California Democrat state Sen. Richard Pan, MD, has introduced legislation that would update healthcare price transparency and disclosure requirements to affect Kaiser Permanente.
A fact sheet included with the bill states that SB 343 would "create uniformity" by removing provisions that allow Oakland, Calif.-based Kaiser to report more limited data to state regulators compared to other health plans and healthcare facilities.
"Kaiser and all other health insurers and hospitals in California should play by the same rules for transparency," according to a statement by Dr. Pan. "Consumers need clear pricing and financial information so they are able to make informed choices regarding the value of their health coverage."
California requires health insurers and health plans to submit detailed data and actuarial justification for rate increases in the individual and small group markets, according to the fact sheet. They are also required to reveal aggregate rate increases in the large group markets.
The fact sheet says state regulators can't modify or reject rate changes, but "rate review" has improved transparency about the drivers of rising health insurance costs.
The rate review process requires that health plans report the projected trend factor by benefit category. But Kaiser is not included in having to report projected assumptions. Instead it's allowed to report actual experience for the prior benefit year "using categories that are, to the maximum extent possible, the same or similar to those used by other plans," according to the fact sheet.
California also requires hospitals to report revenue by payer and by revenue center for individual hospitals. But the fact sheet states that Kaiser hospitals may report costs and revenues as a group, meaning revenue is reported as a group for either Kaiser Permanente Southern California or Kaiser Permanente Northern California.
SB 343 would delete language that allows Kaiser to use a different method of reporting in individual, small group and large group health plan and health insurance rate filings. It would also delete language that allows Kaiser to use more limited and aggregated hospital financial reporting to state regulators.
Responding to the proposed legislation, Kaiser Vice President John Nelson said: "Kaiser Permanente is extremely transparent with our purchasers and regulators. Transparency is important to inform policies that can drive greater affordability, and we welcome the opportunity to review reporting requirements. We are not exempt from any disclosure or rate review laws. Current law simply recognizes the unique nature of our highly respected integrated delivery system. We have just begun our review of this bill and do not have a position at this time."
More articles on healthcare finance:
1 in 5 rural hospitals at high risk of closing, analysis finds
National healthcare groups urge Congress to delay Medicaid disproportionate share hospital cuts
3 hospital revenue cycle leaders predict how price transparency will affect healthcare