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H.R. 5378 — what changed

Lower Costs, More Transparency Act

From Introduced in House to Engrossed in House. 13 sections amended between Introduced in House and Engrossed in House.

Sec. 102 Clinical diagnostic laboratory test price transparency

Section 1846 of the Social Security Act (42 U.S.C. 1395w–2) is amended—

(1)
in the header, by inserting “and additional requirements” after “sanctions”; and
(2)
by adding at the end the following new subsection:

“(c) Price transparency requirement

“(1) In general—Beginning January 1, 2026, any applicable laboratory that receives payment under this title for furnishing any specified clinical diagnostic laboratory test under this title shall—

“(A) make publicly available on an internet website the information described in paragraph (2) with respect to each such specified clinical diagnostic laboratory test that such laboratory so furnishes; and

“(B) ensure that such information is updated not less frequently than annually.

“(2) Information described—For purposes of paragraph (1), the information described in this paragraph is, with respect to an applicable laboratory and a specified clinical diagnostic laboratory test, the following:

“(A) The discounted cash price for such test (or, if no such price exists, the gross charge for such test).

changed “(B) The deidentified minimum payer-specific negotiated charge between such laboratory and any third party payer for such test.

“(C) The deidentified maximum payer-specific negotiated charge between such laboratory and any third party payer for such test.

“(3) Uniform method and format—Not later than January 1, 2026, the Secretary shall establish a standard, uniform method and format for applicable laboratories to use in compiling and making public information pursuant to paragraph (1). Such method and format—

“(A) may be similar to any template made available by the Centers for Medicare & Medicaid Services (as described in section 1899C(a)(2)(C)(ii));

“(B) shall meet such standards as determined appropriate by the Secretary in order to ensure the accessibility and usability of such information; and

“(C) shall be updated as determined appropriate by the Secretary, in consultation with stakeholders.

“(4) Inclusion of ancillary services—Any price or rate for a specified clinical diagnostic laboratory test available to be furnished by an applicable laboratory made publicly available in accordance with paragraph (1) shall include the price or rate (as applicable) for any ancillary item or service (such as specimen collection services) that would normally be furnished by such laboratory as part of such test, as specified by the Secretary.

“(5) Enforcement

“(A) In general—In the case that the Secretary determines that an applicable laboratory is not in compliance with paragraph (1)—

“(i) not later than 30 days after such determination, the Secretary shall notify such laboratory of such determination; and

“(ii) if such laboratory continues to fail to comply with such paragraph after the date that is 90 days after such notification is sent, the Secretary may impose a civil monetary penalty in an amount not to exceed $300 for each (beginning with the day on which the Secretary first determined that such laboratory was failing to comply with such paragraph) during which such failure is ongoing.

“(B) Increase authority—In applying this paragraph with respect to violations occurring in 2027 or a subsequent year, the Secretary may through notice and comment rulemaking increase the per day limitation on civil monetary penalties under subparagraph (A)(ii).

“(C) Application of certain provisions—The provisions of section 1128A (other than subsections (a) and (b) of such section) shall apply to a civil monetary penalty imposed under this paragraph in the same manner as such provisions apply to a civil monetary penalty imposed under subsection (a) of such section.

“(6) Provision of technical assistance—The Secretary shall, to the extent practicable, provide technical assistance relating to compliance with the provisions of this subsection to applicable laboratories requesting such assistance.

“(7) Definitions—In this subsection:

“(A) Applicable laboratory—The term applicable laboratory has the meaning given such term in section 414.502, of title 42, Code of Federal Regulations (or a successor regulation), except that such term does not include a laboratory with respect to which standard charges and prices for specified clinical diagnostic laboratory tests furnished by such laboratory are made available by a hospital pursuant to section 1899C or section 2718(f) of the Public Health Service Act.

“(B) Discounted cash price—The term discounted cash price means the charge that applies to an individual who pays cash, or cash equivalent, for an item or service.

“(C) Gross charge—The term gross charge means the charge for an individual item or service that is reflected on an applicable laboratory’s chargemaster, absent any discounts.

“(D) Payer-specific negotiated charge—The term payer-specific negotiated charge means the charge that an applicable laboratory has negotiated with a third party payer for an item or service.

“(E) Specified clinical diagnostic laboratory test—the term specified clinical diagnostic laboratory test means a clinical diagnostic laboratory test that is included on the list of shoppable services specified by the Centers for Medicare & Medicaid Services (as described in section 1899C(a)(2)(A)(ii)(I)), other than such a test that is only available to be furnished by a single provider of services or supplier.

