The Senate Health, Education, Labor and Pensions (HELP) Committee on Wednesday voted 20-3 to advance a bipartisan legislative package to address so-called “surprise” medical bills, but senators have suggested the bill could undergo more changes before it reaches the Senate floor next month.


Sens. Lamar Alexander (R-Tenn.), the committee’s chair, and Patty Murray (D-Wash.), the ranking member on the committee, last week unveiled the Lower Health Care Costs Act. The wide-ranging bill contained nearly three dozen proposals to lower prescription drug prices, bolster transparency and data sharing in the U.S. health care system, and address surprise medical bills.

Alexander and Murray had considered several ways to curb surprise medical bills, and ultimately, landed on a plan to establish a benchmark payment rate for out-of-network care–a move hospital groups opposed. Hospital groups had pushed for an arbitration process that health care insurers and providers could use to settle payment disputers for bills over a certain threshold. Alexander said he and Murray decided to move forward with the benchmark payment rate proposal because the Congressional Budget Office has estimated it would be “the most effective at lowering health care costs.”

The new provisions inside the Alexander-Murray bill

Before the final vote, the Senate HELP committee amended Alexander’s and Murray’s bill to contain more than 50 proposals.

For instance, the bill was amended Monday to allow HHS to establish regulations to tie benchmark payment rates for out-of-network services to the median in-network rate in the geographical area where the care was provided. The benchmark payment rate provisions would apply to out-of-network care provided by hospitals, physicians, and air ambulance companies.

In addition, the committee on Monday adopted by voice vote an amendment by Sen. Bill Cassidy (R-La.) that would require insurers to notify patients if categories of providers in their health plans do not have an in-network provider for ancillary services, such as radiology or lab work, according to Roll Call. The amendment would require insurers to show patients all of their in-network physicians and hospitals before they choose a health plan.

The bill also would require providers to inform patients of any potential out-of-network care and costs they could incur if they are moved from an emergency department to a general hospital setting, as well as any in-network options that are available. Under the bill, any emergency health care charges patients incur would be counted toward their in-network health plan deductibles.

The bill would mandate that insurers and providers cannot charge patients higher rates for ancillary, diagnostic, or emergency care that is provided by an out-of-network provider. Instead, the bill would permit providers and insurers to bill patients only for any copayment, coinsurance, or other cost-sharing charges they would have faced if they received the care from in-network providers, and would prohibit providers from so-called “balance billing.”

Further, the legislation would require:

  • Insurers and providers to give patients estimates of out-of-pocket costs for services within two business days of the patient’s inquiry;
  • Providers to send medical bills to patients within 45 days of the service date and give patients at least 30 days to pay the bills upon receipt; and
  • Providers to give patients a list of all the services they received upon discharge.

The bill stipulates that patients would not be required to pay medical bills they receive more than 45 days after the service date.

The bill also includes provisions to ban:

  • So-called “all-or-nothing” clauses in contracts between health insurers and providers that require insurers to contract with all of the providers within a certain system;
  • So-called “anti-tiering” and “anti-steering” clauses in contracts between insurers and providers that would restrict insurers from directing or encourage patients to use providers with higher quality ratings or lower price; and
  • So-called “most-favored-nation” clauses in contracts between insurers and providers that require providers to give insurers the best pricing of any insurer in a given market.

Proposals to lower prescription drug costs

The legislation also includes proposals aimed at lowering prescription drug costs in the United States, largely through boosting competition in the market.

For instance, the legislative package includes the CREATES Act, which aims to help bring more generic drugs to the market by addressing anti-competitive practices among brand-name drugmakers. The bill would prohibit so-called “pay-for-delay” agreements.

The bill also includes two measures that already have been approved by the House:

  • One that would require FDA to more quickly update its databases when a drug’s exclusivity period ends; and
  • One that would start exclusivity periods more quickly if it appears drugmakers are delaying launching their products.

In addition, the committee on Monday voted 16-7 to adopt an amendment from Sens. Tammy Baldwin (D-Wis.) and Mike Braun (R-Ind.) that would require drugmakers to disclose a drug’s cost information if the drug costs more than $100 and experiences a more than 10% price increase in one year, or a 25% increase over three years. Alexander said he opposed the amendment, but he plans to work with Baldwin to clarify the reporting requirements before the bill reaches the Senate floor, according to Roll Call.

