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Updates on the Lower Health Care Costs Act


AHIP Comments on Lower Health Care Costs Act

June 26, 2019 - Matt Eyles, president and CEO of America's Health Insurance Plans (AHIP), issued this statement as the Senate Committee on Health, Education, Labor and Pensions (HELP) prepares for a markup of the Lower Health Care Costs Act:

"Everyone deserves affordable, comprehensive health coverage that allows them to get the care they need. We applaud the Senate HELP Committee for its continued hard work to deliver on this commitment, and we commend the committee for taking steps to protect consumers from outrageous medical bill and high drug prices. At the same time, we want to highlight and raise serious concerns that some of the proposals in this bill will actually increase health care costs for all Americans.

"The Lower Health Care Costs Act would advance several provisions that improve health care affordability and access. For example, it would protect millions of patients from surprise medical bills, with well-considered approaches to control health care costs for everyone. It would encourage more competition from generic drugs to lower drug prices. It also would clear the way for consumers to get more of their health information, more timely bills, and accurate cost estimates before they seek care.

"At the same time, we are concerned about provisions that would represent a major government overreach into the private market. New government mandates, requirements, and intrusions into competitive, private market negotiations that don't directly involve public programs or government funds would result in higher prices for millions of consumers, patients and taxpayers. Achieving the best deal for consumers depends on competitive negotiations, where all organizations compete and negotiate to offer the best value.

"We have serious concerns that proposals in this legislative package would hinder competitive negotiations in two ways. First, it would strip health insurance providers and their pharmacy benefit manager (PBM) partners of important leverage to negotiate lower drug costs, without addressing the root cause: High drug prices set and control by manufacturers who enjoy government-granted monopolies through the patent system. Second, it would disclose competitively negotiated, proprietary payment rates, which experts agree would push prices higher for consumers, patients, and taxpayers.

"We fully support transparency that help consumers make informed decisions about their care and costs. And we are committed to collaborating on solutions that bring down costs. We will continue to work with Congress and the Administration to improve health care affordability and access for every American."

Alexander: Senate Health Committee Votes 20 to 3 for Bipartisan Bill to Reduce Health Care Costs

"This legislation helps Americans in three major ways: It ends surprise billing, creates more transparency, andincreases competition to bring down prescription drug costs." -- Chairman Lamar Alexander

WASHINGTON, June 26, 2019 -- The Senate health committee today approved by a vote of 20-3 the Lower Health Care Costs Act of 2019, legislation that includes 54 proposals from 65 senators -- 36 Democrats and 29 Republicans.

"The Lower Health Care Costs Act will reduce what Americans pay out of their pockets for health care in three major ways," said Chairman Lamar Alexander (R-Tenn.). "First, it ends surprise billing. Second, it creates more transparency-- there are twelve bipartisan provisions that will: eliminate gag clauses and anti-competitive terms in insurance contracts, designate a non-profit entity to unlock insurance claims for employers, ban Pharmacy BenefitManagers (PBMs) from charging more for a drug than the PBM paid for the drug, and require that patients receive more information on the cost and quality of their health care. You can't lower your health care costs until you know what your health care actually costs. And third, it increases prescription drug competition--there are fourteen bipartisan provisions to help more low cost generic and biosimilar drugs reach patients.

"Altogether, this legislation will help to lower the cost of health care, which has become a tax on family budgets and on businesses, on federal and state governments," Alexander continued. "A recent Gallup poll found that the cost of health care was the biggest financial problem facing American families. And last July, this committee heard from Dr. Brent James, from the National Academies, who testified that up to half of what the American people spend on health care may be unnecessary."

Over the last two years, the Senate health committee held 16 hearings on a range of topics related to reducing the cost of health care. In May, Chairman Alexander and Ranking Member Patty Murray (D-Wash.) released for discussion the Lower Health Care Costs Act. The committee received over 400 comments on that draft legislation, and last Tuesday, the committee held a hearing to gather additional feedback. Last Wednesday, the Chairman and Ranking Member formally introduced the Lower Health Care Costs Act to reduce what Americans pay out of their own pockets for health care.

