July 18, 2019
The Council recently expressed strong support for the Lower Health Care Costs Act, which confronts some of the biggest obstacles to bringing costs down in the healthcare system. The support was articulated in a letter sent to the Senate Health, Education, Labor and Pensions (HELP) Committee.
In addition, the Senate HELP Committee recently released updated text of the Lower Health Care Costs Act. Our legal team at Steptoe & Johnson reviewed the latest version for issues related to Council members, including reporting requirements and compensation.
The components of the bill remain largely the same, particularly with respect to the provisions The Council supported around transparency. Of note, there are new group health plan reporting requirements under newly added Section 313, which could impact self-insured employers.
There are no visible or substantive changes to Section 308 on broker compensation disclosures. Below is an overview of surprise billing, data interoperability and reporting requirements.
Surprise Billing
There are no big changes in this Title; the bill still:
- Protects patients from surprise billing in certain circumstances, including for: emergency services; out-of-network (OON) ancillary services (e.g., PAs, pathologists, radiologists, etc.) performed at in-network facilities; OON care received post-emergency/labor; and air ambulance services (regular ambulances still not covered).
- Sets a benchmark payment rate for plans/issuers to pay providers based on median in-network rate in a geographic area (leaves it up to HHS to establish rules within one year to put meat on the bones of this methodology; air ambulance methodology will be developed separately and must take into account access in rural areas and consult the NAIC); if there isn’t sufficient info to calculate an in-network median rate, may default to a database maintained by the State (for insured plans) or DOL (for self-insured plans).
- Despite Chairman Alexander’s promise during the June 26 mark-up to work with Sen. Cassidy on a dispute resolution component, the bill still does not include any such provisions.
- States retain the freedom to impose their own surprise billing resolution methods on insured plans, facilities and/or practitioners; the methods outlined in the bill apply to self-insured plans.
Rx, Claims Data, and Cost-Sharing Transparency Measures –
This version appears to go much further than previous drafts in terms of increasing access to claims and Rx data for plan sponsors. It also, however, contains some provisions that will put additional burdens on group plans to collect and report/provide data.
As noted above, the latest draft has a new section 313 that requires all group health plans to report to HHS by March 1 of each year:
- Beginning and end dates of the plan year
- Number of enrollees
- States in which the plan is offered
- 50 most frequently dispensed brand drugs for claims paid by the issuer, and the total number of paid claims for each drug
- 50 most costly Rx drugs by total annual plan spend, and the annual amount spent by the plan for each drug
- 50 Rx drugs with the greatest increase in plan expenditure over the previous plan year with changes in expended amounts for each drug
- Total spend by the plan broken down by: hospital costs; provider and clinical costs; Rx drug costs; other medical costs; and Rx spending by the plan and by enrollees
- Average monthly premiums paid by employers and by enrollees
- Any impact on premiums by rebates, fees, or other remuneration paid by drug manufacturers or service providers, including such amounts paid for each therapeutic class of drugs and amounts paid for the 25 drugs that yielded the highest amount of such remuneration from drug manufacturers
- Any reduction in premiums and OOP costs associated with drug manufacturer comp mentioned in the bullet abov
Section 501 in the bill – which is carried over from the last version of the legislation and essentially replicates what HHS is trying to do via rulemaking for public programs and QHP issuers – also contains requirements for group health plans and issuers to make available through open APIs information on:
- Historical claims, provider encounter and payment data for each enrollee
- Directory information for all in-network providers
- Estimated OOP costs for common services
- A list of categories of ancillary services for which the plan has no in-network providers
The info required under section 501 must be available (during enrollment and for five years after) at no cost to enrollees and prospective enrollees, third parties authorized by enrollees, facilities and practitioners who contract with the plan/coverage, and business associates of such contracting facilities/practitioners.
Other notable and encouraging items for Council members in this area include:
- Prohibits contract clauses that keep group plans/issuers from providing provider-specific cost information to plan sponsors or enrollees or that keep sponsors/enrollees from accessing de-identified claims and encounter data for each enrollee in the coverage upon request (plans/issuers must attest to compliance with DOL annually).
- Prohibits contracts between plan/issuer and provider/provider network that directly or indirectly restricts plans/issuers from steering enrollees to other health providers, offering incentives to encourage enrollees to use specific providers, requiring plans/issuers to enter into any additional contract or agree to payment rates with an affiliate of the provider as a contractual condition, or restricting plans/issuers not party to the contract from paying a lower rate for items or services than the contracting plan/issuer.
- Requires establishment within one year by HHS and DOL of a non-profit-run all payer claims database accessible to employers, TPAs, etc. (to include info on cost, performance benchmarks, quality measures, etc.).
- Requires regular updating by plans/issuers of in-network provider status and directory information – and more communication with enrollees on this information; and notably, prohibits a plan/issuer from charging enrollees more than in-network rates if the enrollee or a referring provider relied on network or directory information that was inaccurate.
- Requires PBMs and issuers to report to plan sponsors at least every six months on: all manufacturer discounts/coupons/copayment assistance provided with respect to enrollees in the coverage; a list of each drug dispensed during the reporting period (including number of enrollees and prescriptions filled for each drug, wholesale acquisition cost of each drug, OOP spend by enrollees on the drug, and for drugs exceeding $10K in spend by the plan, a list of alternatives available and rationale for formulary placement); each therapeutic category or class of drugs dispensed (including spend per class, description of formulary tiers and utilization mechanisms employed for the class); total gross spend on drugs by the plan pre-rebates and other discounts; total amount the issuer or PBM expects to receive in rebates, fees, and other remuneration from manufacturers or other third parties; total net spend on drugs by the plan; and amounts paid directly or indirectly to brokers, consultants, or advisors, etc., who referred the plan to the PBM. There also are additional reporting requirements for issuers/PBMs that conduct transactions with wholly or partially-owned pharmacies.
- PBMs, TPAs, and issuers providing Rx management services must remit 100% of rebates, fees, discounts, and all other remuneration received from manufacturers, distributors or other third parties that are related to drug utilization under a plan/coverage to the group health plan.
- Providers and insurers must provide more robust and timely disclosures to enrollees on expected cost-sharing for specific services.