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Bipartisan draft legislation from leaders of the Senate Health, Education, Labor and Pensions (HELP) Committee seeks to lower overall healthcare costs and provide patients relief from surprise medical bills. The plan from Chairman Lamar Alexander, R-TN, and ranking member Patty Murray, D-WA, incorporates elements of Mercer’s March 1 letter responding to the committee’s request for comments. A broad array of proposed reforms aims to lower drug prices, increase transparency, foster greater electronic exchange of health information and improve public health. The provisions targeting surprise medical bills and drug prices join a growing list of similar proposals in Congress.
Surprise medical bills often happen when a patient receives emergency care at an out-of-network hospital or nonemergency care from an out-of-network doctor who provides services at an in-network facility. The draft Lower Health Care Costs Act of 2019 would amend existing Affordable Care Act (ACA) protections to cover not only out-of-network emergency services but also nonemergency services received from out-of-network providers at in-network facilities. The protections would apply broadly to nongrandfathered group health plans — whether insured or self-funded — and individual policies. States could continue to maintain laws addressing surprise bills, but self-funded ERISA plans would be exempt from those laws.
On the contentious issue of how to resolve payment disputes with providers, the committee hopes to settle on one of three approaches outlined in the draft before sending a bill to the full Senate:
Employer groups strongly oppose the arbitration option favored by providers and are advocating for reimbursement tied to in-network rates.
Other Surprise Medical Bill Measures in Play
Other bipartisan Senate and House proposals target eliminating surprise medical bills. Examples include:
More proposals may be coming. At recent hearings held by the House Ways and Means Committee and the Education and Labor Committee, plan sponsor representatives from the ERISA Industry Committee and the American Benefits Council offered input on ways to tackle surprise medical bills.
President Trump is prodding Congress to pass legislation preventing surprise medical bills and recently released a set of broad principles largely aligned with lawmakers’ ideas. However, the White House reportedly opposes using arbitration to settle payment disputes.
The HELP Committee’s wide-ranging proposal also seeks to rein in healthcare costs through drug-pricing reforms, various healthcare transparency and IT interoperability improvements, and targeted public health initiatives. Here are some provisions highlighted in a committee-prepared section-by-section bill summary.
Drug-Pricing Reforms
Much like a bill already approved by the House, the draft Senate HELP bill focuses on getting generic drugs to market more quickly, such as by cracking down on brand-name drug makers’ efforts to delay cheaper generic competition. The measure would also help speed development of biologic and biosimilar products and encourage their use when appropriate.
Committee leaders are also working on two measures that could become part of this legislation. The Prescription Drug Rebates Reform Act (S 1384) would require setting all patients’ coinsurance for drugs as a percentage of net price, rather than list price. The Fair Accountability and Innovative Research Drug Pricing Act (S 1391) would require drug manufacturers to report certain price increases to the Department of Health and Human Services.
Improving Transparency
The proposal takes aim at “anti-competitive” practices in the healthcare industry and would ban “anti-tiering” and “anti-steering” clauses in contracts between providers and plans. These clauses restrict plans’ ability to create “preferred” in-network tiers that direct or incentivize patients to use providers and facilities with higher quality and lower prices.
The bill would also prohibit a pharmacy benefit manager (PBM) from charging plans and patients more for a drug than it cost the PBM, known as “spread pricing.” PBMs would also have to pass on 100% of any rebates or discounts to the plan sponsor.
Health plans would have to maintain up-to-date provider directories. Both plans and providers would have to give estimates of a patient’s expected out-of-pocket costs within 48 hours of a request.
More Effective Use of Health IT
Numerous provisions aim to make health data more available to consumers and researchers, including patients’ access to their own health claims information. Other reforms would strengthen the security of health-related information.
Public Health Measures
The draft bill would create a national campaign to increase vaccination rates, expand the use of technology to help patients in rural and underserved areas, and authorize funding to improve the quality of maternal care and prevent pregnancy-related deaths.
Alexander says he hopes to move a version of the Lower Health Care Costs Act out of the HELP committee this month and through the Senate by July. The senator, who prefers a bipartisan approach to legislating, is intent on Congress taking action to address healthcare costs before he retires when his term ends in 2020.
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