“(F) Third party payer—The term third party payer means an entity that is, by statute, contract, or agreement, legally responsible for payment of a claim for a health care item or service.”

Sec. 104 Ambulatory surgical center price transparency

Section 1834 of the Social Security Act (42 U.S.C. 1395m) is amended by adding at the end the following new subsection:

“(aa) Ambulatory surgical center price transparency

changed “(1) In general—Beginning January 1, 2026, each specified ambulatory surgical center that receives payment under this title for furnishing items and services shall comply with the price transparency requirement described in paragraph (2).

“(2) Requirement described

changed “(A) In general—For purposes of paragraph (1), the price transparency requirement described in this subsection is, with respect to a specified an ambulatory surgical center, that such surgical center in accordance with a method and format established by the Secretary under subparagraph (C), compile and make public (without subscription and free of charge), for each year—

“(i) all of the ambulatory surgical center’s standard charges (including the information described in subparagraph (B)) for each item and service furnished by such surgical center;

“(ii) information on the ambulatory surgical center’s prices (including the information described in subparagraph (B)) for as many of the Centers for Medicare & Medicaid Services-specified shoppable services that are furnished by such surgical center, and as many additional ambulatory surgical center-selected shoppable services (or all such additional services, if such surgical center furnishes fewer than 300 shoppable services) as may be necessary for a combined total of at least 300 shoppable services; and

“(iii) with respect to each Centers for Medicare & Medicaid Services-specified shoppable service that is not furnished by the ambulatory surgical center, an indication that such service is not so furnished.

changed “(B) Information described—For purposes of subparagraph (A), the information described in this subparagraph is, with respect to standard charges and prices (as applicable) made public by a specified an ambulatory surgical center, the following:

“(i) A plain language description of each item or service, accompanied by, as applicable, the Healthcare Common Procedure Coding System code, the diagnosis-related group, the national drug code, or other identifier used or approved by the Centers for Medicare & Medicaid Services.

“(ii) The gross charge, as applicable, expressed as a dollar amount, for each such item or service.

“(iii) The discounted cash price, as applicable, expressed as a dollar amount, for each such item or service (or, in the case no discounted cash price is available for an item or service, the median cash price charged to self-pay individuals for such item or service for the previous three years, expressed as a dollar amount).

“(iv) The current payer-specific negotiated charges, clearly associated with the name of the third party payer and plan and expressed as a dollar amount, that applies to each such item or service.

“(v) The de-identified maximum and minimum negotiated charges, as applicable, for each such item or service.

“(vi) Any other additional information the Secretary may require for the purpose of improving the accuracy of, or enabling consumers to easily understand and compare, standard charges and prices for an item or service, except information that is duplicative of any other reporting requirement under this subsection.

changed “(C) Uniform method and format—Not later than January 1, 2026, the Secretary shall establish a standard, uniform method and format for specified ambulatory surgical centers to use in making public standard charges and a standard, uniform method and format for such centers to use in making public prices pursuant to subparagraph (A). Any such method and format—

“(i) shall, in the case of such charges made public by an ambulatory surgical center, ensure that such charges are made available in a machine-readable format (or successor technology);

“(ii) may be similar to any template made available by the Centers for Medicare & Medicaid Services as of the date of the enactment of this paragraph;

“(iii) shall meet such standards as determined appropriate by the Secretary in order to ensure the accessibility and usability of such charges and prices; and

“(iv) shall be updated as determined appropriate by the Secretary, in consultation with stakeholders.

changed “(3) Monitoring compliance—The Secretary shall, through notice and comment rulemaking and in consultation with the Inspector General of the Department of Health and Human Services, establish a process to monitor compliance with this subsection. Such process shall ensure that each specified ambulatory surgical center’s compliance with this subsection is reviewed not less frequently than once every 3 years.

“(4) Enforcement

changed “(A) In general—In the case of a specified an ambulatory surgical center that fails to comply with the requirements of this subsection—

“(i) the Secretary shall notify such ambulatory surgical center of such failure not later than 30 days after the date on which the Secretary determines such failure exists; and

“(ii) upon request of the Secretary, the ambulatory surgical center shall submit to the Secretary, not later than 45 days after the date of such request, a corrective action plan to comply with such requirements.

