Policy briefing: The Lower Health Care Costs Act open for comments until June 5th
Senate HELP leaders propose new, bipartisan legislation to address the high costs of healthcare. Comments are due by June 5, 2019 at 5:00 PM Eastern Time to LowerHealthCareCosts@help.senate.gov.
On May 23, 2019, leaders of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Democrat Patty Murray (Washington) and Republican Lamar Alexander (Tennessee) announced the Lower Health Care Costs Act (LHCCA), a discussion draft, which proposes to lower costs through:
1. Reducing or removing surprise medical bills
2. Reducing prescription drug costs
3. Improving transparency
4. Improving public health
5. Improving health information exchange
The first two levers — surprise medical bills and prescription drug costs — will likely get the most attention. However, it is worth noting the interdependencies in the full package, especially for state health and human services leaders.
Surprise medical bills
Surprise medical bills, also known as balance billing, are often issued when a patient believes they are getting in-network medical services, but a subcontracted provider does not take the patient’s insurance, making that specific provider out-of-network, and the patient is surprised to find they are on the hook for the provider’s full fees. Since providers cannot invoice Medicare or Medicaid patients for a remaining balance beyond the negotiated rates — a practice known as “balance billing” — this is an issue that typically impacts people with private insurance. Surprise medical bills have varied, but common examples include: contract emergency department doctors, anesthesiologists, and laboratory and diagnostic testing.
To fix this issue, the LHCCA would outlaw balance billing and create an in-network guarantee. This would require hospitals to ensure that everyone treating patients is considered in-network.
Prescription drug costs
The LHCCA proposes to lower prescription drug costs by implementing patient protections on the marketplace. If the LHCCA is passed, it will be easier to get cheaper generics and fewer opportunities to exploit the patent process. While this effort will address some of the challenges in high-cost prescription drugs, it will not address all challenges. However, implementing more transparency in the patent process is a foundational issue.
This section focuses on shoring up some of the principles that allow for a fair and open healthcare marketplace to thrive. It requires the removal of anti-competitive practices like gag-clauses on price and cost information, as well as other contract terms that result in higher healthcare costs. This effort aligns with some of the recent proposed rules from the U.S. Department of Health and Human Services (HHS) regarding information blocking in the health data exchange efforts. This section also requires health plans to exercise more accountability and oversight of Pharmacy Benefit Managers, whose business practices may sometimes be anticompetitive.
Furthermore, this section would require a new and fully appropriated non-governmental, non-profit organization to further the goal of transparency in healthcare. This section revises part of the Employee Retirement Income Security Act of 1974 (ERISA) to establish a database to support these efforts. This is an important change, as in 2016 the Supreme Court of the United States ruled in Gobeille v. Liberty Mutual Insurance Company that state All Payer Claims Databases (APCD) could not require private, employer-sponsored insurers to submit claims data to a government database. Establishing a mandate to align ERISA would be critical to any efforts to move forward with centralized cost and price data.
Furthermore, the ERISA alignment applies to state APCD efforts, allowing states to require submission of claims data to their APCDs. Additionally, were this to become law, there would be significant grant funding available to states — $100 million between fiscal years 2020-2029.
Another important effort in this section is to require provider directories to be accurate and updated. This will be enforced through refunds to plan enrollees when they act on outdated or incorrect information, as well as financial penalties to providers who do not update their information. These provisions reinforce some of the current challenges with surprise billing in that patients may act on outdated information for medical procedures, thinking they are being seen by in-network providers.
Public health efforts
This section requires HHS to implement a vaccinations campaign to better educate the public and reduce vaccine-preventable diseases. Improving public awareness of obesity and its causes is another major goal.
Furthermore, this section would establish technology-driven “collaborative learning and capacity building models, to increase access to health care services,” and goes on to specify several chronic conditions, behavioral health issues, pain management, and disparity-driven health outcomes. Grants could be used by many different types of provider entities in order to purchase and use technology to further the goals of learning and capacity building with technical assistance from HHS. However, this effort is currently unappropriated.
There is also no funding allocated in another section where HHS would offer grants and technical assistance to update public health reporting systems and electronic case management. This effort would support state and local efforts to exchange public health data in a timely way.
Finally, there is a section encouraging improved innovation and health outcomes to address maternal mortality and the associated disparities. There are other sections related to addressing health services disparities and infant mortality. Funding for this effort is also unappropriated at this time.
Health information exchange
This section complements some of the recent HHS efforts such as the interoperability proposed rules and the Trusted Exchange Framework and Common Agreement (TEFCA). It would require all health insurers to share claims data and provider directory information, supporting the transparency efforts discussed above. Furthermore, like the HHS efforts, this would require health insurers to provide this information through an Application Programming Interface (API).
States with complementary efforts underway may wish to consider comments as they relate to:
- Technological integrations and interoperability
- Fully funding critical initiatives
- Leveraging previous work and success on any priorities herein
- Challenges of complying with a litany of short-term deadlines, including the writing and implementation of regulations and related policy.
Comments are due by June 5, 2019 at 5:00 PM Eastern Time to LowerHealthCareCosts@help.senate.gov