PBGH Statement on House Passage of Lower Costs, More Transparency Act
The Purchaser Business Group on Health (PBGH) congratulates the 320 members of the U.S. House of Representatives who voted to approve the Lower Costs, More Transparency (LCMT) Act (H.R. 5378) on December 11, and we urge the Senate to move expeditiously to support strong legislation that addresses anti-competitive business practices by hospital, health plans and PBMs.
“It is imperative that affordable, private sector health benefits continue to be provided for American workers and their families. The bipartisan support for this legislation illustrates lawmakers’ agreement that the market failures that created rising health care prices are unsustainable for everyone and must be fixed,” said Alan Gilbert, vice president of policy with PBGH. “We applaud the House of Representative’s effort and this important step.”
Among other needed reforms, the LCMT advances site-neutral payment policies for a limited number of services so that patients are not charged more money based on where those services are provided. Additionally, the bill includes important billing transparency reforms and requires hospitals to publicly disclose the price of health care services. Hospitals in particular have used market power gained through the consolidation of physician-owned practices to demand higher prices from patients receiving outpatient care; while more work is needed on this issue, the LCMT Act will help address the problem.
Employers also applaud the House for recognizing the need for more transparency, as too many hospitals and health plans are failing to meaningfully comply with existing laws and regulations. Enshrining in statute negotiated hospital prices for health care items and services—along with codifying group health plan transparency in coverage requirements–are significant and necessary policy improvements.
Employers are eager for long-needed reforms to pharmacy benefit managers (PBMs), and welcome provisions that restore some transparency and competition to the market. However, more reforms that address the complex rebate structure and misaligned incentives and “spread” pricing models that lead to higher prescription drug costs are needed. We urge Congress to pursue additional PBM reforms that build on what was included in the LCMT.