Industry Voices—How a Senate bill could actually lower healthcare costs

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The Lower Health Care Costs Act of 2019 addresses several major components germane to healthcare pricing, technology and transparency. (Pixabay)

On May 23, the Senate Health, Education, Labor and Pensions (HELP) Committee released a discussion draft on legislation that offers new perspectives on ways to approach pervasive, longtime issues within the U.S. healthcare system.

The Lower Health Care Costs Act of 2019 (PDF) is expected to be marked up by the end of June, and the Senate's goal is to consider the legislation later this summer.

The bill addresses several major components germane to healthcare pricing, technology and transparency.

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Here's a look at what the measure could do:

Rising Prescription Drug Costs

The bill addresses the supply chain of prescription drugs—starting with pharmaceutical companies and the prices they set. The goal is to lower the price of prescription drugs themselves while also paving the way for biosimilars and generics to get to the market faster. The legislation provides patent protections, not the regulation of drug prices, as a means of lowering drug costs.

Pharmacy benefit managers (PBMs) would be required to give quarterly reports on rebates given to them by drug manufacturers. The bill also would require the entirety of these discounts to be passed on to consumers/patients. 

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Surprise Medical Billing

The legislation requires out-of-network providers practicing in in-network facilities to accept in-network rates. This would protect patients who choose a hospital because it is within their networks, only to find out after the fact that doctors who provided care were out-of-network. This option could upset providers, who may receive lower payments and lose a general pricing advantage over insurance companies.

The legislation does not propose a way for out-of-network healthcare providers to be paid by insurers. Instead, the bill contains three options for doing so. Sponsors will make a decision on which to include in the final bill after they have received comments on the draft. 

Providers may choose to contract with the payer or go through the hospital for billing under the legislation. Price benchmarking sets prices for emergency services at out-of-network facilities at the median contracted rate in a particular geographic region. The goal is to remove the patient from the process of having to negotiate a rate.

Telehealth and Patient Data Access

The bill includes more use of and access to telehealth, such as remote patient monitoring. Tied together with a growth in technology and the popularity of transparency, the draft includes requirements for patient data access, as well as provisions for the Department of Health and Human Services (HHS) to fulfill interoperability requirements included in the 21st Century Cures Act.  

The proposal would allow patients access to their own claims data. The bill also includes an update in Health Insurance Portability and Accountability Act compliance required in the healthcare supply chain, and extends this compliance to third-party medical applications used to organize patient data.

Transparency

The bill creates a third-party, non-government entity to sift through patient data and create a price transparency database that patients, providers and payers can use. The bill also includes ending gag clauses, which keep pharmacists from telling patients that a generic version of their prescription might be cheaper. 

The bill would require cost estimates from payers and providers, as well as hospital billing that shows patients the breakdown of costs within 30 days of leaving the hospital. As for the healthcare supply chain, the bill bans price spreading, a bipartisan concern where PBMs charge more for prescription drugs than was spent to purchase the drug from the manufacturers.

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Contagious Diseases and Vaccinations

In light of the recent rise of measles outbreaks and to counter anti-vaccination messaging, the proposal includes implementation of educational campaigns and programs. The bill proposes that the Centers for Disease Control and Prevention award competitive grants to fund national campaigns aimed at increasing awareness of vaccines for the prevention and control of contagious diseases.

Additionally, the bill proposed that HHS do the same for practices that address infant and maternal mortality rates. The respective agencies will provide technical assistance to the programs run by local health organizations.

The HELP Committee invited public comments on the discussion draft and the comment period concluded June 5 for further consideration.

Mariam Eatedali is a research associate on the federal public affairs team of McGuireWoods Consulting in Washington, focusing on healthcare policy related to Medicare/Medicaid and prescription drug pricing issues. 

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