Benefit News

Trump Administration Pushing for Drug Price Transparency and Attacking Practice of Surprise Medical Billing

May 10, 2019

HHS Moves For More Drug Price Transparency

Beginning in May of last year, the Trump administration began searching for ways to curb out-of-control prescription drug costs-referring to the initiative as American Patients First. This effort is finally seeing some traction, with the administration publishing its first final rule on the matter. Drug companies will now be "... required to disclose to patients the list price for prescription drugs in TV ads," according to the Department of Health and Human Services (HHS).

More specifically, the rule requires prescriptions covered by Medicare or Medicaid that cost $35 or more per month for a typical course of therapy to be disclosed. Drugs under that threshold are unaffected.

HHS points out that the 10 most commonly advertised drugs range in price from several hundred to several thousands of dollars for a typical month of treatment. If patients don't understand all of their options or how expensive certain drugs are, they can be on the hook for way more than they could ever afford.

This new rule aims to increase price transparency and better protect consumers. HHS hopes this transparency will also incite competition and "... [bring] free market forces to a system full of perverse incentives."

This rule won't take effect until 60 days after its publication, so employers should expect to see action starting in July. Employers should prepare for increased employee questions regarding drug costs.

Stay tuned for more information on industry developments.

Trump Announces Plan To Combat Surprise Medical Billing

On May 9, 2019, President Donald Trump delivered a speech criticizing the practice of surprise medical billing. He announced a general plan of attack and hinted at a few specifics for curbing the trend.

The president's speech aligned with this administration's American Patients First initiative-a blueprint for lowering consumer health costs. Here are the four main regulatory aspects called out by the president, suggesting that they might be tackled first:

  1. In emergency situations, patients shouldn't have to "bear the burden" of out-of-network costs.
  2. Balanced billing should be prohibited for emergency care.
  3. For scheduled non-emergency care, patients should receive an "honest" bill up front-including an itemized list of out-of-pocket expenses the patient must cover.
  4. Patients should not receive a surprise bill from out-of-network providers they did not choose themselves.

President Trump went on to state that any legislation would cover all health insurance, regardless of how it was acquired. This means individual and group coverage would still be afforded these protections.

In summary, this announcement keeps with this administration's commitment to lowering consumer health care costs through greater transparency.

The president ended the speech saying that the administration will be going even further to help curb "out-of-control" drug costs. He even hinted at future legislation that would be announced as soon as two weeks, touting it as "one of the strongest things we've done as an administration." This means employers should stay tuned for more developments as further price-lowering initiatives are unveiled and plan specifics are laid out.

For additional information, please contact your Burnham Benefits Consultant or Burnham Benefits at 949-833-2983 or inquiries@burnhambenefits.com.


Burnham Benefits does not engage in the practice of law and this publication should not be construed as the providing of legal advice or a legal opinion of any kind. The consulting advice we provide is intended solely to assist in assessing its compliance with the Patient Protection and Affordable Care Act and other applicable federal and state law requirements, and is based on Burnham Benefit’s interpretation of federal guidance in effect as of the date of this publication. To the best of our knowledge, the information provided herein, and assumptions relied on, are reasonable and accurate as of the date of this publication. Furthermore, to ensure compliance with IRS Circular 230, any tax advice contained in this publication is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another person any tax-related matter.

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