"I hope we can present [this package] to Majority Leader McConnell and Minority Leader Schumer for the full Senate to consider next month and would expect that other committees will have their own contributions,"Alexander said. "Since January, Senator Murray and I have been working in parallel with Senator Grassley and Senator Wyden, who lead the Finance Committee. They are working on their own bipartisan bill, which they plan to markup this summer. The Senate Judiciary Committee is marking up bipartisan legislation on prescription drug costs tomorrow. And in the House, the Energy and Commerce, Ways and Means, and Judiciary Committees have all reported out bipartisan bills to lower the cost of prescription drugs."

The legislation approved today included two additional provisions since the introduction of the Lower Health Care Costs Act, including legislation that will raise the minimum age for purchasing any tobacco product from 18 to 21, and the CREATES Act, legislation that will help bring more low cost generic drugs to patients by eliminating anti-competitive practices by brand drug makers.

The committee also approved the following bills today:

  • Chairman Lamar Alexander (R-Tenn.) and Sen. Bob Casey (D-Pa.) -- The Emergency Medical Services for Children Program Reauthorization Act of 2019: This legislation will ensure that, from the ambulance to the emergency room, emergency health care providers are fully prepared to treat children, who typically require smaller equipment and different doses of medicine.
  • Ranking Member Patty Murray (D-Wash.) and Sen. Richard Burr (R-N.C.) -- The Poison Center Network Enhancement Act of 2019:This bill will strengthen the network of 55 poison control centers across the country, including by modernizing the communications capabilities of poison control centers so that they can more effectively help prevent and respond to toxic exposures and poisonings.

Alexander's full prepared remarks are available here.

Video is available here.

Senate Committee to Vote on Lower Health Care Costs Act of 2019

The Senate HELP Committee will vote on the Lower Health Care Costs Act of 2019 on Wednesday morning, June 26th. See below for Manager's Amendment to the bill:

You can view the Manager's Amendment here.

Some noteworthy additions to the Manager's Amendment:

  • Majority Leader McConnell's Tobacco 21 bill, as amended, is included in the Manager's Amendment to the legislative package that the committee plans to consider on Wednesday.
  • The CREATES Act, as amended, is included in the Manager's Amendment to the legislative package that the committee plans to consider on Wednesday.

Statement from Chairman Alexander on T-21:

"Tobacco is clearly harmful and addictive, especially for young people. I commend Senators McConnell, Kaine, Young, Schatz, and Romney for developing this important, bipartisan proposal, and I welcome the value and support it brings to our legislation. Helping Americans live healthier lives is an important part of reducing health care costs."

Statement from Chairman Alexander on CREATES:

"The CREATES Act will help bring more lower-cost generic drugs to patients by eliminating anti-competitive practices by brand drug makers. I commend Senators Grassley, Leahy, and many other senators for developing this important, bipartisan proposal, and working with our committee to include it in our legislation to reduce what Americans pay out of their pockets for health care."

On June 19, Senate health committee Chairman Lamar Alexander (R-Tenn.) and Ranking Member Patty Murray (D-Wash.) introduced S.1895 the Lower Health Care Costs Act of 2019--bipartisan legislation to reduce what Americans pay out of pocket for their healthcare. Chairman Alexander and Ranking Member Murray announced that the committee will vote on the legislation on June 26, 2019.

"The single issue I hear most about from Tennesseans is, 'What are you going to do about the health care costs I pay for out of my own pocket?' Well, we've got an answer," said Chairman Alexander. "This legislation will reduce what Americans pay out of their pockets for healthcare in three major ways: First, it ends surprise billing; second, it creates more transparency -- you can't lower your health care costs until you know what your health care actually costs. And third, it increases prescription drug competition to help bring more lower cost generic and biosimilar drugs to patients. I look forward to working with my colleagues in the Senate health committee to mark up this legislation next week before sending it to the full Senate for consideration."

