House passes health care bill that targets hospital price transparency, PBM reform

The U.S. House of Representatives on Monday passed a health-care package that includes pharmacy benefit manager reform.

The Lower Costs, More Transparency Act would ban PBMs from spread pricing, or charging Medicaid more than they pay pharmacies for drugs, and codify Trump-era rules that require hospitals and insurers to publicly post their prices. PBMs, clinical lab test providers, imaging providers and ambulatory surgical centers also would have to be more transparent about their pricing. Although the bill passed the House on a bipartisan vote of 320 to 71, it is unlikely to be taken up in the Senate, where committees have written their own legislation.

In addition to mandating that providers and PBMs publicly list prices before they charge patients, hospitals would be required to publish charges through machine-readable files. The bill also calls for the elimination of $16 billion in disproportionate share hospital program cuts through 2025 and $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.

Several leading House members argued that the bill would help patients and employers get the­ best possible deal for patients and employers by enabling consumers to compare health insurers’ rates and prices that hospitals charge. This means insurers would have to disclose all billing codes and modifiers.

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

Rep. Frank Pallone, D-N.J., the ranking subcommittee member, agreed.

“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,” he said. “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.”

Related: House introduces bill focused on health care price transparency, PBMs and spread pricing

The bill now heads to the Senate, where improving transparency in health-care pricing and reining in PBMs also have bipartisan support. However, senators have their own proposals for addressing those issues, and it’s unclear if lawmakers in the two chambers can work out their differences  McMorris Rodgers said she has spoken with Sen. Bill Cassidy of Louisiana, the top Republican on the Senate Health Committee, and has scheduled a meeting with that panel’s chair, Sen. Bernie Sanders I-Vt. The two men have introduced their own PBM reform bill.

“Bottom line, there’s a lot of work that’s been done in the House and the Senate,” McMorris Rodgers said. “This has been a top priority of mine as the chair of Energy and Commerce. I believe that transparency is fundamental to driving down the cost of health care in America.”