AHA presses FTC to investigate UnitedHealth lab coverage policy, price hikes for travel nurses

The American Hospital Association (AHA) is calling for the Federal Trade Commission (FTC) to probe a new policy from UnitedHealthcare on coverage for diagnostic tests and to explore rate hikes for temporary nurses.

The AHA’s letter to the FTC (PDF) Thursday comes nearly a month after the agency announced a study into the impact of physician group and healthcare facility consolidation and is seeking data from six major insurers including UnitedHealthcare.

The AHA called out UnitedHealthcare’s plan to implement starting July 1 a new Designated Diagnostic Provider (DDP) program. The insurer will eliminate all coverage for diagnostic tests at any freestanding and hospital labs—even those in the health plan’s network—unless the facilities are a DDP.

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“In order to become a DDP, freestanding and network labs must complete a programmatic registration process and meet certain thresholds for quality and efficiency that are not publicly available for review,” the letter said.

A patient could get care at a non-DDP lab even if it is in their network and have their coverage get denied. The program could become a “new avenue” for surprise bills as the lab services may still be listed as in-network for the consumer, the association said.

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UnitedHealthcare said that the policy is meant to address wide discrepancies in price between freestanding and outpatient labs. 

“UnitedHealthcare members may pay as much as 500% more on average for lab services, depending on where they are performed,” the insurer said in a statement to Fierce Healthcare. “Designated Diagnostic Provider benefit designs will cover outpatient lab services provided by qualified free-standing and outpatient hospital laboratories who meet quality and efficiency criteria. The new benefit designs provide our members with access to quality, efficient care while helping to protect them from higher lab costs.”

The AHA was also concerned about multiple reports about “outrageous” rate hikes from nurse staffing agencies that “appear to be naked attempts to exploit the pandemic by charging supercompetitive prices to desperate hospitals.”

Hospitals across the country are reporting higher labor costs and have turned to nurse staffing agencies to shore up staff as they fight COVID-19.

The AHA said it has received reports from hospitals that nursing agencies are engaged in anticompetitive prices.

“While the nurse staffing agency industry too often blames hospitals for driving up the rates, the fact is that hospitals are in dire need of nursing staff to care for their patients and have little choice but to pay the rates demanded and refrain from complaining publicly for fear of being cut off from the supply of travel nurses,” the association wrote to the FTC.

It called for the FTC to use its authority to investigate the price hikes.

The AHA also called the FTC’s study into the impact of physician group and healthcare facility consolidation flawed.

“The insurers from which the FTC seeks data have substantial market power, a fact that the FTC does not appear to plan to investigate,” AHA said.

The comments come as the FTC is turning up the heat on hospital mergers. Methodist Le Bonheur and Tenet called off a plan for Methodist to buy two Tenet-owned hospitals in Memphis, Tennessee, after the FTC sued to halt the deal for fear it would raise prices and reduce competition for consumers.

A federal judge also blocked the agency’s bid to stop Thomas Jefferson University’s acquisition of the Albert Einstein Healthcare Network. The FTC wanted to halt the $599 million deal over antitrust concerns.