H. R. 4507 - To amend the Employee Retirement Income Security Act of 1974 to promote transparency in health coverage and reform pharmacy benefit management services with respect to group health plans, and for other purposes.

Overview

Title

To amend the Employee Retirement Income Security Act of 1974 to promote transparency in health coverage and reform pharmacy benefit management services with respect to group health plans, and for other purposes.

ELI5 AI

H.R. 4507 wants to make it easier for people to understand health insurance and how much medicines cost by asking companies to share clear information about what they pay for. But this might be tough for smaller companies to manage because it involves lots of paperwork and rules.

Summary AI

H.R. 4507 aims to amend the Employee Retirement Income Security Act of 1974 to enhance transparency in health coverage and reform pharmacy benefit management services in group health plans. It requires health plans and insurance issuers to disclose information like claims payment policies, cost-sharing, and pricing data in plain language to the public. Additionally, it sets rules for pharmacy benefits managers, including bans on contracts that restrict information disclosure and mandates quarterly reports with detailed spending and rebate data. The bill also establishes an advisory committee to explore ways to improve accessibility and usability of this health-related information.

Published

2024-12-19

Congress: 118

Session: 2

Chamber: HOUSE

Status: Reported in House

Date: 2024-12-19

Package ID: BILLS-118hr4507rh

Keywords AI

transparency pharmacy benefit management health coverage employee retirement income security act group health plans cost-sharing price transparency reporting requirements real-time data privacy concerns

Sources

Bill Text

Bill Metadata

Bill Statistics

Size

Sections:

Words:

18,442

Pages:

Sentences:

248

Language

Nouns: 5,885

Verbs: 1,220

Adjectives: 1,240

Adverbs: 113

Numbers: 483

Entities: 492

Complexity

Average Token Length:

4.33

Average Sentence Length:

74.36

Token Entropy:

5.36

Readability (ARI):

39.76

AnalysisAI

The bill titled "To amend the Employee Retirement Income Security Act of 1974 to promote transparency in health coverage and reform pharmacy benefit management services with respect to group health plans, and for other purposes" aims to enhance transparency in health insurance and pharmacy benefit management. It mandates public access to certain information regarding health coverage and pharmacy benefits, fostering informed decisions by consumers regarding their healthcare needs.

General Summary of the Bill

The proposed legislation seeks to amend the existing Employee Retirement Income Security Act of 1974 (ERISA) to increase the transparency of group health plans and insurance coverage. It requires entities such as group health plans, health insurance issuers, and pharmacy benefit managers to disclose detailed information about their pricing and claims processes. The bill places particular emphasis on transparency in cost-sharing and payments, such as deductibles, copayments, and coinsurance. It mandates these disclosures to be made in plain language understandable to consumers, with real-time access to information through technological interfaces.

Significant Issues

One of the most prominent issues highlighted by this bill is the burden it imposes on smaller health plans and pharmacy benefit managers. The requirement that information be provided through real-time interfaces by a set deadline could lead to significant costs for implementation, particularly for smaller entities. Additionally, the severity of penalties for non-compliance or erroneous data submissions could deter participation or lead to financial stress for these stakeholders.

The bill also faces challenges related to privacy. Despite reference to existing privacy regulations such as HIPAA, the extensive data sharing requirements could increase the risk of data breaches. Furthermore, the definitions and criteria for information disclosure, such as "plain language" and the role of the Secretary in determining additional information requirements, lack clarity, potentially leading to inconsistencies in application.

Another critical area of concern is the absence of specific enforcement mechanisms in certain sections, notably those related to prescription drug cost transparency, which may limit the effectiveness of these provisions.

Impact on the Public

For the general public, the bill represents a step towards more transparent healthcare pricing, potentially allowing consumers to make more informed decisions about their health care options. Access to clear, real-time information about cost-sharing mechanisms could empower individuals to manage their medical expenses better. Over time, increased transparency might lead to competitive pricing among healthcare providers, benefiting consumers with more choices and possibly lower costs.

Impact on Stakeholders

Positive Impacts

Consumers and Patients: The bill offers potential benefits by shedding light on the often opaque pricing structures of healthcare services. Greater transparency could help patients make informed decisions about their care and understand the financial implications of their choices.
Policy Makers and Regulators: For these stakeholders, the bill supports efforts to increase accountability and standardization in healthcare, providing a more comprehensive overview of healthcare costs and practices.

Negative Impacts

Small Group Health Plans and Pharmacy Benefit Managers: The financial and logistical burdens associated with new transparency requirements could disproportionately affect smaller plans and businesses, potentially limiting their participation in the market or driving up costs.
Healthcare Providers: These entities might face increased administrative responsibilities as they work to comply with the new reporting and data-sharing requirements, which could impact service delivery.

The bill's aspiration to promote transparency in the healthcare system is commendable, but its requirements present a series of challenges that need careful consideration and potentially further refinement to ensure that its goals are achieved equitably across different sectors of the healthcare industry.

Financial Assessment

The bill, H.R. 4507, aims to improve transparency in health coverage by amending the Employee Retirement Income Security Act of 1974, focusing particularly on requirements around financial disclosures related to group health plans and pharmacy benefit management services.

One of the primary financial elements in the bill is the requirement for group health plans and health insurance issuers to disclose rate and payment information. This includes details such as claims payment policies, cost-sharing amounts, and the in-network rates for services and medications. The in-network rate, which is crucial for transparency, is defined as the contracted rate between the health plan or coverage and the provider for any given service or item.

Another significant financial reference is in Section 3, which mandates that pharmacy benefits managers (PBMs) and related entities provide detailed financial reports. These reports must include a wide range of data such as the gross and net spending on prescription drugs, the amount received in rebates and fees, and any copayment assistance dollars paid by the drug manufacturers. The bill requires that these reports be submitted quarterly, which could pose a substantial administrative burden, particularly for smaller entities.

The financial implications of these reporting requirements relate closely to the issues identified, notably the potential administrative burden on smaller organizations. The penalties for non-compliance with the pharmacy benefits management reporting requirements start at $10,000 per day for failures in providing timely information and can go up to $100,000 per false information item. While these penalties are intended to enforce compliance, they could discourage participation from smaller entities lacking the resources to handle such frequent and detailed reporting.

Section 2 introduces the necessity for health plans to make real-time payment data available through application program interfaces (APIs) by January 2026, except for plans with fewer than 500 participants and beneficiaries. This exemption highlights the bill's recognition of varying capacities among different health plans. However, plans just above this threshold might face financial challenges adapting to these new requirements, possibly resulting in increased premiums for participants to cover the added compliance costs.

The lack of specified enforcement mechanisms or penalties, particularly in Sections 2 and 4, raises concerns about the overall effectiveness in achieving transparency. Without clearly defined consequences for non-compliance, some plans might prioritize cost-saving over strict adherence to the transparency goals, thereby undermining the bill's intent.

In summary, while the bill seeks to enhance financial transparency and accountability in health coverage, there are potential financial burdens, especially on smaller entities, caused by the stringent reporting and compliance requirements. To address these, the bill might need further clarification or amendments to balance transparency objectives with the operational realities of health plans and PBMs.