In addition, the legislation includes a measure approved by the House Judiciary Committee that aims to deter drugmakers from abusing FDA‘s “citizen petition” process, which critics say can be used to delay competition in the market. In addition, the draft bill would prohibit so-called “pay-for-delay” agreements that incentive generic drug companies to delay to postpone marketing of the lower-cost drugs.

The bill would require pharmacy benefit managers (PBMs) to submit quarterly reports outlining their fees, costs, and rebates from drugmakers. In addition, the bill would mandate that PBMs pass any rebates they receive along to consumers and prohibit so-called “spread pricing,” which occurs when a health insurer contracts with a PBM to manage prescription drug benefits, and the PBM charges the health insurer more for a drug than it pays pharmacies to dispense the drug.

Public health, data sharing proposals

The legislative package also includes measures intended to address certain public health issues in the United States and bolster transparency and data sharing in the U.S. health care system.

For instance, the legislative package includes a measure from Senate Majority Leader Mitch McConnell (R-Ky.) and Sen. Tim Kaine (D-Va.) to increase the legal age to purchase tobacco products from 18 to 21, which The Hill reports could improve the likelihood that the bill is brought to the Senate floor for a vote.

The bill also calls for:

  • Funding for programs to education people about vaccines, as well as to curb vaccine-preventable diseases;
  • Funding to bolster training for health care professionals that is aimed at preventing bias and discrimination;
  • Grants aimed at developing, evaluating, and expanding the use of technology-enabled collaborative learning and capacity building models to bolster access to specialty health care services in underserved areas and for underserved populations;
  • Grants aimed at researching and improving maternal mortality, as well as bolstering pregnancy and postpartum care and child health; and
  • Improving cybersecurity and privacy for health data and electronic health records.

Further, the legislation would create a non-profit entity tasked with launching an all-payer claims database that would group together unidentified claims from Medicare, self-insured, and participating state health plans.

Hospital, physician groups push back

Chip Kahn, the president of the Federation of American Hospitals, criticized Alexander and Murray’s approach to surprise medical bills, saying it “misses the mark.” He added, “This bill solves the immediate problem for patients, but the unintended consequences of rate setting will lead to more narrow networks and a precedent of government interference in free-market negotiations.”

Robert W. Seligson, president of the Physicians Advocacy Institute, similarly said, “[W]e remain deeply concerned that arbitrary, government-set payment benchmarks championed by the health insurance industry will further undermine provider networks and devastate patients’ access to critical medical services

American Hospital Association EVP Tom Nickels called the payment rate proposals “unworkable” when Alexander and Murray unveiled the bill. He said, “Arbitrary, government-dictated reimbursement would result in significant unintended consequences for patients and create a disincentive for insurers to maintain adequate provider networks, particularly in rural America.”

America’s Health Insurance Plans President and CEO Mayy Eyles also raised “serious concerns that proposals in [the] legislative package would hinder competitive negotiations.” In a statement, Eyles said, “New government mandates, requirements, and intrusions into competitive, private market negotiations that don’t directly involve public programs or government funds would result in higher prices for millions of consumers, patients, and taxpayers.”

What’s next

Ultimately, the Senate HELP committee voted 20-3 to advance the measure, with Sens. Rand Paul (R-Ky.), Bernie Sanders (I-Vt.), and Elizabeth Warren (D-Mass.) voting against the measure.

Alexander said he hopes to bring the measure to the Senate floor for a vote in mid-to-late July, and will spend the next few weeks working with senators to address their lingering concerns.

According to Roll Call, a number of committee members have raised concerns over benchmark rates having “unintended consequences” on providers—particularly in rural regions—and they have called for providers and payers to be allowed to use arbitration to resolve billing disputes.

Cassidy said the current version of the bill would give insurers an uneven amount of power to address surprise bills and could disadvantage providers, but he noted Alexander committed to work with him and other senators to adjust the bill and consider other proposals, including using an independent arbiter to resolve billing disputes, before the measures reaches the Senate floor for a vote.

Alexander said senators will continue to work on the proposed legislation over the next few weeks. He said, “Cassidy, as well as Sens. (Lisa) Murkowski (R-Alaska) and (Maggie) Hassan (D-N.H.), have made some very strong arguments about the possibility of unintended consequences, especially in rural or underserved areas, of the requirement of an absolute benchmark”





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