Nonprofit hospitals’ exemption from Virginia’s little-known anti-monopoly law came under surprise attack Wednesday, when state Sen. Frank Wagner, R-Virginia Beach, quietly asked colleagues for special permission to file a bill after the legislature’s filing deadline.
It was a muted foray — all Wagner told fellow senators was that he wanted to introduce legislation to address an exemption in the antitrust law, without mentioning hospitals or the big weight they swing in the halls of the General Assembly.
It was only after the Senate adjourned for the day that he let slip that the bill he plans to file would end nonprofit hospitals’ exemption from Virginia’s Antitrust Act, an obscure body of state law barely touched since its codification in 1974.
The move took the state hospital association by surprise. Even by the end of the day, Virginia Hospital and Healthcare Association spokesman Julian Walker said the group had had no word about the measure or Wagner’s intentions and couldn’t comment.
Wagner, who said he had not discussed his plan with any hospitals, said his aim is to tackle rising health care costs.
“That’s the No. 1 issue for voters,” he said.
Wagner thinks legislators and regulators need to shift attention from the health insurance companies that pay for coverage to the prices quoted by those who provide health care, especially the largest entities that have the power to dictate prices.
That’s why he turned to the state antitrust law and its exemption for hospitals, he said.
“This was there for the Little Sisters of the Poor and small community hospitals, but now we’ve got these Inova, Sentara and Carilion monsters,” Wager said, referring to the hospital, clinic and doctor office combinations that play leading roles in providing health care in Northern Virginia, Hampton Roads and Roanoke.
Wagner said the lack of competition resulting from the growth of such health care giants is hurting patients.
“That’s why we’ve had antitrust laws … monopolies tend to drive up prices” he said.
Virginia’s law says monopolies are illegal, as is any attempt to form one. It also prohibits contracts that restrain trade and practices that discriminate in price among different customers.
The results of negotiations between hospitals and health insurers over discounts hospitals offer insurers are among the most closely guarded secrets in the health care business.
Virginia’s law, however, says nonprofit hospitals can’t be charged with violations for actions that are directed to a reduction in services or an improvement in the quality of services, if such efforts reduce, stabilize or limit cost increases.
The hospital association says it encourages collaboration among members to promote high-quality care and patient safety. Those efforts most recently have resulted in guidelines to protect patient data and for prescribing opioids to combat the state’s current addiction crisis, he said.
The association has powerful allies among legislators and other groups that lobby the General Assembly.
Its push for Medicaid expansion, saying it is needed to stabilize hospital finances, won endorsements Wednesday from the chambers of commerce for Hampton Roads, Northern Virginia, Richmond, Roanoke, Charlottesville and Bristol.
But some legislators have pushed back, focusing on Virginia health regulators’ power to approve new hospitals and medical facilities and expansions of existing operations.
The issue has become a political flash point in the General Assembly in recent years.
Critics, including several leading General Assembly Republicans, say those so-called Certificate of Public Need regulations keep potential competitors from offering services that could force hospitals to bring down their prices.
Hospitals argue that such would-be competitors target the most profitable lines of business, the ones that hospitals rely on to help keep costly services such as OB-GYN, psychiatric wards and emergency rooms affordable.
This year, legislators have introduced eight different bills seeking to trim the scope of the Certificate of Public Need program.