Legislation to Improve Health Billing Transparency Endorsed by ERISA Industry Committee

The ERISA Industry Committee and other benefits and health industry groups have endorsed two bills that aim to improve transparency and lower costs in the administration of health care plans.

The two bills are the Lower Costs, More Transparency Act, which passed the House of Representatives in December; and the Pharmacy Benefit Manager Reform Act, which passed the Senate Health, Education, Labor and Pensions Act in May 2023.

The Lower Costs, More Transparency Act, introduced by Representative Cathy Rodgers, R-Washington, aims to improve hospital pricing information. The bill would authorize regulations to require hospitals to publish their prices, including discounted and negotiated charges. Clinical labs, imaging services and ambulatory surgical centers that participate in Medicare would also be subject to these requirements.

Additionally, pharmacy benefit managers would have to report to health plans information on rebates and fees for covered drugs and permit plan fiduciaries to “audit certain claims and cost information without undue restrictions.”

Lastly, the legislation would prohibit spread –pricing, a practice in which the PBM charges the payer more than they pay the pharmacy, for pharmacies dealing with Medicaid.

The Pharmacy Benefit Manager Reform Act, introduced by Senator Bernie Sanders, I-Vermont, would require pharmacy benefit managers to report to health plans a variety of pricing information, including: “the amount of prescription drug copayment assistance funded by drug manufacturers, a list of covered drugs billed under the plan during the reporting period, and the total net spending by the health plan on prescription drugs.”

Every six months, PBMs would also be required to report information on drugs that were purchased by the plan at pharmacies that are wholly or partially owned by the pharmacy benefit manager.

The Purchaser Business Group on Health, the American Benefits Council, the National Alliance of Healthcare Purchaser Coalitions, the Silicon Valley Employers Forum, the HR Policy Association, the Business Group on Health, and the Small Business Majority also endorsed the two bills.