United States: Beyond Surprise Billing: Lower Health Care Costs Act Of 2019

Last Updated: August 1 2019
Article by John E. Wyand and Austin Harrison

In June 2019, the Lower Health Care Costs Act passed out of the Senate Health, Education, Labor, and Pensions (HELP) Committee with a vote of 20-3. ""[I]nstead of remaining stuck in a perpetual partisan argument over Obamacare and health insurance, senators are working across party lines to lower the costs of what Americans pay for health care out of their own pockets," said. Senate HELP Committee Chairman Lamar Alexander (R-TN). The truly bipartisan legislation has garnered support of Senate Leadership, including Senate Majority Leader McConnell and Minority Leader Schumer. Though the legislation focuses on drug pricing and surprise medical billing, it also includes various other provisions relating to public health as well as healthcare provider and insurer requirements.

Cutting Costs: Elimination and Reduction

Title I of the bill is dedicated to the elimination of surprise medical billing, focusing on protecting individuals from out-of-network deductibles in emergencies, and from being billed for out-of-network ancillary services unexpectedly. Title II establishes cost saving measures by reducing prescription drug pricing – providing timely access to generic drugs and directs manufacturers to submit a report justifying planned price increases. The report, outlined in Section 215, establishes a fine for noncompliance and requires a manufacturer to list expenditures on R&D, patents, materials, and all other costs associated with developing the drug.

Transparency in American Healthcare: Indirect Approaches to Minimizing Cost to the Consumer

A secondary focus of the bill is on improving transparency in healthcare processes in the U.S. Title III aims to improve healthcare transparency processes through clearer expectations for healthcare industry participants. Section 309 stipulates that healthcare companies may only contract with providers who offer accurate information in a timely manner about how much a patient may have to pay out-of-pocket for services rendered.

Additional sections encourage transparency through additional regulation in some cases, and in others, regulation reduction. For example, Section 301 removes red tape for pharmacists and healthcare providers, allowing providers to discuss medication options and pricing with patients. Section 305 creates strict requirements that patients must receive a list of services rendered upon discharge and a bill must be delivered within 30 days, or the healthcare facility must refund the patient in full.

Improvements to Public Health: Preempting Healthcare Costs

Title IV aims to improve U.S. public health through innovative prevention programs and, in Title V, improving the exchange of health information. Provisions focused on tobacco, vaccines, and additional training for healthcare providers are indicative of attempts to minimize the number of health issues, and thus, the amount of healthcare-related costs. Section 414 would follow the lead of 16 states to increase the federal minimum age to purchase tobacco from 18 to 21. Section 401 instructs the CDC to award grants to outside organizations to conduct national, evidence-based campaigns on the importance of vaccines, targeting communities with low vaccination rates. Section 407 establishes funds grant programs for medical educational institutions to create educational programs focused on reducing and preventing diversity in the administration of healthcare services related to prenatal, labor, and postpartum care.

Bicameral Action

The Senate Finance Committee is considering a bill to limit price increases for drugs in Medicare and add an out-of-pocket maximum for beneficiaries on Medicare's prescription benefit program (part D). While Committee markup has yet to be scheduled, a recent Congressional Budget Office cost estimate predicated the legislation would lower consumer and government costs.

The House is pursuing similar legislative efforts. H.R. 2296, the FAIR Drug Pricing Act, is nearly identical to Section 215 of the Lower Health Care Costs Act, requiring manufacturer justifications and reports on drug price increases. H.R. 3630, the No Surprises Act, nearly mirrors Title I of the Lower Health Care Costs Act, offering broad protections to patients by placing new requirements on healthcare providers and insurers. On July 23, a policy aid for House Speaker Pelosi indicated a bill requiring the government to directly negotiate prices in Medicare (as compared to the current practice of insurers negotiating drug prices) will work through regular order in the House beginning in September. Provisions of House legislation could be combined into the Lower Health Care Costs Act should the legislation move to Conference between the two Chambers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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