Healthy Competition for Better Care Act
- Sponsor
- Rep. Arrington, Jodey C. [R-TX-19]
- Committees
- Ways and Means Committee (primary)
- Last action
- Nov 21, 2025
Bottom line
This bill aims to enhance competition in healthcare by banning specific contractual clauses that currently limit health plans' flexibility to design networks and negotiate lower prices, with the goal of increasing access to more affordable care for consumers.
What it actually does
This bill amends the Public Health Service Act, the Employee Retirement Income Security Act of 1974 (ERISA), and the Internal Revenue Code (IRC) to prohibit certain anticompetitive contract terms between group health plans or health insurance issuers and 'covered entities' (healthcare providers, networks, or third-party administrators). Specifically, it bans clauses that restrict plans from steering patients to other providers, require plans to contract with affiliates, mandate payment rates for non-party affiliates, or prevent other plans from paying lower rates. It includes exceptions for certain health maintenance organizations (HMOs) and value-based network arrangements.
Proponents argue
Proponents argue that these anticompetitive contract terms inflate healthcare costs and restrict patient choice by preventing health plans from directing beneficiaries to higher-quality, lower-cost providers. They contend that banning such clauses will foster a more competitive market, leading to greater transparency, innovation, and ultimately, more affordable and accessible healthcare for consumers.
Opponents contend
Opponents might argue that these contract terms are necessary for providers to maintain stable networks and ensure adequate reimbursement, especially for smaller or specialized providers. They could contend that restricting these terms might disrupt existing care coordination, reduce provider leverage in negotiations, and potentially lead to narrower networks or compromise the financial viability of certain healthcare entities, ultimately harming patient access or quality of care.
The bill is concise and directly addresses specific contractual practices, making it relatively accessible for an informed reader to understand its core intent and mechanisms within a short timeframe.
Section 2(a)(1)(A) (PHSA), 2(a)(2)(A) (ERISA), 2(a)(3)(A) (IRC) - specifically (1)(A) in each new subsection (b)
Prohibiting Restrictions on Health Plan Network Design and Patient Steering
This provision bans agreements between health plans/issuers and 'covered entities' (providers, networks, TPAs) that prevent the plan from directing or incentivizing participants to use other healthcare providers not part of that specific agreement. It also prohibits clauses that stop plans from offering incentives for using specific health care providers. The goal is to give plans more flexibility to guide patients towards cost-effective or high-quality options, fostering greater competition among providers.
Supporters argue
Supporters argue this provision directly tackles anti-competitive practices that drive up healthcare costs. By allowing plans to steer patients to more efficient providers, it encourages price competition and innovation, ultimately benefiting consumers with lower premiums and out-of-pocket costs.
Critics contend
Critics may argue that this provision could lead to 'race to the bottom' pricing, potentially compromising quality of care if providers are forced to cut corners to compete on price. They might also contend it could disrupt established patient-provider relationships and make it harder for smaller providers to compete against larger systems.
Tradeoffs
The provision balances the desire for increased competition and lower costs against concerns about potential impacts on provider stability, quality of care, and patient choice within established networks.
Section 2(a)(1)(A) (PHSA), 2(a)(2)(A) (ERISA), 2(a)(3)(A) (IRC) - specifically (1)(B), (C), and (D) in each new subsection (b)
Prohibiting Contractual Linkages and Rate Restrictions ('All-or-Nothing' and 'Most Favored Nation' Clauses)
This provision bans agreements that require a health plan to contract with a provider's affiliates, agree to payment rates for affiliates not party to the agreement, or prevent other plans from paying a lower rate for services than the plan involved in the agreement. These are commonly known as 'all-or-nothing' or 'most favored nation' clauses, which can limit negotiation flexibility and competition.
Section 2(a)(1)(A) (PHSA), 2(a)(2)(A) (ERISA), 2(a)(3)(A) (IRC) - specifically (2) in each new subsection (b)
Exemptions for Specific Value-Based and Exclusive Network Models
This provision carves out exceptions to the network steering restrictions for certain types of health maintenance organizations (HMOs) that operate primarily through exclusive contracts with multi-specialty physician groups. It also exempts value-based network arrangements, such as exclusive provider networks (EPNs), accountable care organizations (ACOs), or centers of excellence, ensuring that legitimate integrated care models focused on quality and cost efficiency are not inadvertently penalized by the new prohibitions.
Section 2(a)(1)(B), 2(a)(2)(C), 2(a)(3)(C) (Regulations); Section 2(b) (Effective Date)
Rulemaking Authority and Implementation Timeline
The bill directs the Secretaries of Health and Human Services, Labor, and the Treasury to promulgate regulations within one year of the Act's enactment to implement the new prohibitions. The amendments will apply to any contract entered into, amended, or renewed on or after the date that is 18 months after the date of enactment, providing a transition period for affected parties to adjust their agreements.
A rule of construction clarifying that, apart from the specific prohibitions in paragraph (1), nothing in the subsection limits network design or cost/quality initiatives by a group health plan or health insurance issuer, including accountable care organizations, exclusive provider organizations, networks that tier providers by cost or quality, or other pay-for-performance programs.
Section 2(a)(1)(A) (PHSA), 2(a)(2)(A) (ERISA), 2(a)(3)(A) (IRC) - specifically paragraph (4) in each new subsection (b).
Why it matters:This is standard legislative practice to provide clarity and prevent unintended interpretations or challenges to existing beneficial practices. It aims to ensure the bill's intent to ban specific anticompetitive practices is not misconstrued as a broader attack on legitimate network design or value-based care initiatives.
Case for: Supporters would argue this clause is essential for legal clarity, ensuring that the bill's intent to ban specific anticompetitive practices is not misconstrued as a broader attack on legitimate network design or value-based care initiatives. It protects innovation while targeting abuse.
Case against: Critics might argue that such a broad 'rule of construction' could be used to argue for interpretations that weaken the primary prohibitions, allowing some entities to continue practices that are functionally similar to those banned, under the guise of 'network design flexibility.'
Estimated impact: Clarifies the scope of the bill, potentially reducing litigation and ensuring that beneficial network designs are not inadvertently curtailed, thereby supporting the continued development of value-based care models.