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To increase transparency, lawmakers propose searchable health care ownership database

By Abigail Ruhman, IPB News | Published on in Business, Government, Health, Politics
HB 1327 would require hospitals, physician group practices, insurers, third-party administrators, and pharmacy benefit managers to report which parties have ownership or controlling interest, or interest as a private equity partner. (Brandon Smith/IPB News)

Lawmakers want to create more transparency around health care ownership using a searchable database. A new bill would require health care companies to disclose their owners in a report to the Indiana Department of Health.

HB 1327 would require hospitals, physician group practices, insurers, third-party administrators and pharmacy benefit managers to report which parties have ownership or controlling interest, or interest as a private equity partner.

Gloria Sachdev, president and CEO of the Employers’ Forum of Indiana, said this increases transparency as private equity investment firms continue to take on more of the health care space.

“Ownership transparency is brand new,” Sachdev said. “We don’t know who owns these physician groups.”

Sachdev said people in Indiana deserve to know when they are going to a hospital or physicians group owned by a private equity group because it can have a lower quality of care. One study found private equity acquisition of hospitals was associated with increased “hospital-acquired conditions.”

The bill would also give employers more information about pharmacy benefits as lawmakers seek to increase health care transparency. It would allow contract holders to audit third-party administrators in charge of pharmacy benefits.

READ MORE: Committee makes final recommendations to address Indiana’s high health care costs

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Contract holders could request detailed data on pharmacy claims from third-party companies — known as pharmacy benefits managers — and insurance providers twice a year, rather than once a year.

Natalie Robinson, the Indiana state director for the National Federation of Independent Businesses, said that data could empower employers to improve the management of plans and reduce costs.

“They’ll be more empowered to evaluate contracts better and make more informed decisions about their plan design,” Robinson said. “They can also compare and negotiate prices with other sources to ensure they’re getting the best deal possible.”

The bill outlines what can be requested in the audit and the responsibilities of the pharmacy benefit manager to fulfill the audit. The pharmacy benefit manager would not be allowed to charge a fee for an audit requested under the bill.

The measure was based on recommendations from the Health Care Costs Oversight Task Force.

The House Public Health Committee moved the bill forward and it now moves to the full House for consideration.

Abigail is our health reporter. Contact them at aruhman@wboi.org.