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House Hearing Explores Causes of High Healthcare Costs in America

House Hearing Explores Causes of High Healthcare Costs in America

What happened in Congress this week?

Congress has started with an uncharacteristically quiet approach to healthcare in 2024. Physicians are still awaiting a fix to Medicare reimbursement cuts. GOP Doc Caucus Vice Chair Rep. Larry Bucshon, MD (R-IN) called the lack of remedy “appalling” and offered hope for physicians, saying, “I think we’ll get most of those cuts mitigated, either at the end of this month or in March.”

Both chambers of Congress have continued to hold hearings aiming to address the causes of high healthcare costs in America, such as Wednesday’s House Energy & Commerce Subcommittee on Health’s hearing on “Legislative Proposals To Support Patients and Caregivers.”

With high intra-party disagreement and other priorities so far this year, CAI is keeping a close eye on whether Congress will turn to address healthcare issues more directly as we move forward in 2024.

House Hearing Explores Causes of High Healthcare Costs in America

For good reason, Congress has remained focused on finding ways to lower healthcare costs for patients. Notably, on January 31st, the House Energy & Commerce’s Subcommittee on Health held a hearing called “Health Care Spending in the United States: Unsustainable for Patients, Employers, and Taxpayers”.

The hearing explored the nation’s high healthcare spending from multiple perspectives. It delved into the disparities in prices across different geographical areas and health plans, shedding light on the proliferation of high-deductible health plans. These plans, despite offering lower premiums, often disproportionately burden individuals who struggle to afford healthcare due to their high out of pocket costs.

Overall, the hearing highlighted that there appears to be a discrepancy in the correlation between federal policies and the cost of care. While both parties acknowledge the issue of prescription drug prices, they diverge on the underlying causes, resulting in differing proposals to address the gap. Democrats emphasized the role of policies such as the Inflation Reduction Act (IRA) empowering Medicare to negotiate prescription drug prices with manufacturers on behalf of Medicare beneficiaries whereas Republicans generally supported greater transparency as a means of reducing prescription drug costs for patients.

Throughout the hearing, several recurring themes emerged including discussions on site-neutral payments, vertical integration, and consolidation within the healthcare sector. The conversation also touched upon federal subsidies for health insurance, premium tax credits under the Affordable Care Act (ACA), Medicare Advantage, pharmacy benefit manager (PBM) practices, and varying perspectives on the No Surprises Act.

The wide-ranging nature of these themes further underscores that there are likely numerous factors contributing to high healthcare costs in the United States. Consequently, identifying the most effective starting point to address the issue can be challenging.

One example of an approach discussed during the hearing was the House passing the “Lower Costs, More Transparency Act” (HR 5378) in December 2023. If signed into law, this act would formalize and enhance price transparency for both providers and insurers. It proposes to broaden transparency requirements for clinical labs, imaging services, and ambulatory surgical centers. Additionally, the act seeks to regulate Pharmacy Benefit Managers (PBMs) by mandating the publication of data pertaining to spending, rebates, and fees. While this bill passed with broad bipartisan support in the House, it is now awaiting consideration in the Senate which has not shown a similar interest in this bill.

Capitol Insights will continue to report on congressional legislation aimed at reducing healthcare costs in America as new bills are introduced or existing bills gain momentum.

Top Stories in Healthcare Policy

On February 6th, CMS issued guidance regarding the use of artificial intelligence (AI) and algorithms in making coverage decisions for Medicare Advantage plans, expressing concerns about the potential for bias. AI and algorithms cannot be used to deny coverage, as decisions should be based on an individual’s medical history rather than other data sets.

On Thursday, February 15th, the House Committee on Veterans’ Affairs held a hearing on Artificial Intelligence at the VA. This hearing follows last week’s Senate Finance Committee hearing on AI in healthcare as lawmakers continue to consider how to regulate and keep up with AI as it is constantly changing.

On Friday, February 9th, a bipartisan group of senators announced a Medicare payment reform working group with goals to propose reforms to the physician fee schedule and make updates to the Medicare Access and CHIP Reauthorization Act.

The CDC is considering changing COVID-19 isolation guidelines. Current guidance recommends a five-day isolation period for individuals who test positive. However, the new guidance would be based on symptoms.

Many states are introducing legislation addressing prior authorization requirements, which often impose administrative burdens on providers and deny care to patients. These efforts by states impose more limitations on the process than the federal prior authorization rules that CMS finalized this year.

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Record Breaking 2024 ACA Enrollment

Capitol Insights NewsletterAuthors: Luke Schwartz, Matt Reiter, and Caroline OliverThere were no major healthcare developments in Congress this week. Next Wednesday January 31, CAI looks forward to the Senate HELP Committee’s Hearing on “Authorization for...

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The Author

Luke Schwartz

Government Relations Associate

Luke joined Capitol Associates in January 2024 and is dedicated to CAI’s general legislative and regulatory health policy profile. He is particularly knowledgeable about reimbursement policy and is experienced in navigating the health policy tenets of the Inflation Reduction Act. Luke brings years of expertise in health policy to CAI, having worked for Avalere, a health policy consulting firm, the Duke Margolis Institute for Health Policy, and Verily Life Sciences.

Supporting Authors:

Matt Reiter, Principal 

Caroline Oliver, Spring intern

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