Many States Can Conduct Robust Rate Reviews; Why Aren’t More Doing So?

Although a “healthy minority” of states have the authority to conduct enhanced reviews of proposed premium rates — in which they evaluate the rates that health insurers negotiate with providers — just a small handful are doing so, according to a new analysis.  

A variety of barriers are preventing state regulators from fully flexing their rate-review muscles, including industry opposition, according to one of the researchers who produced the analysis. And although that opposition historically has included insurers, there’s an argument to be made that the sector should change its tune. 

“I think the health plans should embrace this kind of regulation, because when you look at the hospital sector and how increasingly consolidated it is, and how so many hospitals and health systems are using their market power to demand ever-higher reimbursement rates in the commercial market…health plans are really powerless to push back, because these hospitals are must-have participating providers” in health plan networks, says Sabrina Corlette, co-director of Georgetown University’s Center on Health Insurance Reforms (CHIR).