Idaho introduced a number of bills in the 2018 legislative session aimed at promoting price transparency and controlling healthcare costs. While most failed to pass, the legislature passed the Idaho Free Market Insurance Act (SB 1288), which allows individuals to lower their health insurance costs by making available competitive health plans from out-of-state insurance companies. The state also passed SB 339, which amends the Pharmacy Practice Act to enable lower cost substitution for prescription drugs that are in the same therapeutic class. In the 2016 legislative term, Idaho proposed but did not pass healthcare transparency legislation that would have required health insurers on the state’s ACA exchange to disclose a range of specific information.
The state currently has a ban on most favored nation clauses. A most favored nations clause is an agreement between a payer (such as an insurance company) and a provider that typically requires a provider to give the payer the lowest rate that it gives to any other comparable payer, which can be anticompetitive as it encourages oligopolistic pricing by large payers and increases barriers for new entrants.
Idaho has also been active in antitrust enforcement, as the Idaho Attorney General joined with the FTC to challenge the acquisition of Idaho’s largest independent, multi-specialty physician group by St. Luke’s Health System. In that case, the Ninth Circuit held that the acquisition violated Section 7 of the Clayton Act and the Idaho Competition Act.
Idaho’s most recent legislative session ran from 1/8/2018 – 3/28/2018.
Recent Legislative Developments
|2018||SB 1289||PHARMACIES: Would require that pharmacy benefit manager register with the Director of the Idaho Department of Insurance. Would require pharmacy benefits manager to disclose any conflicts of interest. Would allow pharmacy beneift manager to substitute a lower priced generic or therapeutically equivalent drug for a higher priced prescribed drug but only if substitution is made for medical reasons or for reasons that benefit the covered individual. Would require the pharmacy benefit manager to disclose payment, or benefit derived from payment, or other financial benefit for from the dispensing of prescription drugs. Would require pharmacy benefit manager to disclose all financial matters that apply between it and any prescription drug manufacturer or labeler. Would prohibit pharmacy benefit manager from restricting a covered individual’s choice of pharmacy. Would establish transparency of covered drug lists and methodology that determines how reimbursement to pharmacies is calculated.||Inactive/Dead|
|SB 1336||PHARMACIES: Adds to existing law to provide for applicability, to provide for required practices for pharmacy benefit managers, to provide for enforcement, and to provide maximum allowable cost transparency requirements for pharmacy benefit managers. The purpose of this legislation is to establish a Pharmacy Benefit Manager Transparency Act so that pharmacies in Idaho have all the information needed to make operational business decisions. The legislation would create and give oversight of PBMs that operate in Idaho to the Idaho Department of Insurance (DOI), along with establishing transparency of the covered prescription drug lists and the methodology that determines how reimbursement to the pharmacies is ultimately calculated.||Inactive/Dead|
|SCR 145||PHARMACY BENEFIT MANAGERS: Stating findings of the Legislature and authorizing the Legislative Council to appoint a committee to undertake and complete a study of pharmacy benefit manager transparency.This resolution authorizes the Legislative Council to form an Interim Committee to resolve issues dealing with Pharmacy Bene t Managers, the Idaho Department of Insurance, and the Idaho Pharmacists, to help lower costs as other states have done.||Inactive/Dead|
|AN ACT MAKING CERTAIN HEALTH INSURANCE EXCHANGE INFORMATION AVAILABLE: would require the health insurers on the Idaho Exchange to make available the following information: (i) prescription drugs covered by the plan, including restrictions on use or quantity; (ii) out-of-pocket expenses; (iii) network providers; (iv) coverage for out-of-network providers; (v) rights of appeal when coverage is denied; and (iv) other information deemed pertinent by the Exchange.||Inactive/Dead|
|2018||SB 339||PHARMACY: This bill amends the Pharmacy Practice Act to enable prescriber-authorized substitution for drug products that are in the same therapeutic class and are expected to have a substantially equivalent therapeutic effect, provided certain conditions are met. Specifically, both the prescriber and patient must opt-in to the drug product substitution, and the substitution must intend to lower the cost to the patient. In addition, the pharmacist must notify the original prescriber when a substitution occurs.||Passed – signed by Governor 3/7/18 (Chapter 35 – effective 7/1/18)|
|SB 1288||OUT-OF-STATE INSURERS: Adds to and amends existing law to provide for interstate health insurance sales and to authorize out-of-state insurers to sell health insurance in Idaho under certain conditions.This legislation will establish the Idaho Free Market Insurance Act that will allow individuals and groups to lower their health insurance costs by making available competitive health plans from out-of-state insurance companies.||Passed– signed by Governor 3/20/18 (Chapter 166 – effective 7/1/18)|
