Summary
The House and Senate are both in recess until after Labor Day. During this break, we are continuing to take the opportunity to dive a bit deeper into issues of interest. This week, we are looking at current legislation focused on pharmacy benefit manager (PBM) and prescription drugs. The House has incorporated their PBM provisions into broader health-related transparency packages, while the Senate has crafted larger PBM-specific packages aimed at several PBM practices.
Six committees of jurisdiction have taken up and advanced PBM-related legislation out of committee. Impact Health Policy provides a chart here of all PBM legislation considered in the 118th Congress. Below we describe the major legislative vehicles for PBM reform by Committee:
- Senate Finance Committee (SFC) – The Modernizing and Ensuring PBM Accountability (MEPA) Act (summary) features provisions to limit PBM reimbursement to a bona fide service fee; increase transparency requirements; establish standardized pharmacy performance measures; and prohibit spread pricing in Medicaid.
- Senate Health, Education, Labor, and Pensions (HELP) Committee – S. 1339, the Pharmacy Benefit Manager Reform Act (summary) includes provisions related to PBM transparency, prohibiting spread pricing, and 100 percent rebate pass-through to insurers.
- House Energy and Commerce (E&C) Committee – H.R. 3561, the Promoting Access to Treatments and Increasing Extremely Needed Transparency (PATIENT) Act (summary) establishes PBM transparency requirements, prohibits spread pricing in Medicaid, and address cost sharing for highly rebated drugs.
The bill is also inclusive of transparency requirements for hospitals and insurers; aligns payment rates for drug administration and hospital outpatient departments, provides increased funding for community health centers, the special diabetes program, and the Teaching Graduate Medical Education Program, and cancels $16 billion in cuts to Disproportionate Share Hospital (DSH) payments.
- House Ways and Means (W&M) Committee – H.R. 4822, the Health Care Price Transparency Act of 2023 (summary) features PBM transparency requirements and limiting Part D cost sharing to the net price of Part D drugs. The bill also features hospital insurer transparency provisions, as well as proposals to address the use of prior authorization in Medicare Advantage.
- House Education and Workforce Committee – The Committee has advanced H.R. 4507, the Transparency in Coverage Act, H.R. 4508, the Hidden Fee Disclosure Act, and the DATA Act (summaries), which address PBM transparency requirements, PBMs use of gag clauses, and PBM and third-party administrator compensation to plan fiduciaries. The Transparency in Coverage Act also codifies the Hospital Transparency in Coverage final rule.
What’s Next? With a short amount of time to finalize appropriations bills and must-pass reauthorizations by the end of the fiscal year, other health-related legislation, such as PBM reform, hospital and insurer transparency, and site-neutral proposals may be included in an end-of-year package. With the House and Senate taking different approaches to PBM reform, the two chambers will need to come to agreement on which provisions among transparency, prohibiting spread pricing, and addressing rebates and PBM reimbursement will make it into the final package.
Regulatory Update:
No new rules have cleared review at the Office of Management and Budget (OMB). OMB is reviewing the following rules:
- Minimum staffing standards for long-term care facilities – Proposed rule would address staffing requirements at long-term care facilities, including nursing homes. Industry pushback has delayed the release of the rule, initially intended for June. Stakeholders are meeting with OMB in early September, meaning we are unlikely to see the proposal until the fall.
- Medicaid and CHIP Enrollment and Eligibility – Final rules intended to simplify the processes for eligible individuals to enroll and retain eligibility in Medicaid, CHIP and the Basic Health Program. The first final rule expected in September 2023 will remove barriers and facilitate enrollment of new applicants, particularly those dually eligible for Medicare and Medicaid. The second final rule expected in February 2024 will implement changes to align enrollment and renewal requirements for most individuals in Medicaid and promote maintenance of coverage.
- Mandatory Medicaid and CHIP Cor Set Reporting – Final rule would establish requirements for mandatory reporting of the Core Set of Children’s Health Care Quality Measures for Medicaid and CHIP, the behavioral health measures on Adult Health Care Quality Measures for Medicaid, and the Core Set of Health Care Quality Measures for Medicaid Health Home Programs. The final rule is expected in August 2023.
- Food and Drug Administration (FDA) Regulation of Laboratory-Developed Tests (LDTs) – Proposed rule would make explicit that LDTs are devices under the Federal Food, Drug, and Cosmetic Act and subject to FDA regulation.