backU.S. House of Representatives Passes Health Care Price Transparency Bill
On December 11, 2023, the U.S. House of Representatives passed H.R. 5378, the Lower Costs, More Transparency Act (the Transparency Bill). The Transparency Bill would increase price transparency requirements for hospitals, insurers, and pharmacy benefit managers (PBMs). The Transparency Bill is comprised of four titles: (1) Title I—Improving Health Care Transparency, (2) Title II—Reducing Health Care Costs for Patients, (3) Title III—Supporting Patients, Health Care Workers, Community Health Centers, And Hospitals, and (4) Title IV—Increasing Access to Quality Health Data and Lowering Hidden Fees. Key provisions from each title are summarized below.
Title I—Improving Health Care Transparency
- Hospital Price Transparency– Hospitals would be required to publish all standard charges for each of the hospital’s items and services, in a consumer-friendly format. The charges include the gross charge, discounted cash price, and payor-specific negotiated charges.
- Clinical Diagnostic Lab Tests Price Transparency– Applicable laboratories would be required to publish the cash prices and deidentified minimum and maximum payer-specific negotiated charges for clinical laboratory tests.
- Imaging Price Transparency– Imaging services providers would be required to publish the discounted cash prices and deidentified minimum and maximum payer-specific negotiated charges for specified services.
- Ambulatory Surgery Centers (ASCs) Price Transparency– ASCs would be required to make public the standard charges for all items and services and information on the prices for specified services.
- Pharmacy Benefit Price Transparency– PBMs would be required to provide specified employers detailed data on the drugs for which a claim was filed semiannually.
- Reports on Integration in Medicare– Medicare Advantage organizations would be required to report information, including incentive-based payments.
Title II—Reducing Health Care Costs for Patients
- Generic Drug Applications– New generic drug applicants would be informed of whether the drug is the same as the listed drug. If the proposed drug is not the same as the listed drug, the ingredients that are not the same will be disclosed.
- Spread Pricing– PBMs that contract with the State are prohibited from spread pricing. Spread pricing occurs when PBMs reimburse pharmacies at a lower rate than the rate at which a health plan pays them, thus enabling the PBM to retain the “spread.”
- Equal Payment in Hospital Outpatient Departments and Physician Offices– Equal payments would be required for certain services provided by an off-campus outpatient department of a provider.
Title III—Supporting Patients, Health Care Workers
- Community Health Centers– Funding would be extended for community health centers through calendar year 2025. The proposed funding is $4.4 billion for fiscal year 2025.
- Extension of Special Diabetes Program– Special diabetes programs for Type 1 diabetes and the Special Diabetes for Indians Program would be expanded.
- Delaying Certain Disproportionate Share Payment Cuts– The reductions in disproportionate share hospital allotments and payments would be delayed until 2026.
- Medicaid Improvement Fund– $7 billion would be eliminated in funding for the Medicaid Improvement Fund.
Title IV—Increasing Access to Quality Health Data and Lowering Hidden Fees
- Health Data and Hidden Fees– Requirements for PBMs and third-party administrators to disclose compensation to plan fiduciaries would be increased. The Transparency Bill would also prohibit preventing pharmacists from communicating lower-cost drug options to patients.
The Transparency Bill can be found here.
Reporter, Lindsay Greenblatt, Los Angeles, +1 213 218 4032, lgreenblatt@kslaw.com.
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