American Health Policy Institute
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Health Care Transparency Win for Employers

The House passed an HR Policy-supported health care bill which would enable employers to better manage their health care costs by increasing pharmacy benefit manager (PBM) and hospital transparency.

Why it matters: The lack of transparency on health care prices and hidden fees in the health care system limits the ability of employers to manage their costs and negotiate the best benefits for employees.

By the numbers: Large employers expect a 6% increase in health care costs next year and prescription drugs accounted for 24% of health care spending in 2022, according to a Business Group on Health survey.

The bill increases the fiduciary obligations of PBMs and includes provisions that require PBM’s to annually disclose all compensation, fees, rebates, alternative discounts, co-payment offsets, and other remuneration expected to be received from a pharmaceutical manufacturer, distributor, rebate aggregator, accumulator, or any other third party. 

Site-neutral payments:  Although site-neutral payments would only apply to Medicare in the bill, employer groups support the provision to create payment parity for the same service at different sites of outpatient care. Site-neutral payments would also remove an incentive for hospitals to purchase physician practices. 

What’s next: The bill passed with broad bipartisan support (320 to 71) and tees up Senate floor action on similar legislation and other reform measures in 2024. However, hospitals and PBMs are likely to strongly oppose the legislation.

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Authors: Margaret Faso

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