Issues

The potential complexity and ambiguity in requiring multiple detailed reports from pharmacy benefits management entities in Section 3 could lead to excessive administrative burden and might deter compliance due to the severity of penalties, particularly for smaller entities. This could discourage smaller entities from participating in pharmacy benefits management.
The bill presents significant financial implications for smaller health plans with the requirement for rate and payment information through real-time application program interfaces by Section 2. This requirement could be burdensome for smaller plans not exempted (those serving 500 or more participants), potentially leading to increased costs for compliance.
Section 719 lacks clear enforcement mechanisms or penalties for non-compliance with transparency requirements, potentially undermining the intent of broad transparency if plans or issuers do not comply.
There are potential privacy concerns in Section 3 related to the extensive data collection and sharing requirements of pharmacy benefits managers despite references to HIPAA compliance. This could raise the risk of data breaches.
The definition of 'plain language' in Section 2 may need further clarification to ensure consistent application across different materials, which is crucial for accessibility to individuals with limited English proficiency.
The imposition of specific data reporting and transparency requirements may favor larger organizations with more robust compliance infrastructures to handle complex documentation and frequent reporting in Section 3, potentially disadvantaging smaller administrators.
Section 4 does not specify enforcement mechanisms or penalties for non-compliance with the requirements related to prescription drugs, which might limit its effectiveness.
The section on the Advisory Committee on the accessibility of certain information in Section 5 does not define the role and scope clearly, which could lead to ambiguity in its function and effectiveness.

Sections

Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.

1. Short title Read Opens in new tab

Summary AI

The first section of this act gives it the official title of the "Transparency in Coverage Act."

2. Promoting group health plan and group health insurance coverage price transparency Read Opens in new tab

Summary AI

The section requires group health plans and health insurance issuers to provide the public with transparent information about their pricing, including their claims payment policies and rate information, starting in 2025. It also mandates that they offer easy-to-understand, real-time cost-sharing data to participants upon request, using a self-service tool or other formats, to help them comprehend and manage their healthcare expenses.

Money References

— “(1) IN GENERAL.—For purposes of subsection (a)(9), the rate and payment information described in this subsection is, with respect to a group health plan or group health insurance coverage (as applicable), the following: “(A) With respect to each item or service (other than a drug) for which benefits are available under such plan or coverage, the in-network rate (in a dollar amount) in effect as of the first day of the plan year during which such information is submitted with each provider (identified by national provider identifier) that is a participating provider with respect to such item or service (or, in the case such rate is not available in a dollar amount, such formulae, pricing methodologies, or other information used to calculate such rate).
“(B) With respect to each dosage form and indication of each drug (identified by national drug code) for which benefits are available under such plan or coverage— “(i) the in-network rate (in a dollar amount) in effect as of the first day of the plan year during which such information is submitted with each provider (identified by national provider identifier) that is a participating provider with respect to such drug (or, in the case such rate is not available in a dollar amount, such formulae, pricing methodologies, or other information used to calculate such rate); and
— “(A) IN GENERAL.—Rate and payment information required to be made available under subsection (a)(9) shall be so made available in dollar amounts through 3 separate machine-readable files corresponding to the information described in each of subparagraphs (A) through (C) of paragraph (1) that meet such requirements as specified by the Secretary not later than 180 days after the date of the enactment of this paragraph through rulemaking.
“(f) Definitions.—In this subsection: “(1) PARTICIPATING PROVIDER.—The term ‘participating provider’ has the meaning given such term in section 716 and includes a participating facility. “(2) IN-NETWORK RATE.—The term ‘in-network rate’ means, with respect to a group health plan or group health insurance coverage and an item or service furnished by a provider that is a participating provider with respect to such plan or coverage and item or service, the contracted rate (reflected as a dollar amount) in effect between such plan or coverage and such provider for such item or service.”.
— “(1) IN GENERAL.—For purposes of subsection (a)(9), the rate and payment information described in this subsection is, with respect to a group health plan, the following: “(A) With respect to each item or service (other than a drug) for which benefits are available under such plan, the in-network rate (in a dollar amount) in effect as of the first day of the plan year during which such information is submitted with each provider (identified by national provider identifier) that is a participating provider with respect to such item or service (or, in the case such rate is not available in a dollar amount, such formulae, pricing methodologies, or other information used to calculate such rate).
“(i) the in-network rate (in a dollar amount) in effect as of the first day of the plan year during which such information is submitted with each provider (identified by national provider identifier) that is a participating provider with respect to such drug (or, in the case such rate is not available in a dollar amount, such formulae, pricing methodologies, or other information used to calculate such rate); and “(ii) the average amount paid by such plan (net of rebates, discounts, and price concessions) for such drug dispensed or administered during the 90-day period beginning 180 days before such date of submission to each provider that was a participating provider with respect to such drug, broken down by each such provider (identified by national provider identifier), other than such an amount paid to a provider that, during such period, submitted fewer than 20 claims for such drug to such plan or coverage. “(C) With respect to each item or service for which benefits are available under such plan, the amount billed, and the amount allowed by the plan, for each such item or service furnished during the 90-day period specified in subparagraph (B) by a provider that was not a participating provider with respect to such item or service, broken down by each such provider (identified by national provider identifier), other than items and services with respect to which fewer than 20 claims for such item or service were submitted to such plan or coverage during such period. Such rate and payment information shall be made available with respect to each individual item or service, regardless of whether such item or service is paid for as part of a bundled payment, episode of care, value-based payment arrangement, or otherwise. “(2) MANNER OF PUBLICATION.
— “(A) IN GENERAL.—Rate and payment information required to be made available under subsection (a)(9) shall be so made available in dollar amounts through 3 separate machine-readable files corresponding to the information described in each of subparagraphs (A) through (C) of paragraph (1) that meet such requirements as specified by the Secretary not later than 180 days after the date of the enactment of this paragraph through rulemaking.
“(2) IN-NETWORK RATE.—The term ‘in-network rate’ means, with respect to a group health plan and an item or service furnished by a provider that is a participating provider with respect to such plan and item or service, the contracted rate (reflected as a dollar amount) in effect between such plan and such provider for such item or service.”
— “(1) IN GENERAL.—For purposes of subsection (a)(9), the rate and payment information described in this subsection is, with respect to a group health plan or group or individual health insurance coverage (as applicable), the following: “(A) With respect to each item or service (other than a drug) for which benefits are available under such plan or coverage, the in-network rate (in a dollar amount) in effect as of the first day of the plan year during which such information is submitted with each provider (identified by national provider identifier) that is a participating provider with respect to such item or service (or, in the case such rate is not available in a dollar amount, such formulae, pricing methodologies, or other information used to calculate such rate). “(B) With respect to each dosage form and indication of each drug (identified by national drug code) for which benefits are available under such plan or coverage— “(i) the in-network rate (in a dollar amount) in effect as of the first day of the plan year during which such information is submitted with each provider (identified by national provider identifier) that is a participating provider with respect to such drug (or, in the case such rate is not available in a dollar amount, such formulae, pricing methodologies, or other information used to calculate such rate); and “(ii) the average amount paid by such plan (net of rebates, discounts, and price concessions) for such drug dispensed or administered during the 90-day period beginning 180 days before such date of submission to each provider that was a participating provider with respect to such drug, broken down by each such provider (identified by national provider identifier), other than such an amount paid to a provider that, during such period, submitted fewer than 20 claims for such drug to such plan or coverage.
— “(A) IN GENERAL.—Rate and payment information required to be made available under subsection (a)(9) shall be so made available in dollar amounts through 3 separate machine-readable files corresponding to the information described in each of subparagraphs (A) through (C) of paragraph (1) that meet such requirements as specified by the Secretary not later than 180 days after the date of the enactment of this paragraph through rulemaking.
“(2) IN-NETWORK RATE.—The term ‘in-network rate’ means, with respect to a group health plan or group or individual health insurance coverage and an item or service furnished by a provider that is a participating provider with respect to such plan or coverage and item or service, the contracted rate (reflected as a dollar amount) in effect between such plan or coverage and such provider for such item or service.”.

