West Virginia passes health care law despite FTC staffs’ competition concerns

West Virginia Governor Earl Ray Tomblin has approved legislation, exempting certain actions of the state’s Health Care Authority from state and federal antitrust laws and immunizing certain cooperative agreements approved and subject to supervision by the Health Care Authority. The measure, Senate Bill 597, was passed, despite concerns stated by the FTC staff that the legislation will harm health care competition and consumers in West Virginia.

The bill was introduced after the FTC announced it was taking action to block the proposed merger of two West Virginia hospitals: Cabell Huntington Hospital and St. Mary’s Medical Center.

The legislation exempts certain cooperative agreements from federal antitrust law, including mergers and acquisitions among health care providers, so long as one of the providers is a member of an academic medical center. In a letter sent to state representative Mike Pushkin (D-Kanawha), staffs of the FTC Office of Policy Planning, Bureau of Competition, and Bureau of Economics stated that antitrust laws already allow efficient health care collaborations and that these cooperative agreement provisions may effectually create an undue additional regulatory barrier to procompetitive agreements. In addition, the combined effect of the cooperative agreement provisions and the exemption provisions seem “unnecessary and likely harmful,” the staffs claimed.

“FTC staff are deeply concerned that the Bill would mainly serve to encourage mergers and conduct that likely would not pass muster under the antitrust laws because they would reduce competition, raise prices, diminish incentives to improve quality, and provide relatively small or no benefits to consumers,” the letter stated. Although the cooperative agreements are supposed to include a teaching hospital, the competitive harm would originate from the loss of competition between two or more other hospitals or health care providers that are permitted to join the cooperative agreement, the staffs further claimed, and the anticompetitive effects might spread well beyond the teaching hospital.

Lastly, the staffs asserted that because the antitrust laws already allow efficient and pro-consumer collaborations and mergers among competing health care providers, the exemption provisions of the legislation may encourage groups of private health care providers to engage in “blatantly anticompetitive conduct.”

West Virginia Joins States’ Trend of Requiring Autism Coverage, Amends Legislation

West Virginia passed legislation in 2011 that will require insurers, both private and public, to cover applied behavioral analysis which is a treatment for many autism spectrum disorders. However, many flaws have been discovered in the language regarding coverage limits, including age and spending limits, which make execution of the law difficult. Additionally, language had been included in the final draft of the law that was supposed to be removed prior to its passage. The state’s legislation announced on January 23, 2012 that it had initiated a course of action to address the mistakes.

Approximately one in 110 American children is diagnosed with autism, a developmental disorder that prevents a child’s brain from developing normally in areas affecting communication and social skills. While a cure has not been discovered, early intervention treatments have proven to manage the disorder’s symptoms. Many parents contend that the therapeutic needs of their children are not sufficiently met in the public school system, so they are forced to seek treatments outside of school. Such treatments, including applied behavioral analysis, can be expensive, costing some families upwards of $50,000 annually.

The recent trend, adopted by 26 states, including West Virginia, mandate insurers to cover autism treatment. Some other states have passed legislation requiring more restricted coverage of the disorder under mental health parity laws. The only states remaining that have not addressed the issue in some fashion are Oklahoma, Utah and Wyoming. Ron Ashworth, the Board Chair for Sisters of Mercy Health Systems, is an advocate of autism coverage for both social and economic reasons. He states, “…without early treatment, the cost to society is immense–over $100,000 per individual. The cost of insuring for autism is much less than not insuring.” Advocates maintain that coverage will not greatly inflate the cost of insurance premiums, if at all, while it reduces the chance that autistic children will grow to be non-productive adults who are a greater financial burden on taxpayers.

Some disagree, including the Council for Affordable Health Insurance, which estimates that insurance premiums may go up one to three percent by mandating insurers to cover autism spectrum disorder-related treatments. Challengers of the mandate argue that parents of children affected by autism and even their school districts need to assume responsibility for autism treatment and that mandating coverage interferes with the free market. Others contend that many treatments for autism are investigational and experimental, making it inappropriate to require coverage.

While its passage may be controversial, West Virginia Acting Governor, Earl Ray Tomblin, takes pride in the passage of the state’s mandate and recognizes the difficult five year-long lobbying process by parents of autistic children and other advocates. Tomblin stated, “I feel these families’ pain and am happy to be a part of improving their lives…It is my hope that this legislation will bring opportunities for a better life to our children with autism and their families…”