Uncertainty persists for bipartisan PBM, transparency reforms 

The bipartisan effort in Congress to lower healthcare costs through increased transparency and competition is facing some headwinds, though the depth of support for many reforms still gives them a good chance of becoming law this year. 

Recently unveiled House legislation that draws provisions from bills approved earlier this year by three committees was pulled from a planned floor vote last week amid government funding negotiations and some lingering divisions among committee leaders. The package of pharmacy benefit manager (PBM) reforms, price transparency, and hospital billing changes – The Lower Costs, More Transparency Act (HR 5378) – contains many consensus items, but leaves out transparency provisions aimed at private equity ownership supported by some Democrats. A modified version of HR 5378 could come up again for a House vote soon once lawmakers resolve this and other differences.  

A new version of the bill could add new proposals aimed at PBMs but will likely retain many reforms affecting employer-sponsored plans. These include required semi-annual reports from PBMs to plan sponsors with extensive information on rebates, drug spending, and formulary placement rationale, among other things. PBMs would also have to disclose all direct and indirect compensation. 

The bill as currently drafted would implement more price and operational transparency across the healthcare industry, such as codifying and strengthening current price transparency rules and requiring new transparency for services such as imaging and for care provided by ambulatory surgical centers owned by hospitals. The government would be directed to produce reports on how well current transparency reporting obligations are working and the feasibility of adding quality-of-care metrics to the requirements.  

Another provision would strengthen the No Surprises Act’s gag clause prohibition by ensuring that employers are not contractually restricted from obtaining cost or quality data from service providers related to their own plans.  

The Senate, meanwhile, is forging its own path on transparency and encouraging more provider competition. A bill passed last week by the Health, Education, Labor, and Pensions (HELP) Committee (S 240) would bar anticompetitive contract provisions that prevent plans from directing employees to higher-value, lower-cost providers, require off-campus hospital outpatient departments to provide a unique identifier on all bills, and ban hospital facility fees for telehealth and other services. 

PBM reforms already approved by the HELP Committee (S 1339) include extensive annual disclosures by PBMs to plan sponsors about rebates and fees received from drug makers, a requirement that all rebates or discounts be passed through to the health plan, and a ban on “spread pricing.” The bill would also stipulate that PBMs disclose all sources of compensation and require the Department of Labor to study whether PBMs should be health plan fiduciaries. 

Senate leaders say passing a drug pricing package this year is a high priority, and the legislation they might bring to the floor will probably draw from these committee-passed measures.   

Virtually all these reforms have strong backing from the plan sponsor community, and while they are drawing fire from PBMs and providers, the breadth of bipartisan support for them suggests that many could get to the president’s desk this year even though the legislative path ahead is uncertain.