Healthcare leftovers pile up for year-end congressional menu 

A slew of bipartisan bills in Congress aimed at lowering healthcare costs are on the table for possible action during the lame-duck session after the dust settles on the November elections. These include proposals to reform Pharmacy Benefit Manager business practices, increase health plan, provider and hospital transparency and provider competition, require “site-neutral” provider billing practices in Medicare, extend pandemic-related telehealth flexibilities, lower prescription drug prices, and ease employers’ ACA reporting duties. 

The House and Senate left Washington to campaign last week with major legislation still pending, including twelve appropriations measures for fiscal 2025 that were kicked down the road by a stopgap spending bill that expires on December 20. Unfinished business must be completed in the five weeks remaining on the 2024 congressional calendar after Election Day, or things go back to square one in the 119th Congress. 

Healthcare issues with major implications for employer-sponsored plans will be in play for inclusion in any year-end package, though whether lawmakers can strike a deal will depend on post-election political dynamics and the size and scope of an agreement. If either party wins full control of Congress and the presidency starting in January, for example, that could result in a limited lame-duck agenda that punts many issues to next year.  

Here's a description and where things stand on a number of employer-focused healthcare proposals that could still be taken up in the last two months of 2024. 

PBM reforms. There is bipartisan momentum for reforming how PBMs do business, and numerous proposals are in play for potential year-end action. Any final legislation will likely draw from provisions overwhelming approved by the House in the Lower Costs, More Transparency Act (HR 5378), which passed the House in December 2023. The bill would mandate extensive semiannual PBM reports to plan sponsors with detailed information on rebates, drug spending, total out-of-pocket spending and formulary placement rationale, among other things. Another provision would require PBMs and third-party administrators to disclose extensive information about their direct and indirect compensation to plan fiduciaries. Similar legislation is pending in the Senate. 

Additional PBM reforms in the mix applicable to employer plans and/or public programs would delink list drug prices and PBM compensation in Medicare, ban “spread pricing” (a PBM charging a plan sponsor or insurer more than the amount reimbursed to the pharmacy dispensing the drug), and require that PBMs pass through all rebates, fees, and discounts directly to health plans. 

Speeding more generics to market and capping out-of-pocket costs for insulin for employer plans (similar to what has already been done for Medicare) are also bipartisan priorities that could make the cut. 

Increased transparency and provider competition. The Lower Costs, More Transparency Act would also implement more price and operational transparency in the healthcare industry. Provisions would codify and strengthen current price transparency rules for health plans and hospitals, including enhancing the transparency-in-coverage rules and requiring new price transparency for services like diagnostic lab tests, imaging, and ambulatory surgical centers owned by hospitals. 

The bill also advances “site-neutral” Medicare payment policies that plan sponsor groups hope lawmakers will extend to the commercial market at some point. These include proposals to require that Medicare and Medicare beneficiaries pay the same rates for certain physician-administered drugs in off-campus hospital outpatient departments and in physician offices, and that each off-campus hospital outpatient department include a unique provider identifier on claims for payment, which would help Medicare determine whether charges are appropriate. 

Another provision in the bill would strengthen the No Surprises Act’s gag clause prohibition by ensuring that employer plan sponsors are not contractually restricted from obtaining cost or quality-of-care data related to their own plans from service providers. 

Other House and Senate bills seek to expand transparency and encourage more provider competition by barring anti-competitive contract provisions that prevent plans from directing employees to higher-value, lower-cost providers, and by banning hospital facility fees for telehealth and certain other services. 

Many PBM and site-neutral reforms applying to Medicare and Medicaid are projected to raise substantial revenue that will be attractive to lawmakers looking for ways to pay for other healthcare priorities in a final package.  

Extension of telehealth flexibilities. Although bipartisan House and Senate bills would make permanent the pandemic-related relief that allows Health Savings Account-qualifying high-deductible health plans to cover telehealth and other remote care services on a pre- or no-deductible basis, any extension Congress might grant this year is likely to be temporary, at most for two years. Without an extension, the relief will expire on Dec. 31, 2024, for calendar-year plans (and during 2025 for noncalendar-year plans). 

There is broad support among lawmakers for extending the relief, though some Democrats have concerns that the policy might discriminate against communities facing obstacles to telehealth, such as a lack of broadband, and that HSAs favor more affluent individuals.  

Congress is not expected to take up separate telehealth legislation to extend the now-expired relief that treated stand-alone telehealth benefits and other remote care services for certain employees like an excepted benefit, exempt from many ERISA and ACA group health plan mandates.  

Eased employer ACA reporting duties. Bipartisan House-passed legislation would streamline employer reporting requirements under the ACA’s Employer Shared-Responsibility provisions and are potential riders on year-end bill. One measure would codify and expand existing IRS rules that excuse employers from having to mail paper copies of Forms 1095-B and Forms 1095-C to all employees if their website contains a “clear and conspicuous notice” that employees may receive paper copies on request. Another would allow substituting any covered individual's birthdate for the person's Taxpayer Identification Number if the reporting entity has been unable to collect that TIN, give employers more time to respond to proposed IRS assessments for alleged violations of the ESR rules, and set a six-year statute of limitations for ESR assessments. IRS’s current position is that no statute of limitations applies to ESR assessments. 

Employers planning for 2025 and beyond need to keep a close eye on the healthcare ramifications of the year-end congressional agenda.