Two lawmakers from opposite sides of the aisle have revived a version of the pharmacy benefit manager (PBM) reporting bill from the 118th Congress. That bill came close to passage last year but faced criticism from Elon Musk, who ultimately tanked the much larger bill in favor of an abbreviated spending package.
Rep. Erin Houchin (R-Indiana), and Rep. Joe Courtney (D-Connecticut), have now introduced the Hidden Fees Disclosure Act Bill. Although not identical, the bill is similar to the version contained within the Lower Cost, More Transparency Act that the House passed by a wide margin in 2023.
The law would require PBMs serving as self-insured employer health plans to disclose the following information to employers:
- All compensation the PBM has received;
- Detailed information about any rebate or discounts negotiated, including information about the amounts of rebates or discounts to be passed through to the employer or the plan participants; and
- Information about the PBM-related compensation flowing to other firms providing services for the employer’s plan.
Third-party administrators that serve self-insured employer plans would also have to provide significant information to employers, including:
- Rebates, discounts, and fees coming in from and going out to other service providers; and
- Recoveries from service providers that are associated with overpayments, erroneous payments, incomplete payments, billing errors, fraud, and other matters.
PBMs manage prescription drug benefits for insurers, self-insured employer health plans, and other payers. Criticism of PBMs has come from both Democrats and Republicans in Congress as well as at the state level. Many believe that PBMs control too big a share of the market, stifle competition from smaller, locally owned pharmacies, and keep an overly large portion of negotiated discounts instead of passing them along to customers. In response, PBMs claim they are the target of harsh criticism because they successfully decrease drug prices and limit profit margins for pharmacies and wholesale distributors.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
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