Congress

Senate HELP Committee Releases Discussion Draft to Reduce Health Care Costs

May 29, 2019 | Health Care

The leaders of the Senate Health, Education, Labor, and Pensions (HELP) Committee recently released the Lower Health Care Costs Act, a discussion draft that includes policies to reduce health care costs and spending. This legislation combines a number of ideas that have been offered to address high health care costs and, most encouragingly, is being done on a bipartisan basis. The draft includes policies intended to protect patients from surprise medical billing, increase drug competition, increase transparency, improve public health, and increase the availability of health information. A number of these policies also have bipartisan support in the House. 

The draft includes policies to end surprise medical billing, where patients can be subject to much higher cost-sharing than expected, for instance, when they go to an emergency room that is in-network for their insurance but receive care from a physician who is out-of-network. Several bills have been previously proposed to end surprise billing, but this draft is the most prominent. The bill would require that patients only be charged the in-network cost-sharing for out-of-network emergency care or out-of-network clinician care at in-network facilities and would require that the cost-sharing be counted towards the patient's deductible. The draft has three different options for determining how insurance plans would pay for this care. Either facilities would have to guarantee that all practitioners at the facility are considered in-network, payment would be determined by an arbitration process, or the plan would pay based on the median rate for the service in that area. 

The second section of the bill includes modest steps to increase transparency and competition for prescription drugs. The most notable policy would prevent the first generic drug competitor to a brand-name drug from delaying subsequent generic competition, a policy included in the President's budget and a House-passed bill (H.R. 987) that the Congressional Budget Office (CBO) previously estimated would save $442 million over ten years. This section would also clarify that five-year New Chemical Entity exclusivity would only apply to prescription drugs with no previously-approved active ingredients, clarify biologic approval changes that are already set to occur, limit the abuse of citizens petitions that can delay generic drug entry, and adjust rules regarding the publication of patent information. Several of these policies were included in the President's budget or are being considered in Congress.

The third section improves health cost transparency and restricts anti-competitive practices, including policies that would ban gag clauses that prevent people and insurers from seeing provider cost and quality data, prohibit anti-competitive clauses in provider and insurance contracts, require pharmacy benefit managers to pass on to plan sponsors 100 percent of any rebates or discounts they receive, and create an organization to provide health care claims data, among others. The fourth section includes the authorization or creation of grants to deal with several public health issues, such as vaccine awareness, obesity prevention, maternal health, and implicit bias in treatment. The final section mainly requires insurers to make data on a patient's claim history and expected out-of-pocket costs available electronically to patients.

There is no score available for the legislation yet, and the score would depend on which option the final bill chooses to deal with surprise billing. Nonetheless, the draft represents good first steps on a bipartisan plan to reduce health care costs. In a press release about the draft, Committee for a Repsonsible Federal Budget president Maya MacGuineas said: 

At a time when many in Washington are trying to buck hard choices, Senators Alexander and Murray deserve praise for taking seriously the need to control rapidly rising health care costs and putting forth sensible policies to begin this process.