End to regulatory holiday for healthcare insurers: are NZa and ACM finally setting their sights on healthcare insurers?

The Dutch Healthcare Authority (“NZa”) supervises both healthcare providers and healthcare insurers under the Wet marktordening gezondheidszorg (Healthcare (Market Regulation) Act (the “Act”). In accordance with Article 3(4) of the Act, the NZa puts the interests of consumers first and foremost in its supervision. We noted in earlier blogs already that the NZa fails to take effective action when healthcare insurers violate the NZa Regulations on the Provision of Information by Healthcare Insurers to Consumers (“Regulations on the Provision of Information by Healthcare Insurers”), to the detriment of consumers. The NZa is also not prioritising the enforcement of the duty of care that healthcare insurers have. As a result, waiting lists and the policy jungle continue to exist. This is a worrying development. The past fifteen years have given rise to the impression that the NZa and ACM have given healthcare insurers a “regulatory holiday” (see also this article). Is a break with this trend imminent or not? The NZa recently sent the Minister for Medical Care a letter about the NZa’s actions before and during the 2020-2021 switching period (the “Letter”). In the Letter, the NZa identified several violations by healthcare insurers of the Regulations on the Provision of Information by Healthcare Insurers. Instead of taking action, the NZa proposed a revision of the Regulations. It also did not rule out prioritising its supervisory activities differently. Will the NZa finally put consumers first in 2021, as the Netherlands Authority for Consumer and Markets (“ACM”) has done for years?

Violations identified by the NZa in the Letter

In the Letter, the NZa notes that one or more healthcare insurers did not have the following issues in order during the 2020-2021 switching season:

  • Late announcement of the contracted care services;
  • Incorrect provision of information on non-contracted care policies;
  • Inadequate implementation by healthcare insurers of a decision of the Dutch Trade and Industry Appeals Tribunal regarding non-contracted care policies;
  • Non-transparent provision of information to consumers on turnover caps;
  • Late announcement of premiums, meaning that three healthcare insurers violated Article 17(7) of the Zorgverzekeringswet (Healthcare Insurance Act);
  • An increase in the available policies. The NZa had stated several times already (see here and here, for instance) that it wanted to see clear-cut information on the policies offered. According to the NZa, that is not the case when several very similar policies are offered by one insurer or group of insurers, for instance under different policy names. This is also known as the policy jungle or the mere appearance of choice. We have written about this before: see here, here and here.

Double standards

The NZa takes a very different approach to established violations of the Regulations on the Provision of Information and the Healthcare Insurance Act that to violations of NZa rules by healthcare providers. It recently, for instance, imposed a large fine (EUR 270,000) on a healthcare provider for keeping incomplete accounts. The NZa also investigated Emergis for several years on its own initiative and then imposed an unprecedented set of Significant Market Power (“SMP”) measures on it (see also this blog). There is no reason why healthcare insurers should be allowed to continue to neglect their core tasks without any measures being taken against them, while healthcare providers are usually immediately warned or sanctioned by the NZa. It is also remarkable that when the NZa calls healthcare insurers to account for improper performance of their core tasks, the “glass is half full" approach is invariably followed; see, for instance, this report, this report and this report. The Letter is based on the same approach: the violations are evident and pertain to the healthcare insurer’s core tasks, but the NZa does not impose any sanctions and does not name the insurers involved. In the closing paragraphs of the Letter, the NZa states, among other things, that it “expects” healthcare insurers to do better. That is remarkable, in light of the fact that healthcare insurers have repeatedly violated mandatory rules of the NZa. Moreover, when a healthcare insurer sends a signal to the NZa that in its view one or more healthcare providers are not correctly informing consumers during the switching season, the NZa immediately takes decisive action. The NZa then issues a public warning to all healthcare providers, subject to a fine, not to provide misleading information. Remarkably, the NZa did so without first making it clear that one or more healthcare providers had violated statutory or mandatory NZa rules.

When will the NZa and ACM’s regulatory holiday for healthcare insurers end?

It is not the first time that the NZa reports violations by healthcare insurers of the Regulations on the Provision of Information by Healthcare Insurers (see here, for instance). Once again, no enforcement action is therefore being taken in this field. In the policy jungle, the NZa has so far done no more than urge healthcare insurers to reduce the number of policies. That is remarkable, because Article 40 of the Act has made it possible to impose sanctions in this field for 15 years already. In 2017, ACM and the NZa found in a joint report on the policy jungle that the NZa had not yet enforced existing rules, and suggested that the NZa do so (or do so more strictly) (see pp. 41 et seq.). Despite these findings, no such action has been taken to date, nor has the policy jungle shrunk. The Letter actually suggests it is expanding. That is harmful for consumers. A non-transparent healthcare insurance market creates the appearance of choice and complicates the selection process for consumer when they choose a healthcare insurance policy. That may be detrimental to switching to a truly competitive healthcare insurer, i.e. voting with one’s feet.

