Consociate Health > News > Moves Toward Better Health Care Price Transparency

Moves Toward Better Health Care Price Transparency

July 8, 2019

Beginning in May 2018, the Trump administration began searching for ways to curb out-of-control prescription drug costs—referring to the initiative as American Patients First. This effort is finally seeing some traction, with the administration issuing regulations aimed at improving health care pricing transparency in May 2019.

Drug Pricing Transparency 
Drug companies will now be “required to disclose to patients the list price for prescription drugs in TV ads,” according to the Department of Health and Human Services (HHS).

More specifically, the rule requires prescriptions covered by Medicare or Medicaid that cost $35 or more per month for a typical course of therapy to be disclosed. Drugs under that threshold are unaffected.

HHS points out that the 10 most commonly advertised drugs range in price from several hundred to several thousands of dollars for a typical month of treatment.

This rule will take effect July 9, 2019. Employers should prepare for increased employee questions regarding drug costs.

President Trump’s Plan to Combat Surprise Medical Billing 
On May 9, 2019, President Donald Trump delivered a speech criticizing the practice of surprise medical billing. He announced a general plan of attack and hinted at a few specifics for curbing the trend. Here are the four main regulatory aspects called out by the president, suggesting that they might be tackled first:

  1. In emergency situations, patients shouldn’t have to “bear the burden” of out-of-network costs.
  2. Balanced billing should be prohibited for emergency care.
  3. For scheduled non-emergency care, patients should receive an “honest” bill up front—including an itemized list of out-of-pocket expenses the patient must cover.
  4. Patients should not receive a surprise bill from out-of-network providers they did not choose themselves.

Lower Health Care Costs Act 
Just a few weeks after the president’s speech on combatting surprise medical billing, the Senate Health Committee proposed a bipartisan bill called the Lower Health Care Costs Act.

The Lower Health Care Costs Act has five main components, including:

  1. Addressing surprise medical bills
  2. Lowering the cost of prescription drugs
  3. Improving transparency
  4. Improving public health
  5. Improving the exchange of health information

The Senate Health Committee Chairman Sen. Lamar Alexander said that “Republicans and Democrats in the United States Senate have announced this proposal of nearly three dozen specific bipartisan provisions that will reduce the cost of what Americans pay for health care. These are common sense steps we can take, and every single one of them has the objective of reducing the health care costs that you pay for out of your own pocket.”

The proposed legislation also includes a provision that would require benefits brokers to disclose their fees and any incentives they may receive from insurers. This provision would create a new level of transparency between employers and their benefits brokers, as many employers aren’t aware of the inner workings of health plan agreements or renewals.

What’s Next? 
The Lower Health Care Costs Act is just proposed legislation at the moment, meaning that there are no compliance obligations to meet. However, Sen. Lamar Alexander, bill co-sponsor, hopes that the bill will be on the Senate floor for a vote by July of this year.

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