Health care legislation would disclose pricing information, enact site-neutral payment, regulate PBMs

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Lawmakers on both sides of the aisle praised legislation that aims to lower health care costs and make prices more transparent for patients.

The House of Representatives voted 320-71 to approve House Resolution 5378, the “Lower Costs, More Transparency Act,” in an evening roll call. Legislators called the bill “landmark bipartisan legislation” to bring down costs for patients by giving them more information about what hospitals and other health care providers charge for services.

“This bipartisan legislation delivers on our commitment to lowering health care costs and providing increased transparency for patients – something 95 percent of Americans support,” Rep. Cathy McMorris Rodgers (R-Washington) said in a news release. She is chair of the House Energy & Commerce Committee and a bill sponsor.

“It helps Americans save money on out-of-pocket expenses and seniors save millions on medicines through important Medicare payment reforms,” Rodgers said. “I thank my colleagues for their hard work and support of the legislation and urge the Senate to consider it without delay.”

Energy & Commerce Committee Ranking Member Frank Pallone (D-New Jersey) agreed.

“The ‘Lower Costs, More Transparency Act’ does exactly what it says it does – it delivers lower health care costs for the American people and brings much-needed transparency to our nation’s complex health care system,” he said in a news release. “This bipartisan bill is a victory for everyone who has ever struggled to navigate and understand the cost of a health care procedure or a prescription drug.

“I’m also pleased it will help make health care more accessible to American families by investing in Community Health Centers and programs to address the physician shortages across the nation,” Pallone added.

They also credited the work of Rep. Jason Smith (R-Missouri), chair of the House Ways and Means Committee, and Rep. Virginia Foxx (R-North Carolina), chair of the House Education and the Workforce Committee.

On the books

The legislators published a summary of what they hope to achieve with the bill. It was a compilation with parts of 19 other draft laws sponsored by numerous representatives.

The act “empowers patients and employers to shop for health care and make informed health care decisions by providing timely and accurate information about the cost of care, treatment, and services,” the summary said.

That will happen through new price publication requirements for hospitals, insurance companies, laboratories, imaging providers, and ambulatory surgical centers, starting in 2026.

Among other provisions, the bill would require the U.S. Department of Health and Human Services to report yearly to congress on annual effects of health care provider and payer consolidation.

Prescription drug pricing

The act would require health insurers and pharmacy benefit managers (PBMs) to disclose negotiated drug rebates and discounts, a move to reveal the true costs of prescription drugs, the lawmakers said. The drug price reporting requirements would take effect about 18 months after enactment.

Site-neutral payment

Section 203 of the bill carries the heading, “Parity in Medicare Payments for Hospital Outpatient Department Services Furnished Off-Campus,” starting in 2025 with a four-year phase-in. The Alliance for Site Neutral Payment Reform has strongly supported that provision, and the Alliance praised the House vote of Dec. 11.

“Under current Medicare rates, drug administration in the hospital outpatient department setting (HOPD) is reimbursed at two to three times the rate of the same services provided in the physician office setting,” the Alliance’s statement said.

“These payment disparities have not only generated higher out-of-pocket costs for patients and health care spending but have also provided an incentive for hospital systems to acquire independent practices,” the Alliance statement said. “As a result, physicians are being driven out of private practice – a trend that, according to new reports, has a negative impact on patient care quality and access.”

The issue has become divisive within health care. Physicians have questioned the fairness and patients have complained publicly about higher costs to them due to service prices based on location. Hospitals counter that greater reimbursement helps them cover costs that physicians’ offices don’t have. The American Hospital Association has argued site-neutral payment would hurt rural hospitals, making an average negative operating margin even worse.