719. Price transparency requirements Read Opens in new tab

Summary AI

Group health plans and health insurance issuers must disclose information like claims payment policies, cost-sharing, and participant rights in plain language. They should also provide tools for participants to understand the costs of healthcare services, including real-time tools for checking in-network rates and estimated cost-sharing amounts. This aims to improve transparency and help individuals make informed decisions about their healthcare costs.

Money References

— (1) IN GENERAL.—For purposes of subsection (a)(9), the rate and payment information described in this subsection is, with respect to a group health plan or group health insurance coverage (as applicable), the following: (A) With respect to each item or service (other than a drug) for which benefits are available under such plan or coverage, the in-network rate (in a dollar amount) in effect as of the first day of the plan year during which such information is submitted with each provider (identified by national provider identifier) that is a participating provider with respect to such item or service (or, in the case such rate is not available in a dollar amount, such formulae, pricing methodologies, or other information used to calculate such rate). (B) With respect to each dosage form and indication of each drug (identified by national drug code) for which benefits are available under such plan or coverage— (i) the in-network rate (in a dollar amount) in effect as of the first day of the plan year during which such information is submitted with each provider (identified by national provider identifier) that is a participating provider with respect to such drug (or, in the case such rate is not available in a dollar amount, such formulae, pricing methodologies, or other information used to calculate such rate); and (ii) the average amount paid by such plan (net of rebates, discounts, and price concessions) for such drug dispensed or administered during the 90-day period beginning 180 days before such date of submission to each provider that was a participating provider with respect to such drug, broken down by each such provider (identified by national provider identifier), other than such an amount paid to a provider that, during such period, submitted fewer than 20 claims for such drug to such plan or coverage.
— (A) IN GENERAL.—Rate and payment information required to be made available under subsection (a)(9) shall be so made available in dollar amounts through 3 separate machine-readable files corresponding to the information described in each of subparagraphs (A) through (C) of paragraph (1) that meet such requirements as specified by the Secretary not later than 180 days after the date of the enactment of this paragraph through rulemaking.
(2) IN-NETWORK RATE.—The term “in-network rate” means, with respect to a group health plan or group health insurance coverage and an item or service furnished by a provider that is a participating provider with respect to such plan or coverage and item or service, the contracted rate (reflected as a dollar amount) in effect between such plan or coverage and such provider for such item or service.

9819. Price transparency requirements Read Opens in new tab

Summary AI

A bill section requires group health plans to share information like claims practices, enrollment data, and cost-sharing requirements with the public to ensure transparency. By 2027, this information must be available in real-time online; plans must also use simple language and provide easy access tools for individuals and healthcare providers to check costs and payment details.

Money References

— (1) IN GENERAL.—For purposes of subsection (a)(9), the rate and payment information described in this subsection is, with respect to a group health plan, the following: (A) With respect to each item or service (other than a drug) for which benefits are available under such plan, the in-network rate (in a dollar amount) in effect as of the first day of the plan year during which such information is submitted with each provider (identified by national provider identifier) that is a participating provider with respect to such item or service (or, in the case such rate is not available in a dollar amount, such formulae, pricing methodologies, or other information used to calculate such rate).
(B) With respect to each dosage form and indication of each drug (identified by national drug code) for which benefits are available under such plan— (i) the in-network rate (in a dollar amount) in effect as of the first day of the plan year during which such information is submitted with each provider (identified by national provider identifier) that is a participating provider with respect to such drug (or, in the case such rate is not available in a dollar amount, such formulae, pricing methodologies, or other information used to calculate such rate); and (ii) the average amount paid by such plan (net of rebates, discounts, and price concessions) for such drug dispensed or administered during the 90-day period beginning 180 days before such date of submission to each provider that was a participating provider with respect to such drug, broken down by each such provider (identified by national provider identifier), other than such an amount paid to a provider that, during such period, submitted fewer than 20 claims for such drug to such plan or coverage.
— (A) IN GENERAL.—Rate and payment information required to be made available under subsection (a)(9) shall be so made available in dollar amounts through 3 separate machine-readable files corresponding to the information described in each of subparagraphs (A) through (C) of paragraph (1) that meet such requirements as specified by the Secretary not later than 180 days after the date of the enactment of this paragraph through rulemaking.
(2) IN-NETWORK RATE.—The term “in-network rate” means, with respect to a group health plan and an item or service furnished by a provider that is a participating provider with respect to such plan and item or service, the contracted rate (reflected as a dollar amount) in effect between such plan and such provider for such item or service.

2799A–4. Price transparency requirements Read Opens in new tab

Summary AI

A group health plan and health insurance issuers must publicly share clear information about various financial and procedural aspects, like claims policies and cost-sharing, in an easily understandable format. They must also provide tools for enrollees to see their healthcare costs and update this information regularly, with a real-time option available starting in 2026, while ensuring yearly accountability through compliance attestations.

Money References

— (1) IN GENERAL.—For purposes of subsection (a)(9), the rate and payment information described in this subsection is, with respect to a group health plan or group or individual health insurance coverage (as applicable), the following: (A) With respect to each item or service (other than a drug) for which benefits are available under such plan or coverage, the in-network rate (in a dollar amount) in effect as of the first day of the plan year during which such information is submitted with each provider (identified by national provider identifier) that is a participating provider with respect to such item or service (or, in the case such rate is not available in a dollar amount, such formulae, pricing methodologies, or other information used to calculate such rate).
(B) With respect to each dosage form and indication of each drug (identified by national drug code) for which benefits are available under such plan or coverage— (i) the in-network rate (in a dollar amount) in effect as of the first day of the plan year during which such information is submitted with each provider (identified by national provider identifier) that is a participating provider with respect to such drug (or, in the case such rate is not available in a dollar amount, such formulae, pricing methodologies, or other information used to calculate such rate); and (ii) the average amount paid by such plan (net of rebates, discounts, and price concessions) for such drug dispensed or administered during the 90-day period beginning 180 days before such date of submission to each provider that was a participating provider with respect to such drug, broken down by each such provider (identified by national provider identifier), other than such an amount paid to a provider that, during such period, submitted fewer than 20 claims for such drug to such plan or coverage.
— (A) IN GENERAL.—Rate and payment information required to be made available under subsection (a)(9) shall be so made available in dollar amounts through 3 separate machine-readable files corresponding to the information described in each of subparagraphs (A) through (C) of paragraph (1) that meet such requirements as specified by the Secretary not later than 180 days after the date of the enactment of this paragraph through rulemaking.
(2) IN-NETWORK RATE.—The term “in-network rate” means, with respect to a group health plan or group or individual health insurance coverage and an item or service furnished by a provider that is a participating provider with respect to such plan or coverage and item or service, the contracted rate (reflected as a dollar amount) in effect between such plan or coverage and such provider for such item or service. ---

3. Pharmacy benefit manager transparency Read Opens in new tab

Summary AI

The bill mandates that, starting January 1, 2025, pharmacy benefits managers must regularly share detailed reports on drug costs and financial transactions related to health plans to ensure transparency. These reports should comply with privacy standards, and failure to provide accurate information can result in substantial fines.

