S. 4027 bans health insurance companies and employer health plans from entering into contracts with healthcare providers that restrict their ability to direct patients to lower-cost or higher-quality alternatives or offer incentives to use specific providers. The bill targets anticompetitive contract terms that prevent insurers from steering patients to competing doctors or facilities, force insurers to accept unfavorable payment rates for provider affiliates, or prevent other insurers from negotiating better rates. The legislation applies to group health plans, individual insurance coverage, and self-insured employer plans regulated under federal law. Key exceptions preserve traditional health maintenance organizations (HMOs) with exclusive physician networks and value-based arrangements like accountable care organizations and centers of excellence. The bill takes effect 18 months after enactment, and federal agencies must issue implementing regulations within one year, while states may grandfather existing contracts signed before December 31, 2020, for up to ten years if they determine the contracts don't substantially harm competition.
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