Happy New Year! It’s 2024. I think most would agree with my saying that it’s going to be another crazy year. Let’s take a look at what we know and what we don’t know about data-sharing, PBM reforms and transparency.
Some Things We “Know” as We Kick off 2024
The Gag Clause Prohibition
The Biden Administration did NOT issue guidance delaying the December 31 submission date for the Gag Clause Prohibition “attestation,” and we still have NO clarifying guidance on whether the Gag Clause Prohibition (as set forth under the law in ERISA section 724) applies to agreements between the owner of a provider network and a plan sponsor or service provider to the plan, not just agreements with the group health plan itself.
As discussed in my blog post from December, the plan sponsor and service provider communities believe that any agreements with the plan sponsor or plan service provider is an agreement with the group health plan, and thus, they believe that ERISA section 724 applies. However, the owners of the provider networks disagree.
The Senate remains very interested in enacting S. 1339 into law. S. 1339 (called the Pharmacy Benefit Manager Reform Act) would require a PBM providing services to a group health plan to disclose to the Plan Administrator detailed information about the PBM’s pricing practices, the fees they charge, the amount of rebates and discounts they retain and even whether and when a PBM is steering patients to pharmacies owned by the PBM.
S. 1339 was approved by the Senate HELP Committee with wide bi-partisan support early on in 2023, and Majority Leader Schumer has been looking for opportunities to bring S. 1339 to the Senate floor.
Data-Sharing and Transparency
In a somewhat surprise move, the House passed the Lower Costs, More Transparency Act on December 11 with 320 votes, which is significant because it shows that there is bi-partisan support for the Data-Sharing and Transparency provisions included in the Act.
With regard to Transparency, the Act would codify the Hospital Transparency and Transparency in Coverage (TiC) Rules, increase penalties for non-compliance with the Hospital Transparency Rule and require the disclosure of prices and fees paid at ambulatory surgical centers, imaging centers and labs. Importantly, the Act would also codify the requirement to publicly disclose Prescription Drug Prices on a Machine-Readable File, a requirement that was put on hold by CMS due to a lawsuit filed against the regulation implementing this requirement.
With regard to Data-Sharing, the Act would require owners of the provider networks to share a complete and accurate set of claims data with a plan sponsor for purposes of “auditing” the plan’s claims adjudication process. The Act also seeks to amend the Gag Clause Prohibition, allowing plan sponsors to tell the Federal government that they cannot “attest” that gag clauses have been removed from their agreements and why. This is an important change based on everything I have been telling you about the ongoing battle between plan sponsors and insurance carriers who are the owner of the provider networks over whether and where prohibited gag clauses are present.
Some Things We Don’t “Know”
The Gag Clause Prohibition
We don’t know if the Senate will take steps to approve the House’s Lower Costs, More Transparency Act. That means we do not know if the amendments to the Gag Clause Prohibition discussed above will ever make their way into the law.
Personally, I believe that there are opportunities to tuck these provisions into a larger legislative vehicle, like legislation to keep the government funded and/or other supplemental spending bills that both the House and Senate will be considering by March 1 and March 8. But we just don’t know whether there will be any type of agreement that will prevent a government shutdown and/or provide financial aid to, for example, Ukraine and/or Israel. Currently, there is NO agreement on anything.
We also don’t know whether PBM reforms – particularly S. 1339 – will be included in legislation to keep the government funded and/or other supplemental spending bills. But because Senate Democrats and Republicans are eager to get S. 1339 into the law, I truly believe there will be a concerted effort to do just that.
We just don’t know whether those efforts will be successful, and what – if anything – House Republicans may want in return for agreeing to include S. 1339 in any forthcoming legislative vehicle. BTW, House Republicans shouldn’t want anything in return because they essentially support the reforms included in S. 1339. But again, we just don’t know, especially the way things have been going with House Republicans over the past six months.
Data-Sharing and Transparency
Similar to everything I just discussed above, we don’t know whether the requirement to share claims data for “audit” purposes and/or any other Transparency provisions will find their way into the law during these upcoming legislative exercises.
In addition, we don’t know whether the Biden Administration is going to issue any regulations or guidance clarifying the requirement to share claims data with a plan sponsor or service provider to the plan.
We could see some sort of regulations extending improvements to the Machine-Readable Files that are now applicable under the Hospital Transparency Rule to insurance companies and self-insured plans under the TiC Rule, but we don’t know when that’s going to happen.
With the upcoming Presidential election on November 5, the Biden Administration only has about one more year to act, although I do expect whichever political party controls the White House after November 5 will continue to implement and improve all the existing Transparency provisions currently in the law.
The information provided does not, and is not intended to, constitute legal advice; instead, all information and content herein is provided for general informational purposes only and may not constitute the most up-to-date legal or other information.