Money References

Each such report shall include, with respect to the applicable group health plan or health insurance coverage— “(A) information collected from a patient or copay assistance program administrator by such entity on the total amount of copayment assistance dollars paid, or copayment cards applied, or other discounts that were funded by the drug manufacturer with respect to the participants and beneficiaries in such plan or coverage; “(B) total gross spending on prescription drugs by the plan or coverage during the reporting period; “(C) total amount received, or expected to be received, by the plan or coverage from any entities, in rebates, fees, alternative discounts, and all other remuneration received from the entity or any third party (including group purchasing organizations) other than the plan administrator, related to utilization of drug or drug spending under such plan or coverage during the reporting period; “(D) the total net spending on prescription drugs by the plan or coverage during such reporting period; “(E) amounts paid, directly or indirectly, in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA)) to brokerage houses, brokers, consultants, advisors, or any other individual or firm for the referral of the group health plan's or health insurance issuer's business to the pharmacy benefits manager, identified by the recipient of such amounts; “(F)(i) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in the plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services under such plan or coverage, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives funded by an entity providing pharmacy benefit management services; “(ii) the percentage of total prescriptions charged to the plan, issuer, or participants and beneficiaries in such plan or coverage, that were dispensed by mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services; and “(iii) a list of all drugs dispensed by such affiliated pharmacy or pharmacy under common ownership and charged to the plan, issuer, or participants and beneficiaries of the plan, during the applicable period, and, with respect to each drug— “(I)(aa) the amount charged, per dosage unit, per 30-day supply, and per 90-day supply, with respect to participants and beneficiaries in the plan or coverage, to the plan or issuer; and “(bb) the amount charged, per dosage unit, per 30-day supply, and per 90-day supply, to participants and beneficiaries; “(II) the median amount charged to the plan or issuer, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of such plan or coverage; “(III) the interquartile range of the costs, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of that plan or coverage; “(IV) the lowest cost, per dosage unit, per 30-day supply, and per 90-day supply, for such drug, including amounts charged to the plan and participants and beneficiaries, that is available from any pharmacy included in the network of the plan or coverage; “(V) the net acquisition cost per dosage unit, per 30-day supply, and per 90-day supply, if the drug is subject to a maximum price discount; and “(VI) other information with respect to the cost of the drug, as determined by the Secretary, such as average sales price, wholesale acquisition cost, and national average drug acquisition cost per dosage unit or per 30-day supply, and per 90-day supply, for such drug, including amounts charged to the plan or issuer and participants and beneficiaries among all pharmacies included in the network of such plan or coverage; and “(G) in the case of a large employer— “(i) a list of each drug covered by such plan, issuer, or entity providing pharmacy benefits management services for which a claim was filed during the reporting period, including, with respect to each such drug during the reporting period— “(I) the brand name, generic or non-proprietary name, and the National Drug Code; “(II)(aa) the number of participants and beneficiaries for whom a claim for such drug was filed during the reporting period, the total number of prescription claims for such drug (including original prescriptions and refills), and the total number of dosage units and total days supply of such drug for which a claim was filed during the reporting period; and “(bb) with respect to each claim or dosage unit described in item (aa), the type of dispensing channel used, such as retail, mail order, or specialty pharmacy; “(III) the wholesale acquisition cost, listed as cost per days supply and cost per dosage unit on date of dispensing; “(IV) the total out-of-pocket spending by participants and beneficiaries on such drug after application of any benefits under such plan or coverage, including participant and beneficiary spending through copayments, coinsurance, and deductibles (but not including any amounts spent by participants and beneficiaries on drugs not covered under such plan or coverage, or for which no claim was submitted to such plan or coverage); “(V) for any drug for which gross spending of the plan or coverage exceeded $10,000 during the reporting period— “(aa) a list of all other drugs in the same therapeutic category or class, including brand name drugs, biological products, generic drugs, or biosimilar biological products that are in the same therapeutic category or class as such drug; and “(bb) the rationale for preferred formulary placement of such drug in that therapeutic category or class, if applicable; and “(ii) a list of each therapeutic category or class of drugs for which a claim was filed under the health plan or health insurance coverage during the reporting period, and, with respect to each such therapeutic category or class of drugs during the reporting period— “(I) total gross spending by the plan; “(II) the number of participants and beneficiaries who filled a prescription for a drug in that category or class; “(III) if applicable to that category or class, a description of the formulary tiers and utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that category or class; “(IV) the total out-of-pocket spending by participants and beneficiaries, including participant and beneficiary spending through copayments, coinsurance, and deductibles; and “(V) for each drug— “(aa) the amount received, or expected to be received, from any entity in rebates, fees, alternative discounts, or other remuneration— “(AA) for claims incurred during the reporting period; or “(BB) that is related to utilization of drugs or drug spending; “(bb) the total net spending, after deducting rebates, price concessions, alternative discounts or other remuneration from drug manufacturers, by the health plan or health insurance coverage on that category or class of drugs; and “(cc) the average net spending per 30-day supply and per 90-day supply, incurred by the health plan or health insurance coverage and its participants and beneficiaries, among all drugs within the therapeutic class for which a claim was filed during the reporting period.
(B) in section 502 (29 U.S.C. 1132)— (i) in subsection (a)— (I) in paragraph (6), by striking “or (9)” and inserting “(9), or (13)”; (II) in paragraph (10), by striking at the end “or”; (III) in paragraph (11), at the end by striking the period and inserting “; or”; and (IV) by adding at the end the following new paragraph: “(12) by the Secretary, to enforce section 726.”; (ii) in subsection (b)(3), by inserting “and subsections (a)(12) and (c)(13)” before “, the Secretary is not”; and (iii) in subsection (c), by adding at the end the following new paragraph: “(13) SECRETARIAL ENFORCEMENT AUTHORITY RELATING TO OVERSIGHT OF PHARMACY BENEFITS MANAGER SERVICES.— “(A) FAILURE TO PROVIDE TIMELY INFORMATION.—The Secretary may impose a penalty against any health insurance issuer or entity providing pharmacy benefits management services that violates section 726(a) or fails to provide information required under section 726(b) in the amount of $10,000 for each day during which such violation continues or such information is not disclosed or reported. “(B) FALSE INFORMATION.—The Secretary may impose a penalty against a health insurance issuer or entity providing pharmacy benefits management services that knowingly provides false information under section 726 in an amount not to exceed $100,000 for each item of false information.
Each such report shall include, with respect to the applicable group health plan or health insurance coverage— “(A) information collected from a patient or copay assistance program administrator by such entity on the total amount of copayment assistance dollars paid, or copayment cards applied, or other discounts that were funded by the drug manufacturer with respect to the participants and beneficiaries in such plan or coverage; “(B) total gross spending on prescription drugs by the plan or coverage during the reporting period; “(C) total amount received, or expected to be received, by the plan or coverage from any entities, in rebates, fees, alternative discounts, and all other remuneration received from the entity or any third party (including group purchasing organizations) other than the plan administrator, related to utilization of drug or drug spending under such plan or coverage during the reporting period; “(D) the total net spending on prescription drugs by the plan or coverage during such reporting period; “(E) amounts paid, directly or indirectly, in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA) of the Employee Retirement Income Security Act of 1974) to brokerage houses, brokers, consultants, advisors, or any other individual or firm for the referral of the group health plan's or health insurance issuer's business to the pharmacy benefits manager, identified by the recipient of such amounts; “(F)(i) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in the plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services under such plan or coverage, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives funded by an entity providing pharmacy benefit management services; “(ii) the percentage of total prescriptions charged to the plan, issuer, or participants and beneficiaries in such plan or coverage, that were dispensed by mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services; and “(iii) a list of all drugs dispensed by such affiliated pharmacy or pharmacy under common ownership and charged to the plan, issuer, or participants and beneficiaries of the plan, during the applicable period, and, with respect to each drug— “(I)(aa) the amount charged, per dosage unit, per 30-day supply, and per 90-day supply, with respect to participants and beneficiaries in the plan or coverage, to the plan or issuer; and “(bb) the amount charged, per dosage unit, per 30-day supply, and per 90-day supply, to participants and beneficiaries; “(II) the median amount charged to the plan or issuer, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of such plan or coverage; “(III) the interquartile range of the costs, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of that plan or coverage; “(IV) the lowest cost, per dosage unit, per 30-day supply, and per 90-day supply, for such drug, including amounts charged to the plan and participants and beneficiaries, that is available from any pharmacy included in the network of the plan or coverage; “(V) the net acquisition cost per dosage unit, per 30-day supply, and per 90-day supply, if the drug is subject to a maximum price discount; and “(VI) other information with respect to the cost of the drug, as determined by the Secretary, such as average sales price, wholesale acquisition cost, and national average drug acquisition cost per dosage unit or per 30-day supply, and per 90-day supply, for such drug, including amounts charged to the plan or issuer and participants and beneficiaries