But attention is being paid to the provision of correct information and combating the appearance of choice. ACM is fully committed to combating the (online) misleading of consumers and tackling the appearance of choice in the case of sustainability labels. Although help in making sustainable choices is obviously of great importance, no mandatory products or services are involved. For years, ACM has been imposing (high) fines for violations of the rules that apply to the sale to consumers of non-mandatory products and services, for instance regarding rental agencies, bicycles, mobile contracts, kitchens and spam. More information on other actions of ACM to protect the interests of consumers can be found in this blog and at consumentrecht.info. It is striking, however, that ACM – with or without the NZa – has not intervened for years to combat the appearance of choice in the mandatory basic health insurance in order to curb the policy jungle (see also this blog). The contrast between the NZa and ACM’s enforcement activities when it comes to the sale of non-mandatory and mandatory products and services (basic health insurance) is therefore increasing by the day. This has made it possible for many years for healthcare insurers to allow the policy jungle to continue and apparently even to increase. It goes without saying that, in light of the annually mandatory basic insurance, consumers should be able to rely on it that regulators NZa and ACM take timely and effective enforcement action when violations are established. The fact that even now, in 2020/2021, healthcare insurers have still not properly organised essential and fundamental issues during the switching season is food for thought.

Enforcement has long been possible, but is again being postponed

Although it is encouraging that the NZa has expressed the ambition to start enforcing the Regulations on the Provision of Information by Healthcare Insurers in 2021, it distracts from what is currently going on. The question is why the NZa is waiting to take action until the Regulations on the Provision of Information by Healthcare Insurers are amended by the NZa. The NZa has not explained in the Letter why an amendment of those Regulations is required. For the sake of clarity: the NZa drew up the Regulations on the Provision of Information by Healthcare Insurers under Article 40(4) in conjunction with Article 38(7) of the Act and under Articles 37 and 62 of the Act. Article 85 of the Act provides that the NZa is therefore authorised to sanction violations of the Regulations on the Provision of Information by Healthcare Insurers by imposing an administrative fine. In other words, the NZa already had that authority. It does not require an amendment of the Regulations. Since the NZa established several violations of the Regulations on the Provision of Information by Healthcare Insurers in the Letter, it should have taken enforcement action (rather than await new Regulations). Moreover, the NZa has been able to take enforcement action for the past 15 years by applying Article 40 of the Act. By failing to take effective enforcement measures, for instance regarding the policy jungle and the duty of care (Article 11 of the Healthcare Insurance Act), problems in the healthcare system continue to exist. Healthcare insurers therefore find that their “regulatory holiday” has been extended indefinitely (see also this blog and this article). Not only has the NZa reported that it first wants to amend the Regulations on the Provision of Information by Health Insurers, it is also remarkable that the NZa has provided little information on how it intends to proceed and when the new Regulations on the Provision of Information by Healthcare Insurers will be ready.

Code of Conduct for Healthcare Insurers

It is clear that the NZa is not taking adequate enforcement action when legal standards are violated by healthcare insurers. But the NZa does set aside time and capacity every year to take enforcement action against healthcare providers – and that is not all. With regard to its supervision of healthcare providers, the NZa is actively speaking out against and drawing media attention to its lack of authority to include the Healthcare Governance Code in its NZa supervision. Be that as it may, the NZa has not demonstrated any active approach to the supervision of healthcare insurers these past 15 years. It has not commented, for instance, on a lack of authority under the Code of Conduct for Healthcare Insurers (the “Code of Conduct”). That is remarkable, because also the Code of Conduct sets out clear standards of conduct as to how healthcare insurers should act towards insured persons (consumers) and healthcare providers, among others. The Code of Conduct regulates, among other things, the correct provision of information on the contracted care services and clearly also applies before and during the switching season, of which the NZa itself has observed that it is open to improvement. And that makes sense, since it forms part of the core tasks of the healthcare insurers. If the NZa were able to enforce such provisions, that would provide additional instruments to achieve a transparent switching season in the interest of consumers. Healthcare insurers must obviously get their affairs in order in this respect. The fact that that is still not the case 15 years after the introduction of the Healthcare Insurance Act is cause for concern for various reasons.

The NZa often postpones or refrains from the fining of healthcare insurers. It first issues warnings for a long time (see here, here and here), if a violation of mandatory NZa rules established by the NZa is even sanctioned at all. As a result, healthcare insurers are not (or not easily) inclined to change their behaviour (see also here), simply because they have no need to fear NZa sanctions. That has a disastrous effect on the compliance by healthcare insurers with statutory and other mandatory rules.

Another concern here is that healthcare providers are once again seeing how the NZa and ACM protect healthcare insurers. That is harmful, for instance because it may give rise to the impression that the NZa is the “Netherlands Healthcare Insurers Authority” and that the NZa and ACM are unlikely to sanction healthcare insurers when statutory or other mandatory rules are violated. This may result in the NZa and ACM not receiving, or no longer receiving, signals or complaints from healthcare providers, because the healthcare providers or their agents believe that the NZa and ACM will not take enforcement action any way.

In sum, the NZa and ACM have a long way to go before healthcare insurers are effectively supervised, for instance regarding the policy jungle and the switching season. The amendment of the Regulations on the Provision of Information by Healthcare Insurers may of course help to achieve that aim. But the key question remains how regulators such as the NZa and ACM will exercise existing powers (and the proposed amended powers).

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