Proposed bill would bring more analysis to impact of health care consolidation

Congressional lawmakers have introduced a bill that could bring more scrutiny to hospital and health care mergers.

The measure has bipartisan support with U.S. Reps. Michael Burgess (R-Texas), Drew Ferguson (R-Ga.), and Debbie Dingell (D-Mich.) acting as its main sponsors. They have dubbed the bill the “Providers and Payers COMPETE Act of 2023.”

The lawmakers say the bill would require the U.S. Department of Health and Human Services (HHS) to examine how the regulatory process is affecting health care mergers. The department would be required to produce annual reports to Congress determining whether Medicare payment rules are affecting consolidation.

The bill’s sponsors say it could reduce costs and improve medical care for Americans.

"Our health care system demands a comprehensive examination to eliminate anti-competitive practices," Burgess said in a statement. "This legislation will empower HHS with a thorough understanding of the implications of new payment proposals, fostering a climate of competition and shielding American patients from exorbitant health care costs. By doing so, we are safeguarding both patient autonomy and financial well-being."

Expressing a similar sentiment, Dingell said, “The increasing consolidation we are seeing across the health care industry drives up prices and undermines health care equity. This legislation will ensure that HHS fully understands the implications of new payment proposals on further consolidating the health care system, to improve competition and better protect patients from higher health care costs.”

The American Hospital Association (AHA) opposes the legislation.

​​“HHS is not charged with protecting competition and it lacks the necessary expertise in this area,” the association wrote. “These new responsibilities are unnecessary since two other federal agencies — the Department of Justice’s Antitrust Division and the Federal Trade Commission — already have jurisdiction over federal antitrust enforcement. These agencies routinely study, report on and take action to protect competition in the health care sector for the benefit of consumers.”

Members of Congress on both sides of the aisle continue to demonstrate growing concern about the impact of health care mergers. The House Ways and Means Committee approved the measure in July by a 23-17 margin.

Lawmakers have expressed dismay about the potential reduction of competition and worry about Americans paying more and getting less for health care. Lawmakers introduced a separate bill to allow insurers and employers more freedom to contract with hospitals, without entering into pacts with other affiliated hospitals or providers.

The White House has also expressed concerns. In 2021President Joe Biden issued an executive order directing federal agencies to look carefully at health care mergers, including hospital consolidations, to ensure there is sufficient competition in the industry. The FTC has applied more scrutiny to hospital deals, particularly those involving organizations in the same market.

While merger activity dropped due to the COVID-19 pandemic, more hospital consolidations have taken place in 2023, and more are expected in the coming months. The pace of mergers in the broader health care industry has slowed compared to a year ago, but analysts expect more activity this year and in 2024.

Hospitals have generally resisted efforts to put more roadblocks in the way of mergers and acquisitions. Health systems have said consolidations can lead to broader efforts to improve care across large populations, offer resources to develop tools to improve treatment and expand health care options to underserved communities.