AHA Advocates for Health Care Affordability and Fair Insurance Practices
The American Hospital Association Addresses Health Care Affordability and Insurer Practices
The American Hospital Association (AHA), representing nearly 5,000 member hospitals and health care organizations, addressed the U.S. House Committee on Ways and Means to discuss health care affordability for Americans with commercial insurance. The AHA highlighted hospitals' dedication to delivering uninterrupted, high-quality care nationwide while expressing concern over rising health care coverage costs due to payer practices.
Insurance Market Dynamics and Consolidation
The health insurance industry has seen significant market consolidation, with the seven largest commercial carriers now covering over 190 million lives—more than two-thirds of the insured population. This concentration reduces competitive options for consumers, leading to narrower networks and increased premiums. The AHA notes that in many U.S. regions, one or two insurers dominate, creating a lack of competition and exacerbating these issues.
Integrated Practices and Vertical Acquisitions
Commercial insurers have expanded through vertical acquisitions of primary care practices and other health-related businesses, such as pharmacies and pharmacy benefit managers (PBMs). This strategy has reportedly inflated costs, as highlighted by Senate Judiciary Committee findings on coding practices increasing payments. The AHA emphasizes that hospitals acquire physician practices primarily to sustain community access to essential health services rather than profit maximization.
Administrative Burdens and Prior Authorization
A significant concern is the administrative burden from AI-driven prior authorization delays imposed by insurers. These requirements often use outdated technologies, adding substantial costs and burdening providers. The AHA estimates that prior authorization processes cost $35 billion annually, with hospitals navigating complex systems to secure compensation for care delivered.
Impact of Delays and Coverage Denials
Both patients and providers are significantly affected by inappropriate denials and delays in care authorization. The Department of Health and Human Services Office of Inspector General found that Medicare Advantage plans sometimes deny necessary services, worsening patient outcomes and increasing health care costs. These denials are compounded by insurers outsourcing claims management to third-party vendors with differing criteria and incentives.
Efforts to Improve Insurance Practices
The AHA urges Congress to adopt measures to enhance the affordability of care. Proposed initiatives include standardizing prior authorization requirements, implementing prompt payment standards, enhancing transparency in denial processes, and maintaining network adequacy standards. The AHA stresses the importance of protecting reimbursement levels for hospitals, particularly in rural and underserved areas, to ensure access to necessary services.
The AHA collaborates with Congress to reform insurance practices and reduce unnecessary spending, thereby contributing to more affordable health care for Americans. Through advocacy for regulatory compliance requirements, the AHA remains committed to safeguarding patient access to essential medical services and revealing the implications of current insurer policies on the health care system.
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