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Details revealed on lawmakers' surprise bills, drug pricing deal but future hazy

Three Capitol Hill health committee leaders revealed more details about their compromise legislation to end surprise medical bills and reduce the prices of prescription medicines a day after declaring a deal had been reached on the package.

But the heads of the House and Senate — Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Mitch McConnell, R-Ky., respectively — have yet to commit to letting the bill come up for a vote.

SNL ImageSen. Lamar Alexander, R-Tenn.
Source: Office of Sen. Lamar Alexander

Additionally, it is unclear if the sponsors of the legislation, known as the Lower Health Care Costs Act of 2019, have garnered enough votes to get it through their respective chambers.

Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tenn., and the leaders of the House Energy and Commerce Committee, Reps. Frank Pallone, D-N.J., and Greg Walden, R-Ore., said they reached the Dec. 8 deal after months of wrangling mostly over whether to use a benchmark approach or an arbitration process for resolving disputes over payments for surprise medical bills.

The surprise charges typically occur when hospitals, doctors and other providers are not covered in the insurance plan's network. Those out-of-network bills often involve anesthesiologists, radiologists, emergency room doctors and air ambulances.

"Surprise bills are not an accident — but rather an intentional exploitation of weaknesses in our healthcare system," Ashish Jha, a professor of health policy at the Harvard T.H. Chan School of Public Health and director of the Harvard Global Health Institute, wrote in a Dec. 9 op-ed in the Boston Globe.

The primary culprit of surprise medical bills has been physician companies whose business model is to exploit patients when they are most vulnerable — in an emergency or under anesthesia, Jha said.

"Many of us practicing physicians find the behavior outrageous. We all took an oath to 'do no harm,'" he said. "To financially ruin our patients when they are sick shows a moral rot in our community. If we don't voluntarily stop this practice, Congress will eventually stop us. And shame on us for making Congress do what we should do on our own."

Alexander's Senate committee adopted legislation in late June with the benchmark approach. But Pallone's House panel in July added an arbitration appeal process to its bill for when providers dispute the benchmark payment.

Lobbyists on both sides of the issue had flooded the TV and radio airwaves for months with commercials promoting their arguments on the matter.

Two congressmen who are medical doctors — Reps. Raul Ruiz, D-Calif., and Larry Bucshon, R-Ind. — had sponsored the House measure to add the arbitration appeal process, which could only be used for amounts over $1,250.

Under the agreement between Alexander, Pallone and Walden, that threshold was lowered to $750.

SNL ImageRep. Frank Pallone, D-N.J.
Source: AP Photo

If the median in-network rate payment is above $750, the provider or insurer may elect to go to baseball-style binding arbitration process, in which the insurer and the medical provider would each submit an offer and an independent dispute resolution entity would decide which was more reasonable.

Following arbitration, the initiating party must wait 90 days before trying to again take the same party through the process for the same item or service.

Drug pricing provisions

Many of the other provisions in the legislation resemble what were initially adopted by either the Senate and House committees, including a measure to require makers of certain prescription medicines to report information to the U.S. Department of Health and Human Services if the price of the drug is increased by more than 10% in one year or 25% or more within three years.

HHS would then be required to publicly post the manufacturers' reports the day the price increase is scheduled to go into effect.

Included in the compromise proposal were measures affecting biosimilars — drugs intended to be lower-cost versions of biologic therapies, which are complex molecules derived from living cells.

Among the biosimilar provisions is a measure that would ensure that when certain protein products, like insulin, transition in March 2020 to the biologics approval pathway, those therapies do not end up with any unduly additional marketing exclusivity that would delay lower-cost versions.

The bill would codify U.S. Food and Drug Administration guidelines on the protein products transition issued in December 2018.

The legislation would also increase the age from 18 to 21 to buy tobacco products — a measure McConnell co-sponsored and is keen on seeing put into law. It is unclear, though, if that is enough to get McConnell to bring the full legislative package to the Senate floor for a vote.

Pelosi also has her own measure in the House to lower drug prices, which is now facing competition from a new Republican package unveiled on Dec. 9. Leaders of the Senate Finance Committee also have a drug pricing package they want to be the priority for Congress. So the Alexander-Pallone-Walden legislation is competing for attention on the drug pricing measures.

White House support

The White House said it supported the bill from Alexander, Pallone and Walden.

It urged Congress to move quickly to adopt the measure before the end of the year — a timeline Alexander, Pallone and Walden said they are aiming to meet by attempting to get their bill included in the fiscal 2020 funding legislation, which must be completed by Dec. 20.

The White House has also supported the Senate Finance Committee legislation.