care and some to emergency care sought out-of-network. This section could set independent dispute resolution rules, emergency air ambulance rules and payment benchmark rules.
The health information exchange section: One provision in this section would require a group health plan or health insurance issuer to offer each enrollee, and any health care providers or other service providers designated by the enrollee, online access to information about the enrollee’s health care provider claims, prescription drug claims, and benefits payments. The health insurer or plan would have to make the information available through an “application programming interface” or similar type of technology.
The prescription drug price section: Most of the provisions here would change processes for patenting and introducing drugs. One provision that could affect commercial health plan or Medicare drug plan enrollees somewhat more directly would revamp the federal Food and Drug and Administration’s “Orange Book.” The Orange Book is the FDA’s guide to Approved Drug Products with Therapeutic Equivalence. Advocates of updating the Orange Book rules say an update could give doctors more information about which drugs are available for specific conditions.
The Process
Alexander and Murray are planning to hold a markup, or bill revision session, for their draft in June.
The senators are asking members of the public to submit comments on the Lower Health Care Costs Act of 2019 draft by 5 p.m. Eastern Daylight Time June 5.
The senators say they also intend to consider two other pieces of legislation at the June markup: the S. 1384, Prescription Drug Rebates Reform Act of 2019 bill, which was developed by Sens. Mitt Romney, R-Utah, and Mike Braun, R-Ind., and S. 1391, the FAIR Accountability and Innovative Research (FAIR) Act bill, which was introduced by Sens. Tammy Baldwin, D-Wis.; Braun; Tina Smith, D-Minn.; and Lisa Murkowski, R-Alaska.
Resources
A copy of the bill draft announcement, and links to more information about the draft, including the draft text, are available here.
Members of the public can comment on the draft by sending emails to LowerHealthCareCosts@help.senate.gov.