WASHINGTON — A bipartisan bill focused on eliminating surprise medical bills and lowering patients’ out-of-pocket costs passed out of the Senate Health, Education, Labor and Pensions Committee in a 20-3 vote on Wednesday.
A core focus of the “Lower Health Care Costs Act” is price transparency, said Committee Chairman Lamar Alexander (R-Tenn.).
“You can’t lower your healthcare costs until you know what your healthcare costs are,” he said, adding that the bill includes 54 different proposals from 65 different senators.
Alexander cited remarks made at an earlier hearing by Benedic Ippolito, PhD, a research fellow at the right-leaning American Enterprise Institute. “Together, the provisions in this bill would meaningfully increase competition and transparency in healthcare markets. If enacted, the legislation would lower insurance premiums and drug prices for consumers and would ensure patients are no longer exposed to surprise medical bills,” Alexander said.
He added that he, along with ranking committee member Patty Murray (D-Wash.), agreed that the best solution is to pay out-0f-network doctors in hospitals the median contract rate that in-network doctors are paid for those same services in a particular geographic area — a strategy dubbed “the benchmark solution.”
But not everyone bought that argument.
Sen. Rand Paul (R-Ky.) voted against the bill, arguing that setting a benchmark rate for out-of-network providers was akin to price-fixing. “There are those of us who have seen the history of price controls and don’t think [that with] price controls … you get what you intend. If you fix the price that [emergency department] doctors work at, you will get a shortage,” he said.
Senators (and Democratic presidential candidates) Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) also voted against the bill by proxy; both were in Florida preparing for the first Democratic primary debate.
During pre-vote discussion, Sen. Bill Cassidy, MD (R-La.), who ultimately voted in support of the bill, also opposed the benchmark idea, saying it gives all of the power to the insurer, and ignores another previously discussed option of arbitration, warning that such a method could create “a race to the bottom” (See MedPage Today’s coverage of previous discussions examining potential options for addressing surprise bills).
Sen. Lisa Murkowski (R-Alaska) also said she worried about the consequences of using a benchmark in a rural state with small and remote hospitals. “I’ve got very serious concerns that utilizing an in-network benchmark rate, without the appropriate backstop or levers, could result in our rural providers being removed from the insurance networks or being reimbursed at inadequate amounts,” she said.
While Alexander noted that the benchmark solution was deemed the most effective approach to lowering healthcare costs by the Congressional Budget Office, he said he was open to continue working on the bill to see if it could be improved.
In the current version of the bill, the benchmark strategy would also be applied to air ambulances, Alexander said, noting that nearly 70% of transports by air ambulances were out-of-network in 2017, according to the Government Accountability Office.
Alexander outlined other measures included in the current bill:
- Mandating that healthcare facilities offer a summary of services after discharge, and requiring that hospitals send all medical bills within 45 days
- Directing doctors and insurers to give patients price quotes on their expected out-of-pocket costs for care
- Helping to bring biosimilars to market faster by leveraging a “transparent, modernized and searchable” patent database
- Keeping the FDA drug patent database system up to date in order to accelerate generic product development
- Banning the abuse of “citizen petitions” which can “unnecessarily delay drug approvals”
- Closing a loophole that enables drug companies to retain exclusivity and prevent less expensive drugs from coming to market by making insignificant tweaks to old drugs
The bill would also increase prescription drug competition by eliminating “gag clauses” in insurance contracts, and by banning pharmacy benefit managers from charging more for a drug than they paid for it, Alexander said.
In addition, it would target several public health challenges, such as supporting state and local efforts to raise vaccination rates, efforts to prevent and curb obesity, and expanding healthcare technology to better serve rural communities, as well as enforce mental health parity laws.
The bill would also expand mandatory funding for community health centers and four additional programs “to ensure that 27 million Americans who rely on these centers for primary care and other healthcare can continue to access centers close to home,” Alexander said.
A manager’s amendment to the bill, which was approved by the committee Wednesday, also wrapped in two other measures; one that would raise the minimum age for purchasing any tobacco product to 21 from 18, and another that would ban anti-competitive practices in generic drug development such as sample-blocking. The latter bill is called the CREATES Act.
An amendment to require insurance companies to post information regarding network adequacy, based on the insurers last interaction with a provider, was also approved by the committee, along with the FAIR Drug Pricing Act, an amendment that calls for transparency from pharmaceutical companies that plan to raise prices of their products.
Murray commented that the committee’s efforts are still “not enough” to overcome the Trump administration efforts to “sabotage” the Affordable Care Act (ACA), which is the real threat to families’ healthcare costs, she said.
She referenced the upcoming oral arguments in Texas v. United States, the lawsuit brought by Republican state attorneys general seeking to have the entire ACA invalidated.
“Repairing the train can only get you so far, if you’re pulling up the track at the same time,” Murray said.
Sen. Chris Murphy (D-Conn.) agreed. “I feel a little bit as if this committee is sometimes living in a fantasy world,” he said.
Murphy introduced an amendment calling on the administration to provide information on how many people would lose coverage if Texas v. United States succeeds, and how many people with pre-existing conditions would see rate increases.
Alexander, who stressed that the day’s discussion was about reducing healthcare costs and not “our disagreements about the Affordable Care Act,” moved to table Murphy’s amendment and the GOP-controlled committee voted in favor of the motion.
Paul also introduced a handful of amendments related to expanding access to association health plans, removing caps on health savings accounts, eliminating the all-payer claims database, and requiring individuals to consent to inclusion in an all-payer claims database. Each of the amendments were either tabled or voted down.
Alexander said he aims to hold a floor vote on the bill before the end of July.