U.S. Senator Mike Braun has reintroduced his Drug Price Transparency Act and Health Care PRICE Transparency Act.
“As one of the leading voices on Capitol Hill for healthcare reform, I am proud to put forth much needed solutions to address rising prices and access challenges in several sectors of the health care industry,” said U.S. Senator Mike Braun. “These solutions will bring transparency to the healthcare system and in turn create more competition and drive down health care costs for Americans. Knowing the cost of health care will empower Americans to shop for the services best suited to their needs.
Drug Price Transparency Act
Pharmacy Benefit Managers (PBMs) act as middlemen between drug manufacturers and patients to administer prescription drug benefits and negotiate price concessions (or rebates). The current system allows for PBMs and insurers to retain rebates that should be passed along to patients. PBMs are pocketing an undisclosed portion of rebates, causing drug manufactures to raise prices to account for PBMs’ growing rebate retention. These misaligned industry incentives and opaque pricing maneuvers implemented by PMBs force patients to shoulder the burden of increasing drug prices.
This legislation would require insurers and PBMs to pass rebates directly to consumers enrolled in commercial health plans and Medicare Part D, which incorporates HHS’s Rebate Rule, finalized last year. This legislation would establish two new requirements to qualify for safe harbor for rebates: one for rebates which are passed on to patients at the point of sale, and the other for flat service fee payments made to PBMs, which cannot be tied to the list price of drugs. The intent of this legislation is to pass rebates directly to patients, which will allow drug manufacturers to lower list prices. This legislation would lower out-of-pocket payments for patients, lower prescription drug list prices, and increase drug price transparency.
Health Care PRICE Transparency Act
Hospitals and insurers have long taken advantage of the health care industry’s misaligned incentives that promote opaque pricing maneuvers over transparency to increase their profits at the expense of Americans. Increased price transparency would empower patients to make informed decisions to choose the health care that is best for them, as well as increase competition among all hospitals, group health plans, and insurance issuers in the individual and group markets to lower the cost and improve the quality of health care services.
The Health Care PRICE Transparency Act would codify two U.S. Department of Health and Human Services (HHS) final rules, Hospital Price Transparency and Transparency in Coverage. The Hospital Price Transparency rule would require hospitals to disclose standard charges, the cost of an item or service set by the hospital, for a total of 300 shoppable services. In order for a hospital to participate in Medicare, it must establish and maintain an internet-based price estimator, free of charge and without subscription. This tool would allow health care consumers to receive an estimate of the costs they will be responsible for paying to a hospital for a shoppable service. Under this legislation, hospitals that fail to comply with price transparency requirements will be penalized $300 per day, until the violation is resolved.
Additionally, this legislation would codify HHS’s Transparency in Coverage rule, which requires insurers to provide consumers with real-time, personalized access to cost-sharing information in order to shop and compare costs between specific providers, before receiving care. This legislation would require health plans seeking certification as qualified health plans to disclose in-network provider rates, out-of-network allowed amounts and billed charges, negotiated rates, and historical net prices for a covered prescription drug. Additionally, insurers would be required to establish and maintain an internet-based self-service tool to provide information to an individual, free of charge and without subscription, to allow individuals to search for cost-sharing information by a specific in-network provider or by all in-network providers, as well as an out-of-network allowed amount. It would also allows individuals to refine and reorder search results based on geographic proximity of in-network providers and the amount of the individual’s cost-sharing liability for a covered item or service.