the American Association of Colleges of Osteopathic Medicine

This analysis was prepared by Venable, LLP, on behalf of AACOM.

On Wednesday, June 12, the House Committee on Education and the Workforce passed a four-bill package aimed at strengthening transparency in healthcare, including the Transparency in Billing Act (H.R.4509), the Transparency in Coverage Act (H.R.4507), the Health DATA Act (H.R. 4527) and the Hidden Fee Disclosure Act (H.R. 4508).

A summary of the hearing, including highlights relevant to the OME community can be found below.

Committee Markup Summary

In her opening statement, Chairwoman Virginia Foxx (R-NC-5) touted the efforts of the House Committee on Education and the Workforce to improve price transparency and competition in the U.S. healthcare system. Specifically, Chairwoman Foxx was proud of the work Congress has done to address the growing problem of unexpected medical bills from out-of-network providers via the No Surprises Act. However, the implementation of the No Surprises Act has been far from perfect. The markup today seeks to better equip the Biden Administration to implement the No Surprises Act as intended by Congress. H.R. 4509 ensures hospitals account for their charges correctly and prevents them from tacking on hidden facility fees and upcharges. H.R. 4508 clarifies the No Surprises Act’s requirement that consultants disclose compensation received for their services from group health plans, including pharmacy benefit managers (PBMs). H.R. 4507 requires healthcare plans to release negotiated rates and cost sharing estimates publicly. H.R. 4527 ensures health plan fiduciaries are not contractually restricted from receiving cost or quality care information about their plan.
According to Rep. Aaron Bean (R-FL-4), hospital prices constitute one-third of all healthcare spending in the United States and according to Ranking Member Bobby Scott (D-VA-3), hospital pricing is the single largest contributor to national health expenditures. Both members, along with Rep. Bob Good (R-VA-5) and Rep. Alma Adams (D-NC-12) expressed concerns around hospital consolidation, with a particular focus on the abuse of hospital outpatient departments (HOPDs). Hospital systems frequently buy up freestanding health clinics and physician offices in order to convert them to HOPDs, allowing them to charge hidden facility fees and higher prices for services that could be administered at a lower cost at a freestanding clinic. Outpatient prices are expected to grow faster than any other healthcare service over the next decade, a whopping 87%. Growth in Medicare spending on outpatient departments outweigh growth in other areas like prescription drugs and home health. Furthermore, rapid consolidation in the hospital industry has led to more than 50% of physicians being employed by hospitals or large healthcare delivery services.
Rep. Good and Rep. Mark DeSaulnier (D-CA-10) urged support of their legislation, H.R. 4507, which would codify a Trump-era regulation. The Transparency in Coverage Act will give patients and plan administrators real time access to prices for medical services and prescription drugs in advance of care. Under the current system, two patients can get the same care at the same hospital and end up with wildly different bills. H.R. 4507 would provide patients with detailed out-of-pocket cost information and negotiated rates for covered healthcare services. Moreover, H.R. 4507 improves the usability of the data insurers must report, thereby unleashing third-party developers to create innovative apps to better share data. Rep. Good specifically touted a provision within his bill that would shine a light on the negotiated rebates between PBMs and pharmaceutical manufacturers.
Rep. Eric Burlison (R-MO-7) voiced his opposition to H.R. 4507 and H.R. 4508, claiming that these bills are another step towards a single-payer healthcare system. Rep. Burlison believes H.R. 4507 and H.R. 4508 will increase costs for consumers in the long run by overregulating insurers and the healthcare industry. Additionally, Rep. Burlison argued that employers are more than capable of negotiating the lowest prices possible with group plans and PBMs, and that employers, not the government, have the best interest of workers in mind.
Rep. Lori Chavez-DeRemer (R-OR-5) and Rep. Lucy McBath (D-GA-7) offered, and later withdrew, the Safe Step Act as an amendment to H.R. 4507. This amendment would require a group health plan to establish an exception to medication step-therapy protocols in specified cases. Currently, step-therapy protocols lead to excessive delays and costs for patients by forcing them to try certain medications first before gaining access to the medication their physician actually prescribed. These medications can be extremely dangerous for patients and can cause their medical conditions to deteriorate while they wait for the medicine they desperately need.
Rep. Chavez-DeRemer and Rep. Kathy Manning (D-NC-6) urged passage of H.R. 4527. The bill would amend the Employee Retirement Income Security Act (ERISA) to ensure that employers are not contractually restricted from obtaining cost or quality of care information about their own healthcare plans. Since the passage of the No Surprises Act in 2020, the Biden Administration has provided guidance on the implementation of the law. Unfortunately, the gag clause provision of the No Surprises Act needs to be strengthened, which is what H.R. 4527 would do. The gag clause provision ensures that employers are not prevented by PBMs and Third-Party Administrators (TPAs) from receiving important healthcare data they are entitled to receive. Service providers are circumventing current law by limiting the number of claims an employer can audit, limiting the number of audits an employer can conduct, and demanding the audit be conducted by their own company. If passed, the bill would help employers fulfill their fiduciary duty to their employees in providing the best health plan at the lowest cost.
Rep. Joe Courtney (D-CT-2) urged passage of H.R. 4508 to lower costs for employer-sponsored plans. About half of all Americans have employer-sponsored health insurance, and prescription drugs are now the biggest cost drivers of employer-sponsored health plans. The portion of healthcare premiums attributable to prescription drugs is 22 cents of every dollar, the largest single share of any category. Rep. Courtney and Rep. Houchin blamed skyrocketing prescription drugs costs on the opaque business practices of PBMs. H.R. 4508 would shine light on the compensation practices of PBMs by strengthening requirements that PBMs and TPAs disclose their compensation to plan fiduciaries.