House price transparency legislation passes with bipartisan support

The Lower Costs, More Transparency Act, which advances policies to force pharmacy benefit managers and hospitals to meet price transparency standards, passed on the House floor Monday by a vote of 320 to 71.

The comprehensive healthcare package looked doomed several months ago, despite bipartisan support from three separate House committees, when the legislation was pulled from a vote. Support has since coalesced around the proposals, as advocates anticipate the legislation could lower out-of-pocket costs for customers.

Of the dissenters, 39 Republicans and 31 Democrats voted against the bill with one Democrat voting present. It needed two-thirds majority to pass under suspension of the rules.

In addition to mandating providers and PBMs publicly list prices before they charge patients, hospitals will be required to publish charges through machine-readable files. The bill also calls for the elimination of $16 billion in disproportionate share hospital (DSH) program cuts through 2025, $7 billion in funds for the Medicaid Improvement Fund while allocating $15 billion in funds toward community health centers and programs to address physician shortages in underserved communities.

Leading House members argue the bill will help patients and employers get the­ best deal possible for patients and employers by codifying price transparency protections, allowing consumers to compare health insurers’ rates and prices hospitals charge. This means insurers will have to disclose all billing codes and modifiers.

“Congress asserting itself to declare price transparency the law of the land is critical,” said House Energy & Commerce health subcommittee chair Cathy McMorris Rodgers, R-Ore., during a floor statement on Tuesday. “It is our intent that the requirements for transparency and coverage should be as comprehensive as possible without limitations.”

“More than 40% of adults say that they have either delayed or forgone medical care because of high costs, and prices for healthcare services also vary widely,” said ranking member Frank Pallone, D-N.J., on the House Energy & Commerce health subcommittee. “It's a victory for everyone who has ever struggled to navigate and understand the cost of a healthcare procedure or prescription drug at the pharmacy counter.”

Rep. Pallone also reiterated his support for the $4.4 billion funding per year for community health centers in rural and underserved areas, a 10% increase over current funding levels. The legislation includes seven years of funding for the Teaching Health Center Graduate Medical Education Program to support the doctor shortage in primary care settings.

Hospital groups, meanwhile, have previously expressed dismay at the inclusion of a site-neutral payment provision for drugs under Medicare Part B.

“This is no time for so-called ‘site neutral’ Medicare cuts that harm beneficiaries, which is why it is vital for lawmakers to ultimately drop the policy from this bill,” said Federation of American Hospitals President and CEO Chip Kahn in a statement.

Darbin Wofford, a health policy advisor for center-left think tank Third Way, said he expects the site neutral fight will rage on.

“First, support is building for site neutral,” he said in comments shared with Fierce Healthcare. “Despite heavy lobbying and ad campaigns from the hospital industry, the site-neutral provisions in the package remained, and the bill still maintained widespread support. On the Senate side, the package could be taken up at the same time DSH cut delays are set to expire on Jan. 19. Second, the site-neutral debate isn't over. There is still much to do in achieving the same price for the same service."

A recent survey conducted by Morning Consult and released by nonpartisan organization United States of Care revealed that 74% of voters support limiting facility fees, or charges imposed on people because of where healthcare was delivered, and 81% of voters support requiring providers to disclose facility fees upfront to patients.

“So many of these problems in our healthcare system are rooted in the broken fee-for-service approach that gives patients a fragmented, disjointed healthcare experience and doesn’t treat them like whole people,” said United States of Care CEO Natalie Davis in a statement. “By demystifying hospital billing through transparency measures and protecting patients from facility fees, as 13 states have already done, we can take steps towards reducing the burden of healthcare costs and work towards a patient-first model that prioritizes quality over quantity.”

Only one other Democrat, Rep. Lloyd Doggett, D-Texas, spoke on the floor Tuesday. He said he opposed the bill because it “lacks transparency on major problems that are impacting soaring healthcare costs.” He viewed the growing role of private equity in health systems and Medicare Advantage plans as bigger problems that should be addressed first.

“A growing private equity takeover of healthcare has already undermined care in nursing homes and now threatens hospitals and medical specialty practices across the United States with higher prices, higher cost to taxpayers and less quality,” said Rep. Doggett. “The best way to fund much needed services at community health centers … is to take it right out of Medicare Advantage.”

Rep. Rodgers pointed toward a Congressional Budget Office analysis (PDF) showing the package will save taxpayers $715 million from 2024 to 2033. But David Ditch, a senior policy analyst at conservative think tank The Heritage Foundation, said it is worrying that the savings are backloaded.

“Here's the part that really blows my mind: the bill increases deficits for the first four years, making inflation worse,” he said in a post on X. “Savings are left to later years, where they would be vulnerable to a hospital-led push to undo the reforms. Completely irresponsible.”

House Republican members voiced support for a myriad of reasons. For example, Rep. Virginia Foxx, R-N.C., said the Hidden Fee Disclosure Act within the package will require third-party administrators and PBMs to disclose hidden compensation to plan sponsors. She also supported a provision prohibiting gag clauses between health plans and third-party entities.

“Honestly, it’s one of the strongest healthcare bills I can remember voting on since coming to Congress,” said Rep. Larry Bucshon, R-Ind.

Before the bill is signed into law, Rep. Pallone said the bill’s language will need to be edited. A new version of the bill includes language that restricts drug price data to small employers to improve privacy protections for employees, but that mention of certain groups, such as multi-employer, public sector and union health plans, were accidentally not included.