among all pharmacies included in the network of such plan or coverage; and “(G) in the case of a large employer— “(i) a list of each drug covered by such plan, issuer, or entity providing pharmacy benefits management services for which a claim was filed during the reporting period, including, with respect to each such drug during the reporting period— “(I) the brand name, generic or non-proprietary name, and the National Drug Code; “(II)(aa) the number of participants and beneficiaries for whom a claim for such drug was filed during the reporting period, the total number of prescription claims for such drug (including original prescriptions and refills), and the total number of dosage units and total days supply of such drug for which a claim was filed during the reporting period; and “(bb) with respect to each claim or dosage unit described in item (aa), the type of dispensing channel used, such as retail, mail order, or specialty pharmacy; “(III) the wholesale acquisition cost, listed as cost per days supply and cost per dosage unit on date of dispensing; “(IV) the total out-of-pocket spending by participants and beneficiaries on such drug after application of any benefits under such plan or coverage, including participant and beneficiary spending through copayments, coinsurance, and deductibles (but not including any amounts spent by participants and beneficiaries on drugs not covered under such plan or coverage, or for which no claim was submitted to such plan or coverage); “(V) for any drug for which gross spending of the plan or coverage exceeded $10,000 during the reporting period— “(aa) a list of all other drugs in the same therapeutic category or class, including brand name drugs, biological products, generic drugs, or biosimilar biological products that are in the same therapeutic category or class as such drug; and “(bb) the rationale for preferred formulary placement of such drug in that therapeutic category or class, if applicable; and “(ii) a list of each therapeutic category or class of drugs for which a claim was filed under the health plan or health insurance coverage during the reporting period, and, with respect to each such therapeutic category or class of drugs during the reporting period— “(I) total gross spending by the plan; “(II) the number of participants and beneficiaries who filled a prescription for a drug in that category or class; “(III) if applicable to that category or class, a description of the formulary tiers and utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that category or class; “(IV) the total out-of-pocket spending by participants and beneficiaries, including participant and beneficiary spending through copayments, coinsurance, and deductibles; and “(V) for each drug— “(aa) the amount received, or expected to be received, from any entity in rebates, fees, alternative discounts, or other remuneration— “(AA) for claims incurred during the reporting period; or “(BB) that is related to utilization of drugs or drug spending; “(bb) the total net spending, after deducting rebates, price concessions, alternative discounts or other remuneration from drug manufacturers, by the health plan or health insurance coverage on that category or class of drugs; and “(cc) the average net spending per 30-day supply and per 90-day supply, incurred by the health plan or health insurance coverage and its participants and beneficiaries, among all drugs within the therapeutic class for which a claim was filed during the reporting period.
“(c) Enforcement.— “(1) FAILURE TO PROVIDE TIMELY INFORMATION.—An entity providing pharmacy benefits management services that violates subsection (a) or fails to provide information required under subsection (b) shall be subject to a civil monetary penalty in the amount of $10,000 for each day during which such violation continues or such information is not disclosed or reported. “(2) FALSE INFORMATION.—An entity providing pharmacy benefits management services that knowingly provides false information under this section shall be subject to a civil money penalty in an amount not to exceed $100,000 for each item of false information.
Each such report shall include, with respect to the applicable group health plan— “(A) information collected from a patient or copay assistance program administrator by such entity on the total amount of copayment assistance dollars paid, or copayment cards applied, or other discounts that were funded by the drug manufacturer with respect to the participants and beneficiaries in such plan; “(B) total gross spending on prescription drugs by the plan during the reporting period; “(C) total amount received, or expected to be received, by the plan from any entities, in rebates, fees, alternative discounts, and all other remuneration received from the entity or any third party (including group purchasing organizations) other than the plan administrator, related to utilization of drug or drug spending under such plan during the reporting period; “(D) the total net spending on prescription drugs by the plan during such reporting period; “(E) amounts paid, directly or indirectly, in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA) of the Employee Retirement Income Security Act of 1974) to brokerage houses, brokers, consultants, advisors, or any other individual or firm for the referral of the group health plan's business to the pharmacy benefits manager, identified by the recipient of such amounts; “(F)(i) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in the plan to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services under such plan, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives funded by an entity providing pharmacy benefit management services; “(ii) the percentage of total prescriptions charged to the plan, or participants and beneficiaries in such plan, that were dispensed by mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services; and “(iii) a list of all drugs dispensed by such affiliated pharmacy or pharmacy under common ownership and charged to the plan, or participants and beneficiaries of the plan, during the applicable period, and, with respect to each drug— “(I)(aa) the amount charged, per dosage unit, per 30-day supply, and per 90-day supply, with respect to participants and beneficiaries in the plan, to the plan; and “(bb) the amount charged, per dosage unit, per 30-day supply, and per 90-day supply, to participants and beneficiaries; “(II) the median amount charged to the plan, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of such plan; “(III) the interquartile range of the costs, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of that plan; “(IV) the lowest cost, per dosage unit, per 30-day supply, and per 90-day supply, for such drug, including amounts charged to the plan and participants and beneficiaries, that is available from any pharmacy included in the network of the plan; “(V) the net acquisition cost per dosage unit, per 30-day supply, and per 90-day supply, if the drug is subject to a maximum price discount; and “(VI) other information with respect to the cost of the drug, as determined by the Secretary, such as average sales price, wholesale acquisition cost, and national average drug acquisition cost per dosage unit or per 30-day supply, and per-90 day supply, for such drug, including amounts charged to the plan and participants and beneficiaries among all pharmacies included in the network of such plan; and “(G) in the case of a large employer— “(i) a list of each drug covered by such plan or entity providing pharmacy benefits management services for which a claim was filed during the reporting period, including, with respect to each such drug during the reporting period— “(I) the brand name, generic or non-proprietary name, and the National Drug Code; “(II)(aa) the number of participants and beneficiaries for whom a claim for such drug was filed during the reporting period, the total number of prescription claims for such drug (including original prescriptions and refills), and the total number of dosage units and total days supply of such drug for which a claim was filed during the reporting period; and “(bb) with respect to each claim or dosage unit described in item (aa), the type of dispensing channel used, such as retail, mail order, or specialty pharmacy; “(III) the wholesale acquisition cost, listed as cost per days supply and cost per dosage unit on date of dispensing; “(IV) the total out-of-pocket spending by participants and beneficiaries on such drug after application of any benefits under such plan, including participant and beneficiary spending through copayments, coinsurance, and deductibles (but not including any amounts spent by participants and beneficiaries on drugs not covered under such plan, or for which no claim was submitted to such plan); “(V) for any drug for which gross spending of the plan exceeded $10,000 during the reporting period— “(aa) a list of all other drugs in the same therapeutic category or class, including brand name drugs, biological products, generic drugs, or biosimilar biological products that are in the same therapeutic category or class as such drug; and “(bb) the rationale for preferred formulary placement of such drug in that therapeutic category or class, if applicable; and “(ii) a list of each therapeutic category or class of drugs for which a claim was filed under the plan during the reporting period, and, with respect to each such therapeutic category or class of drugs during the reporting period— “(I) total gross spending by the plan; “(II) the number of participants and beneficiaries who filled a prescription for a drug in that category or class; “(III) if applicable to that category or class, a description of the formulary tiers and utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that category or class; “(IV) the total out-of-pocket spending by participants and beneficiaries, including participant and beneficiary spending through copayments, coinsurance, and deductibles; and “(V) for each drug— “(aa) the amount received, or expected to be received, from any entity in rebates, fees, alternative discounts, or other remuneration— “(AA) for claims incurred during the reporting period; or “(BB) that is related to utilization of drugs or drug spending; “(bb) the total net spending, after deducting rebates, price concessions, alternative discounts or other remuneration from drug manufacturers, by the plan on that category or class of drugs; and “(cc) the average net spending per 30-day supply and per 90-day supply, incurred by the plan and its participants and beneficiaries, among all drugs within the therapeutic class for which a claim was filed during the reporting period. “(2) PRIVACY REQUIREMENTS.—Entities providing pharmacy benefits management services on behalf of a group health plan shall provide information under paragraph (1) in a manner consistent with the privacy, security, and breach notification regulations promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996, and shall restrict the use and disclosure of such information according to such privacy regulations.
“(c) Enforcement.— “(1) FAILURE TO PROVIDE TIMELY INFORMATION.—An entity providing pharmacy benefits management services that violates subsection (a) or fails to provide information required under subsection (b) shall be subject to a civil monetary penalty in the amount of $10,000 for each day during which such violation continues or such information is not disclosed or reported.
“(2) FALSE INFORMATION.—An entity providing pharmacy benefits management services that knowingly provides false information under this section shall be subject to a civil money penalty in an amount not to exceed $100,000 for each item of false information.

