Health Divison of Funding Proposal
Note: This legislation has been pulled by congressional leadership; read more here
Lawmakers on Capitol Hill are in a race against time to pass a short-term spending bill and avert a government shutdown before the deadline of 11:59 PM on Friday, December 20 – roughly 72 hours away. Under normal procedure, bills in the House are sent to the Rules Committee to prepare for a floor vote. However, several key Committee members, including Chip Roy, Thomas Massie, and Ralph Norman, have voiced strong opposition to both the process and substance of this effort to fund the government. To bypass the Rules Committee, House leadership would need a two-thirds majority vote on the floor – a significant challenge that adds another hurdle to an already difficult legislative path.
The expansive Continuing Resolution set to fund the government through March 14, 2025, includes significant health provisions, such as stricter regulations on pharmacy benefit managers and the extension of relaxed telehealth rules for Medicare and commercial insurance plans. These provisions are part of a broader stopgap measure expected to pass this week as lawmakers work to avert a government shutdown, wrap up the current Congress’ priorities, and lay the groundwork for President-elect Donald Trump’s agenda.
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Here is a look at what’s currently included of importance to the health sector:
Sections Pertaining to Pharmacy Benefit Managers and Drug Pricing
Sec. 227. Modernizing and Ensuring PBM Accountability
Prohibits PBMs and their affiliates from deriving remuneration for covered Part D drugs based on the price of a drug
· Requires PBMs to define and apply drug and drug pricing terms in contracts with Part D plan sponsors transparently and consistently
· Sets out annual requirements for PBMs to report on drug price and other information to Part D plan sponsor clients
· Empowers Part D plan sponsors with new audit rights with respect to PBMs.
Sec. 901. Oversight of Pharmacy Benefit Management Services. This section promotes price transparency for prescription drugs purchased by employer health plans by ensuring Pharmacy Benefit Managers (PBMs) provide group health plans and issuers with detailed data on prescription drug spending at least semi-annually. Such data includes gross and net drug spending, drug rebates, spread pricing arrangements, formulary placement rationale, and information about benefit designs that encourage the use of pharmacies affiliated with PBMs. The section also ensures that health plans and individuals can receive a summary document regarding information about the plan’s prescription drug spending.
Sec. 902. Full Rebate Pass Through to Plan; Exception or Innocent Plan Fiduciaries. This section requires that PBMs fully pass through 100 percent of drug rebates and discounts, excluding bona fide service fees, to the employer or health plan regulated under the Employee Retirement Income Security Act of 1974 (ERISA) for new contracts, extensions, or renewals entered into for plan years beginning 30 months after the date of enactment. This section also clarifies the meaning of “covered service provider” under ERISA.
Sec. 113. Preventing the Use of Abusive Spread Pricing in Medicaid. This section bans “spread pricing” in the Medicaid program, which occurs when pharmacy benefit managers retain a portion of the amount paid to them (a “spread”) for prescription drugs.
Other Important Sections
Sec. 625. Strategic National Stockpile and Material Threats. This section updates the Annual Threat-Based Review for the Strategic National Stockpile (SNS) and amends procedures for administering the Stockpile to ensure that the Secretary is utilizing best practices and processes, including deployment and distribution tools, as well as appropriate communication regarding contract changes. Additionally, this section reauthorizes the SNS through FY 2026 and Project BioShield through FY 2034.
Sec. 206. Extension of Funding for Quality Measure Endorsement, Input, and Selection. This section provides $5 million in funding to the Centers for Medicare and Medicaid Services (CMS) for quality measure selection and to contract with a consensus-based entity to carry out duties related to quality measure endorsement, input, and selection activities through December 31, 2025.
Sec. 102. Making Certain Adjustments to Coverage of Home or Community-Based Services Under Medicaid. This section authorizes a 3-year, 5-state demonstration program to authorize selected States to cover home and community-based services (HCBS) for individuals who need such services but do not meet the current-law requirement of having an “institutional level of care” under section 1915(c) of the Social Security Act. In addition, this section codifies State reporting requirements on waiting lists for HCBS and directs the Centers for Medicare and Medicaid Services (CMS) to issue guidance on interim plans of care for HCBS.
PAHPA: The package would reauthorize the Pandemic and All-Hazards Preparedness Act for two years. The sweeping law, which dates to the George W. Bush administration, helps the U.S. respond to pandemics and biological threats. Many of its portions expired last fall, and others run out at the end of this year.
Transparency: The proposal includes language similar to the House’s Lower Costs, More Transparency Act, which would require a unique national provider identifier for Medicare hospital claims to indicate whether care is being delivered in an outpatient setting. Lawmakers are looking to equalize payments between the same care hospitals and outpatient clinics.