|HB 495||HEALTH CARE BILLING EQUITY ACT: Adds to existing law to enact the Health Care Billing Equity Act. This medical services consumer protection bill protects patients who receive health care services in an in-network hospital, under their insurance plan, from being billed extra for out-of-network provider services. Patients admitted to a hospital for emergency or elective services with the understanding that it is a facility covered under their insurance policy are sometimes surprised to receive billings from out-of-network providers for care without the patient’s consent. This bill would preclude that practice except for elective care under certain conditions. In emergency situations, the out-of-network provider would be paid a specified rate by the patient’s insurance plan and prohibited from billing the patient for anything more than the normal deductible or copay required under the policy. In elective situations, the out-of-network provider may balance bill if an agreement for such service is signed by the patient prior to the day of admission.||Inactive/Dead|
|2018||HB 464||HEALTH CARE: Adds to and amends existing law to authorize application for a certain waiver, to provide that the Board of Directors of the Idaho Individual High Risk Reinsurance Pool shall take certain action, to provide medical assistance eligibility for certain individuals and to provide that the Department of Health and Welfare will establish certain premiums and work requirements. This legislation allows the Department of Insurance agency director to apply for and implement a 1332 State Innovation Waiver to provide equal treatment of Idaho citizens as legal non-citizens and allow Idaho families 0-100% of FPL to receive an Advance Premium Tax Credit and purchase private health insurance on Idaho’s Health Insurance Exchange (YHI).||Inactive/Dead|
|HB 338||HEALTH CARE: Adds to and amends existing law to authorize application for a certain waiver, to provide that the Board of Directors of the Idaho Individual High Risk Reinsurance Pool shall take certain action, to provide medical assistance eligibility for certain individuals and to provide that the Department of Health and Welfare will establish certain premiums. This legislation allows the Department of Insurance director to implement a 1332 State Innovation Waiver to allow individuals 0-100% of Federal Poverty Level (FPL) to apply for Advanced Payment of Tax Credits and purchase private health insurance on Idaho’s Health Insurance Exchange (YHI).||Inactive/Dead|
|HB 615||HEALTH CARE – Adds to existing law to provide that the Director of the Department of Insurance shall permit health benefit plans that are not ACA compliant, to provide a direct primary care program for Medicaid participants, and to provide that the State Department of Health and Welfare shall seek certain waivers or amendments to waivers.The new statute would provide flexibility from individual and small employer insurance plans requirement for essential health care benefits, state community and age ratings, and actuarial value regulations. Idaho insurance companies would be able to offer less-expensive, tailored insurance plans. It would also allow Idaho to apply for a 1332 State Innovation Waiver, only if the federal government requires a waiver for Idaho to sell non-ACA plans.||Inactive/Dead|
We compile state statutes relate to healthcare price and competition, including healthcare transparency, markets, and costs. For a complete listing of all health related statutes visit the State Health Practice Database for Research.
Transparency in Healthcare
- Idaho Code Ann. § 56-1054 creates a Health Quality Planning Commission within the Department of Health and Welfare to promote improved quality of care and improved health outcomes “through investment in health information technology and in patient safety and quality initiatives in the state of Ohio.” The Commission is charged with monitoring the Idaho Health Data Exchange, which facilitates clinical sharing of patient information between providers. The Commission is also recommending the creation of a hospital discharge database and an APCD (see below).
- Idaho Code Ann. § 41-3443 prohibits most favored nation clauses, or clauses having a similar effect, in an agreement between an insurance carrier and a participating provider. A most favored nations clause is an agreement between a payer (such as an insurance company) and a provider that typically requires a provider to give the payer the lowest rate that it gave to any other comparable payer, which can be anticompetitive by encouraging oligopolistic pricing by large payers and increasing barriers for new entrants.
- Idaho Code Ann. § 39-4903 permits the state attorney general to authorize cooperative agreements between health care providers by issuing a “certificate of public advantage” if the “likely benefits resulting from the agreements outweigh the disadvantages attributable to a reduction in competition that may result from such agreements.”
- Idaho Code Ann. § 56-263 directs the Department of Health and Welfare to present a plan for Medicaid managed care geared towards high-cost populations to sixty-first Idaho legislature (2011). The plan is to include, among other things, improved coordination of care through primary care medical homes, contracts based on risk-sharing or capitated payments, and the elimination of duplicative practices that result in unnecessary utilization and costs.
- The Idaho Competition Act can be found at Idaho Code Ann. § 48-01 et seq.
FY 2018 BUDGET
The fiscal year runs from July 1 to June 30. To view Idaho’s FY 2018 spending on health programs, click here.
- In February 2015, the Ninth Circuit Court of Appeal affirmed a district court opinion finding that the acquisition of Idaho’s largest independent, multi-speciality physician group by St. Luke’s Health System violated Section 7 of the Clayton Act and the Idaho Competition Act. The FTC and the Idaho Attorney General filed a complaint against St. Luke’s in March 2013, alleging that the acquisition would create a dominant single provider of adult primary care physicians in the Nampa, Idaho area, with almost 60 percent market share. For details, read the Source’s case summary and Blog post.