726. Oversight of pharmacy benefits manager services Read Opens in new tab

Summary AI

For plan years starting January 1, 2025, this section requires group health plans or entities providing pharmacy benefits management services to regularly share detailed reports with plan administrators. These reports must include information on drug spending, rebates, and other costs while ensuring compliance with privacy laws and allowing limited disclosure only to certain government entities and business associates.

Money References

Each such report shall include, with respect to the applicable group health plan or health insurance coverage— (A) information collected from a patient or copay assistance program administrator by such entity on the total amount of copayment assistance dollars paid, or copayment cards applied, or other discounts that were funded by the drug manufacturer with respect to the participants and beneficiaries in such plan or coverage; (B) total gross spending on prescription drugs by the plan or coverage during the reporting period; (C) total amount received, or expected to be received, by the plan or coverage from any entities, in rebates, fees, alternative discounts, and all other remuneration received from the entity or any third party (including group purchasing organizations) other than the plan administrator, related to utilization of drug or drug spending under such plan or coverage during the reporting period; (D) the total net spending on prescription drugs by the plan or coverage during such reporting period; (E) amounts paid, directly or indirectly, in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA)) to brokerage houses, brokers, consultants, advisors, or any other individual or firm for the referral of the group health plan's or health insurance issuer's business to the pharmacy benefits manager, identified by the recipient of such amounts; (F)(i) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in the plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services under such plan or coverage, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives funded by an entity providing pharmacy benefit management services; (ii) the percentage of total prescriptions charged to the plan, issuer, or participants and beneficiaries in such plan or coverage, that were dispensed by mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services; and (iii) a list of all drugs dispensed by such affiliated pharmacy or pharmacy under common ownership and charged to the plan, issuer, or participants and beneficiaries of the plan, during the applicable period, and, with respect to each drug— (I)(aa) the amount charged, per dosage unit, per 30-day supply, and per 90-day supply, with respect to participants and beneficiaries in the plan or coverage, to the plan or issuer; and (bb) the amount charged, per dosage unit, per 30-day supply, and per 90-day supply, to participants and beneficiaries; (II) the median amount charged to the plan or issuer, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of such plan or coverage; (III) the interquartile range of the costs, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of that plan or coverage; (IV) the lowest cost, per dosage unit, per 30-day supply, and per 90-day supply, for such drug, including amounts charged to the plan and participants and beneficiaries, that is available from any pharmacy included in the network of the plan or coverage; (V) the net acquisition cost per dosage unit, per 30-day supply, and per 90-day supply, if the drug is subject to a maximum price discount; and (VI) other information with respect to the cost of the drug, as determined by the Secretary, such as average sales price, wholesale acquisition cost, and national average drug acquisition cost per dosage unit or per 30-day supply, and per 90-day supply, for such drug, including amounts charged to the plan or issuer and participants and beneficiaries among all pharmacies included in the network of such plan or coverage; and (G) in the case of a large employer— (i) a list of each drug covered by such plan, issuer, or entity providing pharmacy benefits management services for which a claim was filed during the reporting period, including, with respect to each such drug during the reporting period— (I) the brand name, generic or non-proprietary name, and the National Drug Code; (II)(aa) the number of participants and beneficiaries for whom a claim for such drug was filed during the reporting period, the total number of prescription claims for such drug (including original prescriptions and refills), and the total number of dosage units and total days supply of such drug for which a claim was filed during the reporting period; and (bb) with respect to each claim or dosage unit described in item (aa), the type of dispensing channel used, such as retail, mail order, or specialty pharmacy; (III) the wholesale acquisition cost, listed as cost per days supply and cost per dosage unit on date of dispensing; (IV) the total out-of-pocket spending by participants and beneficiaries on such drug after application of any benefits under such plan or coverage, including participant and beneficiary spending through copayments, coinsurance, and deductibles (but not including any amounts spent by participants and beneficiaries on drugs not covered under such plan or coverage, or for which no claim was submitted to such plan or coverage); (V) for any drug for which gross spending of the plan or coverage exceeded $10,000 during the reporting period— (aa) a list of all other drugs in the same therapeutic category or class, including brand name drugs, biological products, generic drugs, or biosimilar biological products that are in the same therapeutic category or class as such drug; and (bb) the rationale for preferred formulary placement of such drug in that therapeutic category or class, if applicable; and (ii) a list of each therapeutic category or class of drugs for which a claim was filed under the health plan or health insurance coverage during the reporting period, and, with respect to each such therapeutic category or class of drugs during the reporting period— (I) total gross spending by the plan; (II) the number of participants and beneficiaries who filled a prescription for a drug in that category or class; (III) if applicable to that category or class, a description of the formulary tiers and utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that category or class; (IV) the total out-of-pocket spending by participants and beneficiaries, including participant and beneficiary spending through copayments, coinsurance, and deductibles; and (V) for each drug— (aa) the amount received, or expected to be received, from any entity in rebates, fees, alternative discounts, or other remuneration— (AA) for claims incurred during the reporting period; or (BB) that is related to utilization of drugs or drug spending; (bb) the total net spending, after deducting rebates, price concessions, alternative discounts or other remuneration from drug manufacturers, by the health plan or health insurance coverage on that category or class of drugs; and (cc) the average net spending per 30-day supply and per 90-day supply, incurred by the health plan or health insurance coverage and its participants and beneficiaries, among all drugs within the therapeutic class for which a claim was filed during the reporting period. (2) PRIVACY REQUIREMENTS.—Health insurance issuers offering group health insurance coverage and entities providing pharmacy benefits management services on behalf of a group health plan shall provide information under paragraph (1) in a manner consistent with the privacy, security, and breach notification regulations promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996, and shall restrict the use and disclosure of such information according to such privacy regulations. (3) DISCLOSURE AND REDISCLOSURE.

