PBM, mental health legislation advances through Senate Finance Committee

Legislation addressing Medicare payments and mental health and pharmacy benefit managers (PBMs) advanced through the Senate Finance Committee on Wednesday in a nearly unanimous vote. 

Other than Sen. Ron Johnson (R-Wis.) who did not vote, 26 members of the panel voted to advance the package, adding to the bipartisan pressure for Congress to act on reforms to certain pharmacy intermediary business practices. 

The PBM provisions passed Wednesday build on earlier legislation the committee passed in July and will “root out middlemen tactics that drive up health costs for patients and taxpayers,” Committee Chair Sen. Ron Wyden (D-Ore.) said in a statement. 

“These measures steer America’s prescription drug market towards a state of rationality where the incentives are always to have lower costs for patients and taxpayers,” Wyden said. 

The most impactful provision in the bill would create a list of discounted drugs with high rebates in Medicare Part D where Medicare beneficiaries will pay the net price for the drug rather than the list price after patients meet their deductibles 

The net price includes rebates, but the list price does not. The provision aims to prevent situations where insurers are paying less to cover the drugs than patients are.  

On mental health, the legislation would require Medicare Advantage plans to keep accurate directories of providers, eliminating what Wyden called “ghost networks.” 

“Ghost networks will be a thing of the past with the consumer protections in this bill — because insurers will have to actually cover the mental health providers listed in their directories,” Wyden said.  

The legislation includes extensions of expiring Medicare and Medicaid payment provisions. It delays cuts to safety-net hospitals that treat low-income patients for two years, and it provides another year of bonus payments to physicians who move away from the practice of “fee-for-service” medicine toward value-based care. 

The bill is completely paid for, as it balances the savings from the new provisions with the cost of the extensions, making it more likely to fit into a year-end government spending bill.