Feds Warn Health Care Changes Could Harm Consumers

The Federal Trade Commission is warning that one of the key health care reform bills trumpeted by Lt. Gov. David Dewhurst and Sen. Jane Nelson, R-Flower Mound, earlier in the session could substantially harm consumers. 

In response to a request from Rep. Elliott Naishtat, D-Austin, the FTC released a letter saying the antitrust exemption for health care collaboratives in Senate Bill 8 “poses a substantial risk of consumer harm, by increasing costs and decreasing access to health care.”

Senate Bill 8 gives the Health and Human Services Commission permission to test various performance-based payment programs in order to increase efficiency and find ways to link payment to improved patient outcome. The health care collaboratives would be required to pay the Texas Department of Insurance a fee to register, which the legislation states would cover the costs of hiring employees to ensure the collaboratives don't violate antitrust laws. The insurance department would be able to revoke a collaborative's license if it deemed the collaborative was reducing competition or raising costs for consumers. 

In the letter, the FTC says the antitrust exemptions in the bill are “unnecessary,” because antitrust laws already permit health care organizations to form collaboratives. They say the provision to increase allowances for coordinated activity in the bill “goes beyond” what is currently legal and “appears intended to shield a broad range of anticompetitive conduct from antitrust challenge.”

Nelson called the letter a "partisan attack" and says she will continue to fight for reforms. “This is yet another attempt by the federal government to meddle in Texas’s efforts to make our health care system operate more efficiently," she said in a statement. 

“I had no idea that the Federal Trade Commission would turn this into a major event,” said Naishtat, who said he sent a one-paragraph letter to the FTC after the Consumers Union brought its concern to him about the antitrust law exemptions in the bill. “I was amazed that their response was so critical and detailed…[it] went far beyond what I thought I would receive.”

[Editor's note: An earlier version of this story referred to the bill as Medicaid reform legislation instead of as a more general health care reform bill. According to the bill analysis accompanying the legislation, it creates the Texas Institute of Health Care Quality and Efficiency "to improve health care quality, accountability, education, and cost containment in Texas by encouraging health care provider collaboration, effective health care delivery models, and coordination of health care services."]