Biden Admin Offers Large-Scale Drug Data Collection in Fourth Surprise Billing Rule

Dive brief:

  • The Biden administration is proposing sweeping new reporting requirements for employers and health insurers in an attempt to collect more information on prescription drug prices and their impacts on consumer health costs.
  • The provisional final rule HHS, Bureau of Personnel Management, and Labor and Treasury departments require health insurance issuers, employer health insurance plans and other group health insurance plans to disclose information Details on federal drug costs and coverage, including average monthly premiums and drug expenses for patients, compared to their employers or plan issuers. The goal is to eventually publish a report on prescription drug price trends and discounts, as well as their impact on premiums and reimbursable costs.
  • The rule is the fourth in a series of regulations implementing surprise billing protections and consumer transparency measures passed by Congress as part of its federal spending program last year.

Dive overview:

Health industry groups, including payers, suppliers and manufacturers of pharmaceuticals, have consistently tried to blame the skyrocketing costs of care in the United States. national health expenditure.

Total drug expenditure should grow from 13.7% of all national health expenditure in 2018 to around 13.9% in 2028.

The new final rule implements requirements to attempt to identify the specific drivers of this projected cost increase. Payers and employers will need to give HHS an annual overview of the top 50 drugs in different areas, including the most frequently dispensed drugs, the most expensive prescription drugs, and the drugs with the largest increase in total annual plan spending compared to the previous year.

The HHS said collecting additional information on rebates, fees and other payments from drug manufacturers to drug benefit plans and managers – including the top 25 drugs generating the highest rebate amounts – will help the government. government to understand and report on prescription drug costs and their evolution. overtime.

“By collecting key data on prescription drug costs, we promote competition and transparency in the healthcare industry as we continue to curb rising drug costs and surprise medical bills,” said HHS Secretary Xavier Becerra.

Healthcare is becoming more and more expensive for consumers. Family premiums for employer-sponsored health insurance have increased 4% this year, roughly in line with annual changes in wages and inflation. But since 2011, these bonuses have increased by 47%, significantly faster than wages (31%) or inflation (19%).

In Medicare, monthly premiums covering medical and outpatient care for Medicare beneficiaries will increase by 15% next year, mainly due to the potential use of a single drug: Biogen’s Aduhelm for Alzheimer’s disease, which has come under criticism for its high price despite unclear efficacy to improve dementia due to progressive neurological disease.

And research has shown that relatively small amounts of drugs have a disproportionate impact on spending.

According to the Kaiser Family Foundation, the top 250 selling Medicare Part D drugs with no generic or biosimilar competitors account for 60% of total prescription drug program spending, although they only represent 7% of all drugs covered in Part D.

Congress is currently considering Democrat-backed legislation to limit what Medicare pays for drugs. But the proposal has become increasingly watered down amid fierce lobbying from the deep-pocketed pharmaceutical industry and compromises between different factions of the party. Under the latest compromise on the Hill, Medicare would not be able to directly negotiate the prices of newly launched drugs.

The new reporting requirements will apply from calendar year 2020 data, but HHS is delaying application until December 27, 2022, to give affected entities more time to come into compliance. Thus, the information required for 2020 and 2021 should not be submitted before 2022.

HHS plans to work through the Assistant Secretary of Planning and Evaluation to release a report on prescription drug price trends using the influx of new data. Departments plan to release their first report in June 2023 and every two years thereafter.

This is the latest regulation implementing consumer protection efforts codified by Congress last year, when Congress passed legislation including the No Surprises Act in an effort to protect patients from surprise medical bills – a persistent problem for American consumers receiving hospital or physician care outside of their insurance. networks.

Two interim final rules released earlier this year banned off-grid surprise billing and balancing billing from 2022 for people on employer-sponsored or individual market plans and describes the arbitration process to determine off-grid payments, so patients don’t receive surprise bills.

The Biden administration also proposed a rule in September that would require the market and short-term, time-limited health plans to disclose their financial relationships with third-party agents, and require air ambulance operators to disclose detailed information. on their operations.

The rules, which have been touted as one of the most important consumer protections in healthcare for a decade, have been criticized by provider groups as favoring insurers, although payers and payers groups. consumers support the reconciliation process for any surprise billing disputes.

The Association of Air Medical Services and the Texas Medical Association, among other groups, have filed legal challenges against the regulation.

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