Congressional Hearing Examines Health Care Cost Transparency, New Reporting Requirements for ERISA Plans

July 20, 2018

The House Energy & Commerce Committee held a hearing to examine state efforts to improve transparency of health care costs, including narrowing the ERISA preemption to enable requirements by states that ERISA plans submit data to All Payer Claims Databases (APCDs).

Witnesses encouraged policymakers to support greater competition by narrowing the ERISA preemption of state health reform efforts, especially those targeting transparency.  The witnesses were Dr. Michael Chernew of Harvard Medical School and Dr. Jaime King of UC Hastings College of Law.

“Addressing the ERISA problem is foundational to any transparency initiative that you would propose,” said Dr. King. “There is a savings clause in ERISA that says that any state insurance law that directly regulates insurance will be saved from ERISA preemption, but it doesn’t deem self-insured employer plans to be insurance, even though half of employees get their insurance through self-insured employer plans.”

Employers not invited to testify: When asked who would oppose limiting ERISA preemption. Dr. King responded, “I think industry would oppose it.  They like not having regulations apply to them, but it is crippling state APCDs. . . . If APCDs had all the health care claims in a particular state, they could really get a handle on what’s driving costs, where competition is not working, and which mergers or acquisitions should or should not go through.  It also provides the foundation for the majority of the solutions we’re talking about, such as allowing individuals to have better price information, putting that information into the hands of providers and insurers, and [having a basis for] reference pricing.”

The Senate Committee on Health, Education, Labor, and Pensions also held a hearing on eliminating excess health care spending and improving quality and value for patients. Dr. David Lansky, President and CEO of the Pacific Business Group on Health, encouraged the pursuit of three main policy approaches: transparency of health outcomes, strengthening the Accountable Care Organization and bundled payment programs, and encouraging centers of excellence in Medicare.

House votes next week: The House will vote next week on three bills, including measures to expand health savings accounts (H.R. 6199 and H.R. 6311), repeal the ACA medical device tax (H.R. 184), and delay the ACA health insurance tax (H.R. 5963).  Democrats in opposition argue that these will not repair the damage that Republicans made to the individual market by repealing the ACA individual mandate as part of tax reform last year.