How much power should health insurers have?

How much power should health insurers have?

The scope and content of Article 13 HIA and its impact on the private relationships between health insurers and patients and between health insurers and care providers.

Imagine a patient in need of non-urgent medical care. He has a health insurance policy that provides cover for his need for medical treatment through payments in kind or the reimbursement of costs. His insurance policy limits cover to care that is delivered by ‘preferred providers’, i.e. care providers (hospitals, psychologists, independent treatment centres, etc.) with whom the health insurer entered into a contract. What if the patient turns to a doctor he is familiar with, or who is recommended by his GP, but who does not have a contract with the patient’s insurer?

Article 13 of the Dutch Health Insurance Act (HIA) provides for such cases that the health insurer still has to pay ‘a reimbursement’. The Dutch Supreme Court recently held – referring to the legislative history of the provision – that the amount reimbursed for care provided by non-preferred providers may not be so low that it puts up a barrier (‘hinderpaal’) for a patient to turn to a non-preferred provider of his choice. In the case law of the lower courts it was established that a reimbursement of 75-80 percent of the competitive rate meets this standard.

In its proposal to amend Article 13 HIA, however, the government intended to abolish this mandatory reimbursement for non-preferred providers. The proposal has been subject to broad political and social debate which ended in a political crisis last Tuesday. This crisis hasn’t been entirely solved yet. What makes this Article and its proposed amendment so important?

The scope and content of Article 13 HIA has a large impact on the private relationships between health insurers and patients and between health insurers and care providers. Together with the medical treatment relationship, these relationships form a triangle of checks and balances that forms the cornerstone of the Dutch system for curative care. Article 13 limits the freedom of contract of health insurers and guarantees a patient’s freedom to be treated by the care provider of his choice. The article is equally important for care providers. If patients turn to providers who do not have a healthcare purchase contract with one or more insurers, the mandatory reimbursement helps these providers to survive. Hence the Article limits the power of health insurers to ‘direct’ the care offered by selectively contracting the best care providers in terms of quality and costs. Abolishment of the mandatory reimbursement would force patients to turn to preferred providers, unless they can afford the rates of a non-preferred provider, or a health insurance policy that allows for more freedom of choice. The ability of health insurers to fulfil their role as ‘directors’ of care would be improved, but the leverage of care providers would be (further) diminished.

After several amendments, the House of Representatives adopted the legislative proposal. The Senate submitted the proposal to the Council of State for advice, because of the social debate surrounding the freedom of patients to choose a care provider, but also because of literature that questioned the compatibility of the proposal with European internal market rules. Although the Council carefully stated that the proposed amendment of Article 13 HIA does not necessarily violate European Union law, aspects of EU law were questioned during the debate in the Senate. Not the EU law considerations, however, but the undesirability of the further expansion of the power position of health insurers seems to have been decisive in the downfall of the proposal. Despite the coalition agreement and other covenants, the proposal was surprisingly rejected by a majority of 38 to 33 votes, including three ‘no votes’ by senators who are member of the Labour Party (PvdA), one of the two parties currently in office.

After two nights of crisis meetings, the coalition has now presented a solution that would prevent the political crisis from getting out of hand. The whole proposal will be resubmitted to the House of Representatives. Certain amendments should meet the three Labour Party senator’s objections. What the amended proposal will look like is not clear yet, but in its letter to the House of Representatives prime minister Rutte emphasized two points. First, the present freedom to choose a care provider will be safeguarded. Does this mean that the coalition wants to deviate from the rejected proposal? Second, the position of patients against insurers will be reinforced by a couple of measures, but only one of them will be implemented by Acts of Parliament. Whether the Senate will approve the adapted proposal is going to be tight. For the coming weeks or months, however, it seems clear that all insurance policies that enter into force on the first of January should be compatible with the present Article 13 HIA. Hopefully the adapted proposal will provide more legal certainty about its compatibility with EU law. Furthermore it would be wise to take a close look (again) at care providers’ remedies against powerful health insurers and not only the ability but also the willingness of patients to monitor these health insurers.


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