House Passes Mandate for Price Transparency Standards

WASHINGTON — Before leaving town for Christmas recess, the House passed a comprehensive health care package aimed at forcing pharmacy benefit managers and hospitals to meet price transparency standards.

The vote on Dec. 11 was 320-71, with 39 Republicans and 31 Democrats voting no and one Democrat voting present.

The vote itself was something of a milestone, despite bipartisan support from three separate House committees.

Originally expected to be voted on in September under suspension, an expedited process that indicated the Republican House leadership was confident it would receive the required two-thirds majority vote to pass, it was among the bills pulled from chamber’s schedule amidst the chaos surrounding the ouster of former House Speaker Kevin McCarthy, R-Calif.

It was revived in time for a December vote, in part, so House members could say they voted to lower out-of-pocket health care costs for consumers in the coming election year.

In addition to mandating health care providers and pharmacy benefit managers publicly list prices before they charge patients, H.R. 5378 would require hospitals, labs, imaging providers and ambulatory surgical centers to publish charges through machine-readable files.

The House measure further mandates that sponsors of group insurance disclose their in-network negotiated rates, out-of-network payments and prescription drug pricing data. They also must offer personalized cost information to their enrollees.

Under this provision, pharmacy benefit managers would have to disclose a wide range of pricing data to employers sponsoring health coverage, including amounts charged by manufacturers, rebate agreements, patient out-of-pocket costs and criteria for formulary placement.

The bill also prohibits pharmacy benefit managers from charging large markups when working with Medicaid managed care organizations.

“Congress asserting itself to declare price transparency the law of the land is critical,” said Rep. Cathy McMorris Rodgers, R-Wash., chair of the House Energy and Commerce health subcommittee, on the House floor on the day of the vote.

“It is our intent that the requirements for transparency and coverage should be as comprehensive as possible without limitations,” she added.

The House bill would also partially end the practice of major hospital systems charging facility fees for outpatient services when the providing entity is hospital-affiliated as opposed to an independent physician practice.

Previously, that practice enabled hospitals to charge more for the same services when nothing of consequence had changed in terms of the care delivered.

The House bill would end this practice but only for the administration of Medicare-covered drugs delivered to patients in an outpatient setting.

In addition, the bill would require companies producing FDA-approved generic drugs to disclose quantitative and qualitative differences from brand-name therapies to establish which products can be used as substitutes.

The House bill extends through the calendar year 2025 mandatory funding for the community health center program, which has been in place for several years as a supplement to regular discretionary appropriations.

The bill also addresses a highly controversial provision of the Affordable Care Act.

As adopted during the Obama administration, the ACA would cut Medicaid payments to hospitals serving elevated numbers of disadvantaged households, a byproduct of the legislation’s overall reduction of uninsured patients.

Hospitals pushed back on this provision and it was never implemented, though it continues to be on the books.

The House bill would extend the existing moratorium through 2025.

The Congressional Budget Office estimates H.R. 5378 would produce net savings of $725 million over the period 2024 to 2033.

However, it notes that the price transparency provisions mostly replicate the requirements already included in regulations, producing no new additional savings.

“More than 40% of adults say that they have either delayed or forgone medical care because of high costs, and prices for health care services also vary widely,” said Rep. Frank Pallone, D-N.J., ranking member on the House Energy and Commerce health subcommittee.

“It’s a victory for everyone who has ever struggled to navigate and understand the cost of a health care procedure or prescription drug at the pharmacy counter,” he added.

In an analysis of the legislation for the American Enterprise Institute, a center-right think tank based in Washington, D.C., senior fellow James C. Capretta and research associate Jack Rowing said overall, H.R. 5378 would make mostly modest changes to the current health system.

“There is nothing objectionable in it, but neither is there anything that might deliver transformative improvements over the status quo,” they said.

“Given the level of support the bill received in the House, and also the lack of visible opposition in the Senate, it would not be surprising if something like H.R. 5378 gets signed into law in 2024,” they added.

Dan can be reached at [email protected] and @DanMcCue