2799A–11. Oversight of pharmacy benefits manager services Read Opens in new tab

Summary AI

For plan years starting January 1, 2025, this section mandates that group health plans or insurance issuers, along with pharmacy benefits managers, must transparently report quarterly on various financial aspects, including drug spending and rebates, without restricting information to certain federal or state agencies. Non-compliance can result in significant fines, and plans must follow strict privacy standards while ensuring accurate and timely disclosures.

Money References

Each such report shall include, with respect to the applicable group health plan or health insurance coverage— (A) information collected from a patient or copay assistance program administrator by such entity on the total amount of copayment assistance dollars paid, or copayment cards applied, or other discounts that were funded by the drug manufacturer with respect to the participants and beneficiaries in such plan or coverage; (B) total gross spending on prescription drugs by the plan or coverage during the reporting period; (C) total amount received, or expected to be received, by the plan or coverage from any entities, in rebates, fees, alternative discounts, and all other remuneration received from the entity or any third party (including group purchasing organizations) other than the plan administrator, related to utilization of drug or drug spending under such plan or coverage during the reporting period; (D) the total net spending on prescription drugs by the plan or coverage during such reporting period; (E) amounts paid, directly or indirectly, in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA) of the Employee Retirement Income Security Act of 1974) to brokerage houses, brokers, consultants, advisors, or any other individual or firm for the referral of the group health plan's or health insurance issuer's business to the pharmacy benefits manager, identified by the recipient of such amounts; (F)(i) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in the plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services under such plan or coverage, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives funded by an entity providing pharmacy benefit management services; (ii) the percentage of total prescriptions charged to the plan, issuer, or participants and beneficiaries in such plan or coverage, that were dispensed by mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services; and (iii) a list of all drugs dispensed by such affiliated pharmacy or pharmacy under common ownership and charged to the plan, issuer, or participants and beneficiaries of the plan, during the applicable period, and, with respect to each drug— (I)(aa) the amount charged, per dosage unit, per 30-day supply, and per 90-day supply, with respect to participants and beneficiaries in the plan or coverage, to the plan or issuer; and (bb) the amount charged, per dosage unit, per 30-day supply, and per 90-day supply, to participants and beneficiaries; (II) the median amount charged to the plan or issuer, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of such plan or coverage; (III) the interquartile range of the costs, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of that plan or coverage; (IV) the lowest cost, per dosage unit, per 30-day supply, and per 90-day supply, for such drug, including amounts charged to the plan and participants and beneficiaries, that is available from any pharmacy included in the network of the plan or coverage; (V) the net acquisition cost per dosage unit, per 30-day supply, and per 90-day supply, if the drug is subject to a maximum price discount; and (VI) other information with respect to the cost of the drug, as determined by the Secretary, such as average sales price, wholesale acquisition cost, and national average drug acquisition cost per dosage unit or per 30-day supply, and per 90-day supply, for such drug, including amounts charged to the plan or issuer and participants and beneficiaries among all pharmacies included in the network of such plan or coverage; and (G) in the case of a large employer— (i) a list of each drug covered by such plan, issuer, or entity providing pharmacy benefits management services for which a claim was filed during the reporting period, including, with respect to each such drug during the reporting period— (I) the brand name, generic or non-proprietary name, and the National Drug Code; (II)(aa) the number of participants and beneficiaries for whom a claim for such drug was filed during the reporting period, the total number of prescription claims for such drug (including original prescriptions and refills), and the total number of dosage units and total days supply of such drug for which a claim was filed during the reporting period; and (bb) with respect to each claim or dosage unit described in item (aa), the type of dispensing channel used, such as retail, mail order, or specialty pharmacy; (III) the wholesale acquisition cost, listed as cost per days supply and cost per dosage unit on date of dispensing; (IV) the total out-of-pocket spending by participants and beneficiaries on such drug after application of any benefits under such plan or coverage, including participant and beneficiary spending through copayments, coinsurance, and deductibles (but not including any amounts spent by participants and beneficiaries on drugs not covered under such plan or coverage, or for which no claim was submitted to such plan or coverage); (V) for any drug for which gross spending of the plan or coverage exceeded $10,000 during the reporting period— (aa) a list of all other drugs in the same therapeutic category or class, including brand name drugs, biological products, generic drugs, or biosimilar biological products that are in the same therapeutic category or class as such drug; and (bb) the rationale for preferred formulary placement of such drug in that therapeutic category or class, if applicable; and (ii) a list of each therapeutic category or class of drugs for which a claim was filed under the health plan or health insurance coverage during the reporting period, and, with respect to each such therapeutic category or class of drugs during the reporting period— (I) total gross spending by the plan; (II) the number of participants and beneficiaries who filled a prescription for a drug in that category or class; (III) if applicable to that category or class, a description of the formulary tiers and utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that category or class; (IV) the total out-of-pocket spending by participants and beneficiaries, including participant and beneficiary spending through copayments, coinsurance, and deductibles; and (V) for each drug— (aa) the amount received, or expected to be received, from any entity in rebates, fees, alternative discounts, or other remuneration— (AA) for claims incurred during the reporting period; or (BB) that is related to utilization of drugs or drug spending; (bb) the total net spending, after deducting rebates, price concessions, alternative discounts or other remuneration from drug manufacturers, by the health plan or health insurance coverage on that category or class of drugs; and (cc) the average net spending per 30-day supply and per 90-day supply, incurred by the health plan or health insurance coverage and its participants and beneficiaries, among all drugs within the therapeutic class for which a claim was filed during the reporting period.
(c) Enforcement.— (1) FAILURE TO PROVIDE TIMELY INFORMATION.—An entity providing pharmacy benefits management services that violates subsection (a) or fails to provide information required under subsection (b) shall be subject to a civil monetary penalty in the amount of $10,000 for each day during which such violation continues or such information is not disclosed or reported. (2) FALSE INFORMATION.—An entity providing pharmacy benefits management services that knowingly provides false information under this section shall be subject to a civil money penalty in an amount not to exceed $100,000 for each item of false information.

