Rep. Banks’ Bill Would Lower Hospital Costs

(WASHINGTON ) – In the midst of the coronavirus pandemic, Rep. Jim Banks (IN-03) introduced the Hospital Competition Act of 2020 designed to lower the cost of hospital visits by incentivizing hospital monopolies to restore a free market thereby creating more competition and lowering prices for patients.

Rep. Jim Banks

“Patients already suffering medically don’t need to suffer economically as well,” said Rep. Banks. “In the midst of a global health crisis, hospital monopolies in large, urban areas may be tempted to profit from the pandemic. This bill would prevent that from happening. Instead, we should use this opportunity to lower health care costs for all Americans.”

“Democrats want a government takeover of healthcare that forces taxpayers to shoulder the high cost of care. Republicans should use market-based reforms to cut the cost of care like this bill does,” continued Banks.

Watch Congressman Banks explain further here.

Background

In 2018, Americans spent nearly $1.2 trillion on hospital services. It is projected that hospital costs will exceed $13,000 per household by 2026 – nearly one-fifth of household income. The Hospital Competition Act would reduce these costs by:

  • Incentivizing de-consolidation for hospital systems in highly-concentrated urban areas by requiring them to either accept Medicare Advantage reimbursement rates from commercial payers or voluntarily divest and restore a competitive provider market.
  • This provision would not apply to hospitals with less than 15% market share;
  • This provision would not apply to hospitals in Medicare-designated rural areas;
  • The Critical Access Hospital Formula would increase allowable cost reimbursements phased up from 101% to 110% to further support rural providers. 
  • Authorizing a 400 percent increase ($160 million) in Federal Trade Commission (FTC) staff dedicated to ensuring that hospital mergers do not restrict competition and then raise their prices to unaffordable levels;
  • Providing grants to states ($1 billion annually) that implement free market reforms to increase hospital competition;
  • Requiring hospitals to publish the cost of their most 100 common services and publish and honor price lists for related bundles of discrete services such as prenatal care and childbirth;
  • Reducing the cost of outpatient care by equalizing reimbursement rates for hospital outpatient departments and independent physician practices;
  • Removing incentives to form hospital-led Accountable Care Organizations (ACO) that contribute to consolidated care. Incentives would remain for Physician-led ACOs;
  • Repealing the ban on construction of new physician owned hospitals;
  • Barring hospitals and insurers from using anti-competitive contract provisions to raise prices on patients; and
  • Granting the FTC authority to investigate anti-competitive practices by tax-exempt hospitals.

Click here to read the full bill text.

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