"People across the country have been facing impossible decisions to afford the care they need and are counting on us to act. So I'm glad my Republican colleagues decided to listen to families and join Democrats at the negotiating table to work on these bipartisan steps to help lower health care costs, end surprise billing, respond to issues like the maternal mortality crisis, vaccine hesitancy, and obesity, and more," said Senator Murray. "But this must be a first step, not a last one. I hope Republicans will build on this momentum by joining us at the table on bigger health care issues too--like repairing the damage from President Trump's health care sabotage and protecting people with pre-existing conditions."

Since last Congress, the Senate health committee has held five hearings on ways to reduce health care costs and four hearings on the cost of prescription drugs. In May, Alexander and Murray released a draft of this legislation for discussion, receiving over 400 comments. The Lower Health Care Costs Act of 2019 is composed of nearly three dozen specific provisions from at least 16 Republican senators and 14 Democrat senators.

Read the text of the legislation here.

Read the Section by Section of the legislation here.

Stakeholder Reactions:

ACEP Response to Senate HELP Proposal on Surprise Billing

The American College of Emergency Physicians (ACEP) has strong concerns that the Senate Health, Education, Labor and Pensions (HELP) Committee's recently introduced "Lower Health Costs Act" would dramatically disrupt emergency care and significantly distort negotiations between insurers and physicians.

Vidor Friedman, MD, FACEP, president of ACEP, said:

"ACEP shares the Senate HELP Committee's overarching goal to protect patients from surprise bills. However, emergency physicians strongly oppose the bill's "benchmarking" approach and remain very concerned that, as written, the legislation strongly favors insurance companies while creating new barriers that would limit patient access to emergency care.

This proposal fails to address in any way the root cause of surprise medical bills - narrow insurer networks. Instead, this proposal gives insurers a federally-supported incentive to lower their already opaque rates and further narrow provider networks - increasing the insurer advantage over physicians without any corresponding accountability or concern about what that could mean for patients.

ACEP believes the "STOP Surprise Medical Bills Act" put forward by Senator Cassidy and the Bipartisan Price Transparency Working Group remains the best starting point to take patients out of the middle of billing disputes and establish a fair, efficient process to resolve differences between insurers and providers. This independent dispute resolution is a proven and market-based process that ensures that all stakeholders come to the table to negotiate in good faith.

While improvements to the STOP Surprise Medical Bills are still needed, we believe the framework offered by Senator Cassidy should serve as the foundation of the Senate's ongoing efforts to protect patients from surprise medical bills, and we encourage the HELP Committee and the Senate to build upon this thoughtful bipartisan legislative proposal."

ACEP is the national medical specialty society representing emergency medicine. Through continuing education, research, public education and advocacy, ACEP advances emergency care on behalf of its 38,000 emergency physician members, and the more than 150 million Americans they treat on an annual basis.

AMA: Senate HELP Bill on Surprise Billing Fails to Fix a Broken System

The American Medical Association (AMA), along with more than 120 state and national medical specialty organizations, agrees that patients who have no opportunity to select an in-network physician should be protected from any charges above what they would have paid in-network.

The "Lower Health Costs Act" released Wednesday by the Senate Health, Education, Labor and Pensions Committee, however, would establish a government-mandated rate that absolves plans of one of their most basic obligations - developing adequate networks of physicians to care for their premium-paying customers.

Under the bill, out-of-network emergency care that could not be chosen in advance - such as services from anesthesiologists, radiologists, pathologists, on-call specialists, and other similarly situated physicians -- would be paid at the median in-network rate. That approach would eliminate incentives for plans to contract -- and likely encourage plans to drop contracts -- with providers who are currently above that amount.

The AMA believes that proven models, such as in New York, whereby patients are protected and physicians and plans reach a fair agreement through an independent dispute resolution mechanism offer a superior pathway that treats all parties fairly.


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