With industry pundits focused on the fate of the Affordable Care Act in the U.S. Supreme Court, the Protecting Access to Healthcare (PATH) Act has been quietly wending its way through Congress. In addition to imposing federal standards on medical malpractice lawsuits, the Act would repeal the limited exemption from federal antitrust law for the "business of health insurance."
Since 1945, the McCarran-Ferguson Act has provided a limited exemption for insurers from federal antitrust laws. McCarran-Ferguson does not protect insurers from claims of boycott, intimidation, coercion, bid-rigging, or price fixing. But it does allow insurers to share some important data, such as cost and trending data, with competitors under certain state regulated conditions. That ability would cease with the passage of the PATH Act, at least in its present form.
The immediate impact of the McCarran-Ferguson repeal would likely be felt by smaller insurance companies that would be unable to access the broad industry data necessary to price new risk. Entry into the insurance market by new companies would likely also be more difficult, as the new entrant would be unable to access industry historical data for underwriting purposes.
It is possible that the changes to state insurance laws mandated by the PATH Act may also make it more difficult for provider networks (whether using the accountable care organization (ACO) model or otherwise) to obtain claims data that would be necessary for them to build risk-sharing pricing models and generally to compete with insurers for self-funded employer plan business. Provider networks, provider-sponsored health care plans, and HMOs should be aware of these potential changes and how they may affect their strategic and operational goals in this rapidly evolving segment of the health care industry.