Congress leaves employer-focused healthcare reforms in limbo
The future is now uncertain for renewal of expired telehealth flexibility for health savings account (HSA)-qualifying plans, new pharmacy benefit manager (PBM) transparency standards, and other employer-backed healthcare legislation after Congress declined to add the provisions to a newly enacted government funding measure.
The provisions were part of a bipartisan, bicameral healthcare package included in a December government funding bill but dropped just before final passage amid concerns from President Donald Trump and Elon Musk that the broader funding bill contained too many unrelated provisions. Lawmakers fell short last week in attempts to attach the package to the six-month government funding bill enacted on March 15. A bid in the Senate to advance it as standalone legislation also stalled. The package included a two-year extension of pandemic-related telehealth relief (through plan years beginning in 2025 and 2026) for HSA-qualifying high-deductible health plans that expired on January 1 for calendar-year plans (later for noncalendar-year plans).
It would also require PBMs to semi-annually (or, at the request of a plan sponsor, not less frequently than quarterly) provide employer-sponsored health plans with detailed data on prescription drug spending, including the acquisition cost of drugs, total out-of-pocket spending, formulary placement rationale, aggregate rebate information, and their direct and indirect compensation. In addition, PBMs would be required to pass through 100% of the rebates, fees, and discounts they get from drug manufacturers to employer plans.
PBM reforms in public programs would, among other things, eliminate the link between PBM compensation and list drug prices in Medicare and ban spread pricing in Medicaid. A provision to encourage site-neutral payment policies in Medicare would require each off-campus hospital outpatient department to use a unique billing code for that facility in order to bill the program.
The measure also includes reforms aimed at streamlining the pathway for lower-cost generic medicines to enter the market.
How Congress might proceed with these healthcare changes is unclear. Some Republicans are eyeing the PBM reforms to Medicaid and Medicare, projected to bring major savings, as revenue offsets in their party-line budget reconciliation legislation aimed at passing President Trump’s agenda on taxes and other issues.
But breaking up a carefully negotiated bipartisan healthcare package to use key parts for a bill that Democrats will never support would cloud prospects for the employer-focused provisions. Those prospects probably won’t become clearer until after the Republican effort to get their sweeping reconciliation bill over the finish line this year.
