House passes most favored nation ban

A proposal to ban a controversial provision used in contracts between health care providers and insurance companies passed the House by a vote of 140-0 Thursday. It now goes to the Senate.

The provision, known as a most favored nation clause, requires a hospital or health care provider to give an insurance company the lowest rates it offers. Hospitals and physicians lobbied for the ban, saying the clauses are unfair and anti-competitive. The insurance company ConnectiCare also supported the bill, arguing that it creates an uneven playing field among insurers.

Anthem Blue Cross and Blue Shield, which uses the provision in contracts, argued that the clauses benefit consumers by securing the lowest rates. The company also noted that no federal or Connecticut courts have found the clauses to be illegal or anti-competitive.

During a debate on the proposal, Rep. Christopher D. Coutu, R-Norwich, said the bill raised questions about how much government should get involved in contract issues. But he ultimately supported the measure. Rep. Susan M. Johnson, D-Windham, and Rep. Jason D. Perillo, R-Shelton, called the provisions anti-competitive.

Several other states have already banned or restricted most favored nation clauses. The U.S. Department of Justice filed an antitrust lawsuit against Blue Cross and Blue Shield of Michigan over its use of most favored nation clauses.