Stopgap funding bill includes sweeping PBM reform, preserves telehealth flexibilities

0
Stopgap funding bill includes sweeping PBM reform, preserves telehealth flexibilities

This audio is auto-generated. Please let us know if you have feedback.

Legislators reached a bipartisan agreement to fund the federal government on Tuesday in a sweeping package that includes a number of important provisions for healthcare, including a two-year extension of Medicare’s telehealth flexibilities and payment relief for doctors.

Yet, perhaps the most significant healthcare reforms in the stopgap funding bill released late Tuesday are changes to how controversial middlemen in the drug supply chain, called pharmacy benefit managers, do business.

The bill would force PBMs to pass through 100% of rebates to sponsors of prescription drug plans in Medicare and the group health market. The middlemen would be prohibited from billing Medicaid states and plans more for drugs than what they reimburse pharmacies. And, PBMs would have to provide detailed data on prescription drug spending to federal regulators and their clients.

The policies have been championed by pharmacist groups, patient advocates and many lawmakers in Congress facing intense public pressure to lower drug costs and improve access. Eliminating rebate retention in particular could remove an incentive for drugmakers to increase the list prices of drugs, while simplifying PBMs’ opaque financial practices, advocates say.

However, it’s uncertain whether such reforms will actually reduce costs for patients down the line.

Tuesday’s package also prevents payment cuts in Medicaid to hospitals that serve vulnerable patients, extends Medicare programs that increase access to rural healthcare and hikes funding for community health centers.

It also cracks down on so-called “ghost networks” in privatized Medicare plans, by protecting Medicare Advantage beneficiaries from hefty cost sharing if they get services from a provider listed in their plan’s directory but who isn’t actually in network.

The bill, which maintains current funding levels until mid-March, was delayed over House Republican infighting over infrastructure and farm provisions, according to reports. Though congressional leaders unveiled it with enough time to pass before government agencies shut down on Saturday, further squabbling could still threaten the agreement.

Historic PBM reforms

Currently, PBMs frequently retain a percentage of rebates paid to them by pharmaceutical companies in return for placing their drugs on the PBM’s formulary. The higher the list price of a drug, the more generous the rebate.

But the middlemen will no longer be allowed to link their payments to the prices of drugs in Medicare if the bill is passed in its current form. PBMs overseeing Medicare’s prescription drug benefit won’t be allowed to collect revenue other than “bona fide service fees,” according to the legislation.

Any rebates or fees collected by a PBM won’t be in violation, even if they’re calculated as a percentage of a drug’s price, if that revenue is passed through to a plan sponsor.

Similarly, PBMs would be required to pass through 100% of rebates to group health plans, or commercial coverage offered by employers or other associations.

Eliminating rebate retention was part of legislation during President-elect Donald Trump’s first term, but never made it across the finish line in Congress. Research from the Brookings Institution last year found restricting the practice is unlikely to save much money, since PBMs can extract revenue in other ways, like raising fees.

It could even backfire by making it harder for PBMs to negotiate down drug prices with manufacturers, according to the nonprofit public policy group.

PBM lobby the Pharmaceutical Care Management Association slammed the package, pointing to research suggesting delinking PBM rebates from the cost of drugs will raise premiums for seniors in Part D plans by $13 billion, with $10 billion of that going directly to drugmakers in increased profits.

“This bill does nothing to lower costs, nothing to improve pharmacy access, nothing to benefit patients. And that is because Congress is choosing to release 1,547 pages of new text hours before a vote, leaving no time to thoroughly review the provisions that will have serious consequences for our health care system,” the PCMA said in a statement Tuesday night.

The bill also bans spread pricing in Medicaid by requiring PBMs to reimburse pharmacies the entire cost of a drug plus a dispensing fee.

Pharmacy groups cheered the reform, with the National Community Pharmacists Association saying it will save taxpayers roughly $1 billion over the next decade.

link

Leave a Reply

Your email address will not be published. Required fields are marked *