Take Two: Alexander and Murray Once Again Try to Tackle Health Care Costs

| Brittany McCullough
Gavel, stethoscope and scale on national flag of USA

Senate HELP Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) recently released draft legislation entitled the “Lower Health Care Costs Act”. According to reports, Chairman Alexander plans to finalize the bill relatively quickly and bring it up for a vote in July. 

Some of you may recall that Senators Alexander and Murray notably stuck a deal on an ACA market stabilization package in late 2017, but it never saw the light of day because it got bogged down over the inclusion of Hyde Amendment language. While that bill failed, Alexander and Murray are known for finding common ground on healthcare-related issues and have enough influence to actually get something across the finish line. As such, I’m optimistic that this new legislation might have a chance.

So, what exactly is in the bill draft?

The draft legislation is broken out into five areas of focus:

  1. Ending surprise medical bills
  2. Reducing the prices of prescription drugs
  3. Improving transparency in health care
  4. Improving public health
  5. Improving the exchange of health information

The title dedicated to prescription drugs includes provisions aimed at increasing the transparency of biological product patent information, making changes to the FDA’s Orange Book, promoting timely access to generic medications, preventing the blocking of generic drugs and streamlining the forthcoming transition of biological products from the drugs pathway to the biologics pathway. During this transition, the FDA will start regulating biologics that are currently regulated as drugs and subject to the Food, Drug and Cosmetic Act as biologics under the Public Health Service Act. Having minimal disruption will be key to ensuring the continued approval of biologics. Curious minds wanting to know more about the scheduled 2020 transition should read this nice Avalere overview.

Other proposals in the draft legislation focus on improving transparency through timely billing and increasing disclosures regarding direct and indirect compensation for brokers and consultants for employer-sponsored and individual market plans. There is also a section solely centered around increased health plan oversight of pharmacy benefit managers (PBMs). As proposed in the draft, PBMs would have to provide quarterly reports to health plan sponsors on rebate information associated with their contracts and would be prohibited from using spread pricing.

Another section of the bill draft is entirely dedicated to surprise medical bills. You can read my previous blog on that topic by clicking here. Under this new proposal, patients would be protected against surprise medical bills by generally limiting the amount of cost-sharing they are responsible for to the in-network rate and imposing a civil monetary penalty on violators up to $10,000. It also includes three options for the resolution of surprise bills:

  1. Using a benchmark determined by the median contracted rate for services within that geographic region
  2. Implementing an in-network guarantee
  3. Using an independent dispute resolution process facilitated by a third-party arbiter

This last model has already gained traction in a few states like New York that use independent review organizations (IROs) to issue binding decisions. The use of an independent, third-party arbiter to settle disputes mimics language in a bipartisan bill spearheaded by Senator Bill Cassidy (R-LA) entitled the STOP Surprise Medical Bills Act. However, the White House has previously stated they do not support arbitration, referring to it as an “unnecessary distraction”.

URAC recently issued a joint statement in collaboration with the National Association of Independent Review Organizations (NAIRO) supporting the role of accredited IROs should Congress pursue a model that utilizes third-party arbiters to resolve surprise billing disputes. To read our full statement, click here.

Brittany McCullough

Brittany McCullough, Health Policy Associate.

Brittany McCullough, URAC's health policy associate, focuses on tracking and analyzing legislation and regulations of importance to URAC stakeholders. Brittany considers herself an early careerist but most of her policy and research work has been centered on the ACA, Medicaid, CHIP, and mental health. She holds a B.S. in Neuroscience and a Master of Health Administration.

Views, thoughts and opinions expressed in my articles belong solely to me, and not necessarily to my employer.

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