Last week, the House Energy & Commerce Subcommittee on Health and the House Ways & Means Committee called the CEOs of the largest insurance companies to testify. During these hearings, Members of Congress grilled the executives on their predatory practices that deny care for patients and raise health care costs for all.
Here are top three things that were exposed during the hearings you should know:
- Insurers wield massive power in the supply chain, allowing them to deny and delay patients’ access to medicines regardless of what their doctor prescribed and dictate the cost of treatments.
As Rep. Kim Schreier (D-WA-8) explained, “not only do you delay care with prior authorization demands, sometimes you flat out deny claims after the services are already rendered. And here's an example: one of my constituents had a stroke, required hospitalization … United Health refused to pay for that hospitalization because United decided that it was medically unnecessary, overriding the doctor's own medical decision.”
Rep. Greg Murphy (R-NC-3) detailed his own experience trying to access care, “It took me eight denials myself to get a medicine that I need to exist a year and a half. I'm a physician and a member of Congress. It took me eight times through CVS to get that medication. I didn't pull any strings. I did what I was supposed to do. Imagine the average person in the country, there's been a weaponization of prior authorization. You are killing people to deliver health care.”
Unfortunately, this is all too common. Insurers decide what medicines you can access, what pharmacy you can use, what you pay at the pharmacy counter, and what hoops you have to jump through to access a medicine. - Insurance companies’ vertical integration with PBMs, pharmacies, and even doctors’ offices is limiting competition and increasing costs.
Energy & Commerce Vice Chair and pharmacist Rep. Diana Harshbarger (R-TN-1) put it plainly, “both in my practice and from health care providers across the country that contact me, there's a real concern when a single corporation controls coverage, pricing, dispensing and care decisions. When that level of vertical integration exists, competition erodes, and patients end up paying more.”
This builds on the numerous reports from the FTC and others that indicate insurers are abusing their consolidated networks to strongarm competitors, increasing their control over the medicine distribution chain. - Insurers continue to find new ways to both evade oversight and increase profits.
Congress has recently turned its attention toward a lesser-known middleman in the insurer business model: PBM group purchasing organizations, or PBM GPOs, that act as yet another supposed contracting entity for negotiating with manufacturers. These entities were created by PBMs and are often owned by giant health care conglomerates that insurance companies and PBMs belong to but appear to try to avoid the regulations that PBMs and insurers are subject to. They can generate millions in additional revenue by simply retaining rebates and charging additional fees in the commercial market.
Thankfully, Rep. Jake Auchincloss (D-MA-4) called out this practice for what it really is, saying, “these GPOs are an attempt to circumvent Congressional authority over PBM reform, and they are ultimately going to be a source of profit to the detriment of patients’ co-pays.”
For too long, these massive conglomerates have been getting away with practices that can prevent or delay patient care and charge millions in medical bills. We commend Congress for taking steps to shed light on the extent to which these companies are harming American patients.
Lawmakers should build on this momentum by passing meaningful change, including PBM reform. They also need to continue investigating how giant vertically integrated health care conglomerates raise costs. These conglomerates, which include plans, PBMs, pharmacies and even doctors' offices, and can block or delay necessary patient treatment. Patients deserve insurance that works for them.
Learn more at: PhRMA.org/PBMs.
Elise Shutzer
Elise Shutzer currently serves as Vice President of Public Affairs at PhRMA, leading issue communications for key topics including cost and access, hospitals, as well as strategic insights which oversees polling and message research activities. Shutzer is a seasoned leader with extensive experience in public policy advocacy, grassroots and public affairs. She most recently served as the Global Corporate Issue Head for Sustainability and Circularity at ExxonMobil leading advocacy campaigns on plastic waste, the circular economy and other environmental issues. Previously, Shutzer ran the energy and environmental grassroots and coalition development program at The Pew Charitable Trusts, and she spent over a decade at the Dewey Square Group, a prominent public affairs and communications firm.
Elise Shutzer