Key Moves CFOs Must Make Amid Price Transparency and PBM Reform

A new bill may cause a shake-up for hospital and health systems.

The Lower Costs, More Transparency Act, a bipartisan healthcare policy bill, recently passed the House of Representatives, setting the stage for a potential shake-up for healthcare organizations.

This legislation aims to increase hospital price transparency and curb certain practices by pharmacy benefit managers (PBMs).

But why is it significant?

Well, of particular significance is the proposal to equalize payments for drugs in Medicare, whether or not they are administered in hospital outpatient departments or doctor's offices.

Additionally, the bill seeks to postpone payment cuts for hospitals catering to high volumes of uninsured patients until 2026, a delay from the previously anticipated 2023.

Healthcare organizations also need to be on the lookout for increased price transparency scrutiny, especially as many organizations are still struggling with adherence.  

What does it mean for CFOs?

Crucial for hospital and health system CFOs is the potential impact of the bill's site-neutral policy on drug reimbursements in Medicare.

Hospitals' opposition to the equalization of drug payments, contending that it would cut into hospital revenue, underscores the financial implications for healthcare institutions

With the legislation projected to reduce hospital payments by over $3.7 billion over a decade, CFOs must carefully navigate the financial landscape amid evolving policies.

The bill also introduces transparency reforms for PBMs, addressing issues of spread pricing and mandating the disclosure of rebates and compensation. This legislative push aligns with broader efforts to scrutinize and regulate PBMs, acknowledging their role in influencing rising drug prices.

For CFOs, adapting strategies to comply with potential transparency requirements and understanding the financial implications of proposed changes will be pivotal.