The Lower Cost, More Transparency Act (LCMTA) and the Health Care PRICE Transparency Act 2.0 (HCPTA 2.0) will have to be reintroduced in 2025 in the wake of the GOP winning control of the White House and Senate and keeping its slim majority in the House.
Two bipartisan health care bills failed to gain traction in the narrowed-down continuing resolution (CR) aimed at averting a partial government shutdown in the final days of the 118th Congress.
The two bills address price transparency by providers and insurers in a highly complicated health care system. Price transparency for prescription drugs has been limited because drug prices are negotiated between pharmaceutical companies and insurers.
People with prescription drug coverage in their health plans frequently do not know the actual price of their medications because they are covered at least in part by the premiums they pay.
Exposing Negotiated Charges
The LCMTA would require health care providers and insurers to disclose certain information on the costs of care provided to patients. It was introduced by Rep. Cathy McMorris Rodgers (R-WA) in September 2023 and would have to be reintroduced to be considered by the current Congress.
“[T]he bill provides statutory authority for regulations that require hospitals to annually publish their prices and related information, including the discounted cash price and negotiated charges,” a summary of the bill by the Congressional Research Service (CRS) notes. Imaging centers, labs, and ambulatory service centers that participate in Medicare would also have to publish this information.
The bill included specific provisions for drug plans.
“Pharmacy benefit managers (PBMs) must semiannually report to health plan sponsors certain information on spending, rebates, and fees that are associated with covered drugs,” wrote CRS. “Contracts with PBMs for employer-sponsored health plans must also allow health plan fiduciaries to audit certain claims and cost information without undue restrictions.”
The bill requires drug price parity in Medicare “for certain drug administration services at off-campus hospital outpatient departments to be the same as that for other provider settings (i.e., physician offices),” wrote CRS. In Medicaid, “the bill requires pass-through pricing models, and prohibits spread-pricing, for payment arrangements for PBMs,” noted the report.
User-Friendly Price Transparency
HCPTA 2.0 was introduced by Rep. Warren Davidson (R-OH) in January 2023, with a companion measure sponsored by Sens. Mike Rounds (R-SD) and Bernie Sanders (I-VT). It, too, addressed price transparency in health care.
“Specifically,” a CRS summary states, “hospitals must publish in their list of standard charges certain rates negotiated with insurers, discounts for cash payments, and billing codes. Further, hospitals generally must publish the standard charges for the services provided by the hospital that may be scheduled in advance.”
The bill included specific requirements for insurance plans regarding in-network and out-of-network charges for covered items, including prescription drugs. Insurers would also have to provide a consumer-friendly tool for price searches and provide additional information about costs if policyholders request it.
New Administration, New Agenda
These include Robert F. Kennedy Jr. (Health and Human Services) and Dr. Mehmet Oz (Centers for Medicare and Medicaid Services). Medicare Advantage (MA), a frequent target of regulatory harassment during the Obama and Biden administrations, may receive more favorable treatment under Trump, with Oz having advocated the adoption of Medicare Advantage for All (see related commentary, page 12).
Another influence on health care policy will be the Department of Government Efficiency (DOGE), the advisory commission headed by Elon Musk and Vivek Ramaswamy and dedicated to eliminating waste in the federal bureaucracy.
“DOGE has already highlighted the problem of improper payments, sharing a Government Accountability Office report that found improper Medicare payments totaled $51.1 billion in fiscal 2023—22% of improper payments across the federal government and the highest of any federal program,” wrote Thomas Savidge, a research fellow at the American Institute for Economic Research, on December 24.
Legislation and Regulatory Changes
“Passing any major health care reform in the coming Congress will be difficult, but leaders will be wise to focus on price transparency from PBMs,” said Jeff Stier, a senior fellow at the Center for Consumer Choice.
“In this closely divided Congress, bipartisan support will be necessary,” said Stier. “Perhaps the only area where this will be possible will be at the margins. There’s an emerging consensus that PBMs, which are owned by health insurers, and no longer simply independent price negotiators, require additional oversight.”
This is why transparency is so critical, says Stier. “When PBMs negotiate on behalf of insurers and take a share of rebates offered by pharmaceutical companies, are they truly containing medical costs for patients, or are they incentivized to keep prices high?” said Stier. “Consumers, as well as policymakers, will need more transparency through the entire supply chain if there is to be any hope for lower drug prices. Certainly, even if legislation passes which requires more transparency from PBMs, there’s no guarantee for significant cost savings for patients; but without it, we are guaranteed not to make progress.”
“With a new administration taking office soon, there should be ample opportunity to address price transparency and a host of other issues,” said Craig Rucker, president of the Committee for a Constructive Tomorrow (CFACT). “Our health care system is larded with waste and fails to meet patients’ needs. DOGE, coupled with new leadership at federal health agencies, has a real shot at turning things around.”
Bonner Russell Cohen, Ph.D., ([email protected]) is a senior fellow at the National Center for Public Policy Research.
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.
