Senate Committee advances comprehensive drug pricing and medical billing legislation out of Committee. The legislation, supported by members on both sides of the aisle, is likely to be the most comprehensive healthcare legislation to make it to the President’s desk in 2019.

In June 2019, the Lower Health Care Costs Act passed out of the Senate Health, Education, Labor, and Pensions (HELP) Committee with a vote of 20-3. “[I]nstead of remaining stuck in a perpetual partisan argument over Obamacare and health insurance, senators are working across party lines to lower the costs of what Americans pay for health care out of their own pockets,” said Senate HELP Committee Chairman Lamar Alexander (R-TN). The truly bipartisan legislation has garnered support of Senate Leadership, including Senate Majority Leader McConnell and Minority Leader Schumer. Though the legislation focuses on drug pricing and surprise medical billing, it also includes various other provisions relating to public health, as well as healthcare provider and insurer requirements.

Cutting Costs: Elimination and Reduction

Title I of the bill is dedicated to the elimination of surprise medical billing, focusing on protecting individuals from out-of-network deductibles in emergencies, and from being billed for out-of-network ancillary services unexpectedly. Title II establishes cost-saving measures by reducing prescription drug pricing – providing timely access to generic drugs and directs manufacturers to submit a report justifying planned price increases. The report, outlined in Section 215, establishes a fine for noncompliance and requires a manufacturer to list expenditures on R&D, patents, materials and all other costs associated with developing the drug.

Transparency in American Healthcare: Indirect Approaches to Minimizing Cost to the Consumer

A secondary focus of the bill is on improving transparency in healthcare processes in the US. Title III aims to improve healthcare transparency processes through clearer expectations for healthcare industry participants. Section 309 requires in-network providers and health plans to provide patients good faith estimates of their out-of-pocket costs for specific healthcare services, as soon as practicable and not later than two business days of the request. Violations of the requirements of this section can subject a healthcare provider to a civil monetary penalty of not more than US$10,000 for each violation.

Additional sections encourage transparency through additional regulation in some cases, and in others, regulation reduction. For example, Section 301 removes red tape for pharmacists and healthcare providers, allowing providers to discuss medication options and pricing with patients. Section 305 creates strict requirements that patients must receive a list of services rendered within five calendar days after discharge and a bill must be delivered within 45 days, or the healthcare practitioner or facility must refund the patient in full plus interest. In addition, certain violations of the requirements of this section can subject a healthcare practitioner or facility to a civil monetary penalty of up to US$10,000 a day.

Improvements to Public Health: Preempting Healthcare Costs

Title IV aims to improve US public health through innovative prevention programs and, in Title V, improving the exchange of health information. Provisions focused on tobacco, vaccines and additional training for healthcare providers are indicative of attempts to minimize the number of health issues and, thus, the amount of healthcare-related costs. Section 414 would follow the lead of 16 states to increase the federal minimum age to purchase tobacco from 18 to 21. Section 401 instructs the CDC to award grants to outside organizations to conduct national, evidence-based campaigns on the importance of vaccines, targeting communities with low vaccination rates. Section 407 establishes grant programs to facilitate healthcare provider training programs focused on reducing and preventing discrimination in the provision of healthcare services related to prenatal, labor and postpartum care.

Bicameral Action

The Senate Finance is considering a bill to limit price increases for drugs in Medicare and add an out-of-pocket maximum for beneficiaries on Medicare’s prescription benefit program (part D). A recent Congressional Budget Office cost estimate predicated the legislation would lower consumer and government costs.

The House is pursuing similar legislative efforts. H.R. 2296, the FAIR Drug Pricing Act, is nearly identical to Section 215 of the Lower Health Care Costs Act, requiring manufacturer justifications and reports on drug price increases. H.R. 3630, the No Surprises Act, mirrors many of the provisions of Title I of the Lower Health Care Costs Act, offering broad protections to patients by placing new requirements on healthcare providers and insurers.

On July 23, a policy aid for House Speaker Pelosi indicated a bill requiring the government to directly negotiate prices in Medicare (as compared to the current practice of insurers negotiating drug prices) will work through regular order in the House beginning in September. Provisions of House legislation could be combined into the Lower Health Care Costs Act should the legislation move to Conference between the two Chambers.