Bipartisan legislation seeks to increase healthcare price transparency
Facilities and insurers would be compelled to list the prices they charge patients and PBMs to disclose rebates and discounts.
Photo: John Baggaley/Getty Images
New bipartisan legislation intended to increase healthcare price transparency and lower overall costs for patients and employers was introduced late last week in the U.S. House of Representatives, and seeks to provide patients with accurate information about the cost of procedures and services.
The Lower Costs, More Transparency Act was introduced by House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Ranking Member Frank Pallone, Jr. (D-NJ), House Ways and Means Committee Chair Jason Smith (R-MO), and House Education and the Workforce Committee Chair Virginia Foxx (R-NC).
The bill requires healthcare price information from hospitals, insurance companies, labs, imaging providers, and ambulatory surgical centers, which would be compelled to publicly list the prices they charge patients in machine-readable files. In a bid to lower costs for patients and employers, it would require health insurers and pharmacy benefit managers (PBMs) to disclose negotiated drug rebates and discounts.
On the prescription drug front, it purports to lower out-of-pocket costs for seniors who receive medication at a hospital-owned outpatient facility or doctor's office; expand access to more affordable generic drugs; and equip employers with drug price information that could help them get a better deal for employees.
Beyond that, it also claims to fully pay for investments into programs that strengthen the healthcare system, in part by funding community health centers and supporting training programs for doctors new to their communities.
It would also preserve Medicaid funding for hospitals that take care of uninsured and low-income patients, and extend funding for research to find better treatments and a cure for diabetes.
WHAT'S THE IMPACT
The bill has received pushback from the Pharmaceutical Care Management Association (PCMA), which said it would do nothing to reduce the cost of prescription drugs for patients and would instead "hand Big Pharma even more power to rig the system to keep prices high and boost their own profits."
The group said targeting PBMs in particular would imperil efforts to lower drug costs.
"Throughout this year as Congress has considered various pieces of legislation narrowly focused on pharmacy benefit companies, we've asked the question of whether those bills would do anything to lower drug prices and improve affordability," said PCMA President and CEO J.C. Scott in a statement. "Unfortunately, when looking at the latest draft legislation in the House, the answer is a definitive 'no.' Instead of focusing on legislation that risks increasing drug costs, Congress should refocus on enacting policies that promote more competition in the prescription drug marketplace, including policies that eliminate common and egregious drug company practices aimed at extending patents in highly anti-competitive ways."
That the bill targets PBMs is unsurprising given the criticism they have drawn from legislators and the federal government. In July, the Federal Trade Commission voted to rescind its prior statements of advocacy for PBMs, calling it a response to PBMs' continued reliance on older FTC advocacy materials that opposed mandatory PBM transparency and disclosure requirements.
A year ago, after the FTC first announced its study into PBM practices, a number of pharmaceutical groups came out in favor of the inquiry. The American Pharmacy Cooperative approved of the FTC's move, saying it had long advocated for federal oversight of PBMs.
House Ways and Means Committee Chair Jason Smith (R-MO), one of the bill's sponsors, maintained it will bring "honesty and clarity to the cost of healthcare by requiring health insurers, hospitals, and PBM middlemen to be transparent about the prices they charge patients."
THE LARGER TREND
In April, the Centers for Medicare and Medicaid Services said it was cracking down on enforcing the price transparency rule through fines, saying it will now automatically impose a civil monetary penalty on hospitals that fail to submit a Corrective Action Plan at the end of the 45-day CAP submission deadline.
The final rule issued in 2019, which took effect in January 2021, establishes requirements for hospitals to establish, update and make public a list of their standard charges for the items and services that they provide.
A 2022 survey found that less than 20% of hospitals were in compliance.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
