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LUGPA Policy Brief: Enhancing Healthcare Price Transparency and Cost Reduction

Sept. 14, 2023

The Lower Costs, More Transparency Act (LCMTA) represents a proposed legislative initiative geared toward bolstering price transparency in the healthcare system, addressing prescription drug costs, and supporting patients, healthcare professionals, community health centers, and hospitals.

The LCMTA amalgamates elements from various proposed bills considered by the U.S. House in 2023, each designed to tackle specific healthcare issues individually. This new proposal stems from extensive negotiations involving the House Ways & Means, Energy & Commerce, and Education & Workforce Committees.

Policy Highlights:

Title I - Improving Health Care Transparency:

  • Hospitals must disclose standard charges for over 300 shoppable services, including negotiated fees.
  • Diagnostic labs must publicly reveal cash prices and insurer-negotiated rates for specific tests.
  • Imaging service providers are required to publish pricing information akin to diagnostic labs.
  • Ambulatory surgical centers affiliated with hospitals must disclose their pricing data.
  • Group health plans are tasked with providing personalized pricing information to enrollees and publishing machine-readable files containing in-network rates and prescription drug prices.

Additionally, the bill compels Pharmacy Benefit Managers (PBMs) to provide employers with comprehensive prescription drug spending data. The Government Accountability Office (GAO) is entrusted with reporting on healthcare price transparency requirements and their practical impact. A study examining the ramifications of vertical integration in Medicare Advantage organizations, providers, PBMs, and pharmacies is mandated. Furthermore, the bill establishes an advisory committee to enhance the accessibility and usability of information collected under this act and the Consolidated Appropriations Act of 2021.

Title II - Reducing Health Care Costs for Patients:

  • This section prohibits spread pricing in Medicaid.
  •  Enhances the accuracy of the National Average Drug Acquisition Cost (NADAC) survey.
  • Ensures parity in Medicare payments for off-campus hospital outpatient departments.
  • Provides implementation funding for Title I.

Title III - Supporting Patients, Health Care Workers, Community Health Centers, and Hospitals:

  • Extends funding for critical health programs, including Community Health Centers, the National Health Service Corps, and Teaching Health Centers that Operate GME Programs.
  • Postpones Medicaid Disproportionate Share Hospital (DSH) payment reductions.
  • Streamlines the Medicaid Improvement Fund.

Title IV - Increasing Access to Quality Health Data and Lowering Hidden Fees:

  • Ensures that health plan fiduciaries can access cost and quality of care information without contractual restrictions.

Collectively, these provisions strive to improve healthcare price transparency, empower patients, and alleviate costs across the healthcare spectrum. By granting consumers more comprehensive access to pricing information, the LCMTA aspires to foster a healthcare environment that is both highly competitive and patient centric. LUGPA has been actively engaged, providing comments and letters to Congress on several bills incorporated into the LCMTA.

A full copy of the proposed bill is available here, and a summary is available here.