LUGPA Policy Update: The Lower Costs, More Transparency Act

Dec. 18, 2023

The Lower Costs, More Transparency Act (LCMTA) is a proposed legislative initiative aimed at strengthening price transparency in healthcare, addressing prescription drug costs, and supporting various stakeholders in the healthcare system.

The LCMTA incorporates elements from multiple proposed bills in 2023, originating from negotiations involving the House Ways & Means, Energy & Commerce, and Education & Workforce Committees.

This bill requires healthcare providers and insurers to disclose certain information about healthcare costs. It also establishes requirements for certain payment methodologies under Medicare and Medicaid and extends several public health programs. On December 11, the bill passed the House on a bipartisan 320-71 vote; the LCMTA now moves to the Senate.

The bill mandates that healthcare providers and insurers divulge specific information regarding healthcare costs. It also outlines requirements for payment methodologies under Medicare and Medicaid, extending several public health programs. Notably, hospitals, clinical laboratories, imaging service providers, and ambulatory surgical centers participating in Medicare must annually disclose prices, including discounted cash prices and negotiated charges.

The LCMTA also places a strong focus on pharmacy benefit managers (PBMs). In the bill, PBMs are obliged to report claims for covered drugs to health plan sponsors semiannually. The bill also requires pass-through pricing models and prohibits spread pricing for PBMs under Medicaid.

Notably, the current version of the bill contains text in Section 203 that emphasizes site-neutral payments for drug administration in off-campus hospital outpatient departments (HOPDs). Section 203 addresses payment disparities resulting from higher reimbursement in HOPDs, which have led to increased costs. Examples include notable cost differences for chemotherapy, cardiac imaging, and colonoscopy between HOPDs and physician offices.

LUGPA strongly supports this provision, which could save a projected $3.8 billion over ten years and reduce out-of-pocket costs for patients. LUGPA urges Congress to extend this policy to all HOPD sites.

The bill allocates funds to the Department of Health and Human Services, the Department of Treasury, and the Department of Labor for implementing and enforcing its requirements. Additionally, it extends public health programs, including the Teaching Health Center Graduate Medical Education Program (through FY2030) and the National Health Service Corps (through December 31, 2025).

Collectively, these provisions aim to enhance healthcare price transparency, empower patients, and reduce costs across the healthcare spectrum. LUGPA has actively engaged in providing comments and letters to Congress on bills incorporated into the LCMTA.

Site-neutral payments for drug administration services help to lower patient costs, stabilize Medicare, and promote transparency in the healthcare marketplace. Site-neutral payment reforms have bipartisan support and could result in substantial savings for Medicare and its enrollees. By embracing these changes, Congress can contribute to a more competitive and patient-centric healthcare environment.

For further details, the updated proposed bill can be accessed here.