Lawmakers in June voiced renewed interest in scrutinizing the role that pharmacy benefits managers (PBMs) play in our health care system.

PBMs are middlemen that create and administer drug formularies on behalf of health insurers, self-insured employers, Medicaid, and other payers. PBMs choose which drugs a plan will cover, purchase those drugs, set payment terms for their retail distribution (how much is the dispensing pharmacy reimbursed), and establish conditions that patients must meet in order to access those drugs (e.g., cost-sharing, prior authorization, step therapy, etc.). PBMs say that they use their volume-buying leverage to negotiate lower drug prices for health plans and, ultimately, consumers 鈥 but a lack of transparency into PBM operations, coupled with increasing consolidation of the industry, has prompted concerns about the role and impact of PBM business practices.

On June 7, the U.S. Federal Trade Commission announced that it would launch an inquiry into PBMs, requiring the nation鈥檚 six largest PBMs to provide information and records regarding their business practices. The FTC鈥檚 inquiry builds on the public record developed in response to its earlier request for information launched in February of this year. HFA and NHF submitted comments in connection with that RFI. Our comments described how specific PBM tactics limit access and shift costs to bleeding disorders patients, undermining the hard-won patient protections promised by the Affordable Care Act. HFA will continue working with allied stakeholders and with lawmakers to expose and end harmful PBM practices.

Quick Hits:

  • The Supreme Court published a number of decisions bearing on health care. Top of mind for many is the Court鈥檚 decision overruling Roe v. Wade. HFA鈥檚 statement on that decision can be found here. The Supreme Court also:
    • Unanimously rejected a Trump-era rule that would have cut Medicare reimbursements for 340B drugs dispensed by some safety-net hospitals;
    • Limited the amounts that plaintiffs can recover when they sue federally funded health care providers for discrimination on the basis of disability;
    • Ruled that state Medicaid programs can seek reimbursement for a patient鈥檚 future care, as well as past care when patients have received monetary settlements from third parties who have caused them harm.
  • The U.S. Department of Health and Human Services announced on June 23rd that Colorado received first-in-the-nation federal approval to create a public health insurance option for the 2023 plan year. The 鈥淐olorado Option鈥 will use federal funds to create a public health plan designed to make coverage more affordable and accessible for nearly 10,000 Coloradans.
  • HHS issued a Fact Sheet outlining what will happen to ACA premiums if enhanced American Rescue Plan Act subsidies are allowed to expire at the end of 2022. If Congress doesn鈥檛 act to extend these subsidies, HHS projects that many consumers will see their premiums skyrocket, and potentially 3 million Americans could lose their health insurance. HFA and coalition allies continue to press Congress to extend the subsidies and avert these harmful impacts.
  • The U.S. Centers for Medicare and Medicaid Services released guidance to insurers that offer individual health insurance plans, saying that issuers may not pay reduced or no commissions to agents/brokers who assist with 鈥special enrollment period鈥 enrollments (i.e., enrollments keyed to 鈥渜ualifying life events鈥 occurring outside of the annual open enrollment period). CMS advised that such differential compensation constitutes a discriminatory marketing practice, as it discourages agents and brokers from marketing to and enrolling consumers with significant health needs.

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