9826. Oversight of pharmacy benefits manager services Read Opens in new tab

Summary AI

For plan years starting on or after January 1, 2025, this section requires pharmacy benefits managers to regularly report detailed spending information, including drug costs, discounts, and rebates, to group health plan administrators. The reports must follow specific privacy rules, and non-compliance or the submission of false information can result in significant penalties.

Money References

Each such report shall include, with respect to the applicable group health plan— (A) information collected from a patient or copay assistance program administrator by such entity on the total amount of copayment assistance dollars paid, or copayment cards applied, or other discounts that were funded by the drug manufacturer with respect to the participants and beneficiaries in such plan; (B) total gross spending on prescription drugs by the plan during the reporting period; (C) total amount received, or expected to be received, by the plan from any entities, in rebates, fees, alternative discounts, and all other remuneration received from the entity or any third party (including group purchasing organizations) other than the plan administrator, related to utilization of drug or drug spending under such plan during the reporting period; (D) the total net spending on prescription drugs by the plan during such reporting period; (E) amounts paid, directly or indirectly, in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA) of the Employee Retirement Income Security Act of 1974) to brokerage houses, brokers, consultants, advisors, or any other individual or firm for the referral of the group health plan's business to the pharmacy benefits manager, identified by the recipient of such amounts; (F)(i) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in the plan to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services under such plan, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives funded by an entity providing pharmacy benefit management services; (ii) the percentage of total prescriptions charged to the plan, or participants and beneficiaries in such plan, that were dispensed by mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services; and (iii) a list of all drugs dispensed by such affiliated pharmacy or pharmacy under common ownership and charged to the plan, or participants and beneficiaries of the plan, during the applicable period, and, with respect to each drug— (I)(aa) the amount charged, per dosage unit, per 30-day supply, and per 90-day supply, with respect to participants and beneficiaries in the plan, to the plan; and (bb) the amount charged, per dosage unit, per 30-day supply, and per 90-day supply, to participants and beneficiaries; (II) the median amount charged to the plan, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of such plan; (III) the interquartile range of the costs, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of that plan; (IV) the lowest cost, per dosage unit, per 30-day supply, and per 90-day supply, for such drug, including amounts charged to the plan and participants and beneficiaries, that is available from any pharmacy included in the network of the plan; (V) the net acquisition cost per dosage unit, per 30-day supply, and per 90-day supply, if the drug is subject to a maximum price discount; and (VI) other information with respect to the cost of the drug, as determined by the Secretary, such as average sales price, wholesale acquisition cost, and national average drug acquisition cost per dosage unit or per 30-day supply, and per-90 day supply, for such drug, including amounts charged to the plan and participants and beneficiaries among all pharmacies included in the network of such plan; and (G) in the case of a large employer— (i) a list of each drug covered by such plan or entity providing pharmacy benefits management services for which a claim was filed during the reporting period, including, with respect to each such drug during the reporting period— (I) the brand name, generic or non-proprietary name, and the National Drug Code; (II)(aa) the number of participants and beneficiaries for whom a claim for such drug was filed during the reporting period, the total number of prescription claims for such drug (including original prescriptions and refills), and the total number of dosage units and total days supply of such drug for which a claim was filed during the reporting period; and (bb) with respect to each claim or dosage unit described in item (aa), the type of dispensing channel used, such as retail, mail order, or specialty pharmacy; (III) the wholesale acquisition cost, listed as cost per days supply and cost per dosage unit on date of dispensing; (IV) the total out-of-pocket spending by participants and beneficiaries on such drug after application of any benefits under such plan, including participant and beneficiary spending through copayments, coinsurance, and deductibles (but not including any amounts spent by participants and beneficiaries on drugs not covered under such plan, or for which no claim was submitted to such plan); (V) for any drug for which gross spending of the plan exceeded $10,000 during the reporting period— (aa) a list of all other drugs in the same therapeutic category or class, including brand name drugs, biological products, generic drugs, or biosimilar biological products that are in the same therapeutic category or class as such drug; and (bb) the rationale for preferred formulary placement of such drug in that therapeutic category or class, if applicable; and (ii) a list of each therapeutic category or class of drugs for which a claim was filed under the plan during the reporting period, and, with respect to each such therapeutic category or class of drugs during the reporting period— (I) total gross spending by the plan; (II) the number of participants and beneficiaries who filled a prescription for a drug in that category or class; (III) if applicable to that category or class, a description of the formulary tiers and utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that category or class; (IV) the total out-of-pocket spending by participants and beneficiaries, including participant and beneficiary spending through copayments, coinsurance, and deductibles; and (V) for each drug— (aa) the amount received, or expected to be received, from any entity in rebates, fees, alternative discounts, or other remuneration— (AA) for claims incurred during the reporting period; or (BB) that is related to utilization of drugs or drug spending; (bb) the total net spending, after deducting rebates, price concessions, alternative discounts or other remuneration from drug manufacturers, by the plan on that category or class of drugs; and (cc) the average net spending per 30-day supply and per 90-day supply, incurred by the plan and its participants and beneficiaries, among all drugs within the therapeutic class for which a claim was filed during the reporting period.
— (1) FAILURE TO PROVIDE TIMELY INFORMATION.—An entity providing pharmacy benefits management services that violates subsection (a) or fails to provide information required under subsection (b) shall be subject to a civil monetary penalty in the amount of $10,000 for each day during which such violation continues or such information is not disclosed or reported.
(2) FALSE INFORMATION.—An entity providing pharmacy benefits management services that knowingly provides false information under this section shall be subject to a civil money penalty in an amount not to exceed $100,000 for each item of false information.

4. Information on prescription drugs Read Opens in new tab

Summary AI

A new section, SEC. 727, is added to the Employee Retirement Income Security Act, requiring health plans and insurers to allow pharmacies to inform patients about the cost differences between using their health insurance and paying out-of-pocket for prescription drugs, without penalizing the pharmacies. The law aims to ensure transparency in drug costs by preventing restrictions on such information sharing.

727. Information on prescription drugs Read Opens in new tab

Summary AI

A group health plan or health insurance issuer must allow pharmacies to inform participants or beneficiaries about any cost differences between the price with insurance and without insurance for prescription drugs. Additionally, pharmacies cannot be penalized for providing this information. The term "out-of-pocket cost" refers to the amount participants must pay, including any related cost-sharing like deductibles or copayments.

5. Advisory committee on the accessibility of certain information Read Opens in new tab

Summary AI

The Secretary of Labor must create an Advisory Committee by January 1, 2025, to help improve how certain information is made accessible and useful. This committee, consisting of 9 members, will continue until January 1, 2028.