Senate Bipartisan Discussion Draft Released to Lower Health Care Costs, Address Surprise Billing

King & Spalding

On May 23, 2019, Senate Health, Education, Labor, and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) and Patty Murray (D-WA) released the Lower Health Care Costs Act of 2019 – bipartisan draft legislation to reduce health care costs. The bill contains five titles addressing various health policies under the committee’s jurisdiction: surprise billing, drug pricing, transparency in health care, improvements to public health, and promotion of health information technology. Chairman Alexander hopes to move the legislation through the HELP Committee by the end of June. This legislation would be combined with health care legislation working through the Senate Finance and Judiciary Committees and is expected to be considered by the Senate in July as part of a larger health care legislative package.

The Lower Health Care Costs Act was produced following five committee hearings and in response to stakeholder ideas solicited by Chairman Alexander. In order for feedback to be evaluated before the HELP Committee markup, comments must be submitted to by 5 PM on June 5th.

The Lower Health Care Costs Act of 2019 includes the following proposals:

  • Surprise Billing: Patients would be held harmless from surprise bills and are only required to pay in-network cost-sharing amounts. There are three potential options to address surprise bills, all of which would apply to all self-insured employer health plans – although a state can enact or maintain state laws related to surprise billing for markets regulated by the state:
    • In-Network Guarantee: An in-network facility must guarantee that every practitioner is considered in-network.
    • Independent Dispute Resolution: For bills $750 or less, a health plan pays based on a median contracted rate. For bills greater than $750, the facility or the practitioner could initiate an independent dispute resolution process using a third-party arbiter certified by the Secretary of HHS. This arbiter would make a final, binding decision; the loser pays for arbitration.
    • Benchmarking: A health plan pays the facility or practitioner based upon the median contracted rate.
  • Drug Pricing: The discussion draft clarifies specific patent information required to be reported for biologics and drugs. The draft also incorporates several approaches to promote biosimilar and generic competition, reforms the citizen petition process, and codifies agency guidance regarding the transition of insulin from a drug to a biologic.
  • Transparency in Health Care: The discussion draft bans gag clauses on provider cost and quality data and also bans specific anti-competitive terms from contracts between providers and health plans. The HHS Secretary would be directed to designate a nongovernmental, nonprofit organization to develop a database of health claims data received from self-insured plans, Medicare and participating states. This organization would create custom reports for employer and employee organizations to use in lowering health care costs. Providers would be required to send all bills to patients in a timely (within 30 business days) manner; if a patient bill is received more than 30 days after receiving care, the patient would not be obligated to pay for services. Health plans would be required to have updated directories of in-network providers, and both providers and plans would be required to make good faith efforts to provide patients expected out-of-pocket costs for specific health services within 48 hours of a request.
  • Improvements to Public Health: The discussion draft includes several provisions related to vaccine-preventable diseases and obesity prevention programs. Also included are several proposals related to maternal and perinatal care as well as health professional training to reduce and prevent discrimination.
  • Promotion of Health Information Technology: The draft bill expands CMS’s Blue Button Initiative, to require commercial health insurers to make specific data available to patients. HHS would be directed to evaluate a covered entity’s adoption of recognized cybersecurity practices when conducting audits or administering fines related to the Health Insurance Portability and Accountability Act (HIPAA). The Government Accountability Office would be directed to study gaps in privacy and security related to patient information supplied to third-party mobile applications that are not covered by HIPAA rules.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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