U.S. House of Representatives

Committee on the Judiciary

Henry J. Hyde, Chairman www.house.gov/judiciary

For immediate release June 22, 1999

Contact: Sam Stratman/Michael Connolly (202) 225-2492

Judiciary to Examine "Quality Health Care Coalition Act"

Would Allow Doctors to Jointly Negotiate

With Insurance Providers

The hearing will begin at 9:30 a.m. in room 2141 of the Rayburn Building. The witnesses tentatively expected to testify are as follows:

- Hon. Tom Campbell, United States Representative, 15^th District of California

- Hon. John Cooksey, United States Representative, 5^th District of Louisiana

- Hon. Joseph Hoeffel, United States Representative, 13^th District of Pennsylvania

- Hon. Robert Pitofsky, Chairman, Federal Trade Commission,

Washington, D.C.

- Hon. Joel Klein, Assistant Attorney General, Antitrust Division,

United States Department of Justice, Washington, D.C.

- Edgar Anderson, M.D., Executive Vice President and Chief Executive

Officer, American Medical Association, Chicago, Illinois

- Gary Dennis, M.D., President, National Medical Association, Washington, D.C.

- Robert Weinmann, M.D., President, Union of American Physicians

and Dentists, AFSCME, AFL-CIO, Oakland, California

- Ms. Holly Henry, Legislative Chairperson, National Community

Pharmacists Association, Seattle, Washington

- Don Young, M.D., Chief Operating Officer and Medical Director, Health

Insurance Association of America, Washington, D.C.

- Mr. Bill Jones, President, Materials Transportation Company,

Temple, Texas, On behalf of the U.S. Chamber of Commerce and the Antitrust Coalition for Consumer Choice in Health Care

- Jan Stewart, C.R.N.A., A.R.N.P., President-Elect, American Association

of Nurse Anesthetists, Seattle, Washington

- Mr. Stuart Bascomb, Executive Vice President, Express Scripts, Inc.,

Maryland Heights, Missouri

I. Background

In recent years, health insurers and health maintenance organizations (HMOs) have increasingly asserted control over health care decisions that doctors and patients once made. The insurers and HMOs contend that these kinds of controls are necessary to keep prices low and to keep health insurance coverage affordable. Doctors contend that these kinds of controls invade the traditional doctor-patient relationship and that they keep prices so low that doctors cannot practice economically. Doctors further contend that in negotiating contracts that establish these controls the insurers have much greater bargaining power than do individual doctors.

H.R. 1304 arises from this last point. Proponents argue that doctors will be able to get a fair deal in these negotiations only if the law allows them to band together to negotiate with insurers and HMOs. They argue that doctors cannot engage in these kinds of joint negotiations without an antitrust exemption. They also believe that patients will be better served because the doctors will use their greater bargaining power to seek contracts that allow the insurers less control over patient care.

Critics argue that the bill would harm consumers because it would allow doctors to fix prices and engage in group boycotts thereby driving up the cost of insurance. To the extent that health insurance premiums do rise, critics argue that this would cause a corresponding drop in federal tax revenue because of the deductibility of such premiums. The bill places no limits on the percentage of providers in a market that could band together. Thus, doctors, particularly in smaller markets, could exercise high degrees of market power. They also contend that under current guidelines issued by the Federal Trade Commission and the Department of Justice, doctors are free to band together in group practices and negotiate directly with employers if they do not like the deals they get with insurers. Ultimately, they argue that the bill would end the ability of competitive forces to control health care costs and to improve efficiency.

Some Members of the Committee have expressed concern about the potential cost of this legislation. The Committee has requested a cost estimate from the Congressional Budget Office. It is not yet clear whether this estimate will be available before the hearing. When it becomes available, it will be distributed to Members.

II. Section by Section Analysis of H.R. 1304

H.R. 1304 consists of three sections. Section 1 provides that H.R. 1304 may be cited as the "Quality Health-Care Coalition Act of 1999."

Section 2 sets forth congressional findings relating to the bill.

Subsection 3(a) provides that any group of health care professionals which is negotiating with a health plan shall, in connection with those negotiations, have the same antitrust exemption that labor unions have. (A labor union is exempt from the antitrust laws so long as it is lawfully carrying out the legitimate objects of a union. See § 6 of the Clayton Act, 15 U.S.C. § 17.) The term "health care professional" is defined in subsection 3(d) to include nurse-practitioners and pharmacists within the exemption.

Subsection 3(b) provides antitrust immunity for actions taken in good faith reliance on the exemption provided by subsection 3(a).

Subsection 3(c) provides that the exemption provided in subsection 3(a) shall not confer any right to participate in a collective cessation of services not otherwise permitted by law.

Subsection 3(d) provides definitions of the terms "antitrust laws," "health plan," "health insurance coverage," "health insurance issuer," "group health plan," "Medicare+Choice organization," "Medicare+Choice plan," "Medicaid managed care entity," and "health care professional"as those terms are used in the bill.