“(B) Civil monetary penalty

changed “(i) In general—In addition to any other enforcement actions or penalties that may apply under another provision of law, a specified an ambulatory surgical center that has received a notification under subparagraph (A)(i) and fails to comply with the requirements of this subsection by the date that is 90 days after such notification (or, in the case of an ambulatory surgical center that has submitted a corrective action plan described in subparagraph (A)(ii) in response to a request so described, by the date that is 90 days after such submission) shall be subject to a civil monetary penalty of an amount specified by the Secretary for each subsequent day during which such failure is ongoing (not to exceed $300 per day).

changed “(ii) Increase authority—In applying this subparagraph with respect to violations occurring in 2027 or a subsequent year, the Secretary may through notice and comment rulemaking increase the limitation on the per day amount of any penalty applicable to a specified an ambulatory surgical center under clause (i).

“(iii) Application of certain provisions—The provisions of section 1128A (other than subsections (a) and (b) of such section) shall apply to a civil monetary penalty imposed under this subparagraph in the same manner as such provisions apply to a civil monetary penalty imposed under subsection (a) of such section.

“(iv) Authority to waive or reduce penalty

changed “(I) In general—Subject to subclause (II), the Secretary may waive any penalty, or reduce any penalty by not more than 75 percent, otherwise applicable under this subparagraph with respect to a specified an ambulatory surgical center located in a rural or underserved area if the Secretary certifies that imposition of such penalty would result in an immediate threat to access to care for individuals in the service area of such surgical center.

changed “(II) Limitation on application—The Secretary may not elect to waive a penalty under subclause (I) with respect to a specified an ambulatory surgical center more than once in a 6-year period and may not elect to reduce such a penalty with respect to such a surgical center more than once in such a period. Nothing in the preceding sentence shall be construed as prohibiting the Secretary from both waiving and reducing a penalty with respect to a specified an ambulatory surgical center during a 6-year period.

“(5) Definitions—For purposes of this section:

“(A) Discounted cash price—The term discounted cash price means the charge that applies to an individual who pays cash, or cash equivalent, for a item or service furnished by an ambulatory surgical center.

“(B) Federal health care program—The term Federal health care program has the meaning given such term in section 1128B.

changed “(C) Gross charge—The term gross charge means the charge for an individual item or service that is reflected on a specified an ambulatory surgical center’s chargemaster, absent any discounts.

“(D) Group health plan; group health insurance coverage; individual health insurance coverage—The terms group health plan, group health insurance coverage, and individual health insurance coverage have the meaning given such terms in section 2791 of the Public Health Service Act.

changed “(E) Payer-specific negotiated charge—The term payer-specific negotiated charge means the charge that a specified an ambulatory surgical center has negotiated with a third party payer for an item or service.

“(F) Shoppable service—The term shoppable service means a service that can be scheduled by a health care consumer in advance and includes all ancillary items and services customarily furnished as part of such service.

changed “(G) Specified ambulatory surgical center—The Third party payer—The term specified ambulatory surgical center third party payer means an ambulatory surgical center with respect to which a hospital (or any person with an ownership entity that is, by statute, contract, or control interest (as defined in section 1124(a)(3)) in agreement, legally responsible for payment of a hospital) is claim for a person with an ownership health care item or control interest (as so defined).service.”

removed “(H) Third party payer—The term third party payer means an entity that is, by statute, contract, or agreement, legally responsible for payment of a claim for a health care item or service.”

Sec. 105 Health coverage price transparency

(a)
Price transparency requirements—
(1)
IRC—
(A)
In general— Section 9819 of the Internal Revenue Code of 1986 is amended to read as follows:

“9819. Transparency in coverage

“(a) Cost-sharing transparency

“(1) In general—For plan years beginning on or after January 1, 2026, a group health plan shall permit a participant or beneficiary to learn the amount of cost-sharing (including deductibles, copayments, and coinsurance) under the participant or beneficiary’s plan that the participant or beneficiary would be responsible for paying with respect to the furnishing of a specific item or service by a provider in a timely manner upon the request of the participant or beneficiary. At a minimum, such information shall include the information specified in paragraph (2) and shall be made available to such participant or beneficiary through a self-service tool that meets the requirements of paragraph (3) or, at the option of such participant or beneficiary, through a paper disclosure or phone or other electronic disclosure (as selected by such participant or beneficiary and provided at no cost to such participant or beneficiary) that meets such requirements as the Secretary may specify.

“(2) Specified information—For purposes of paragraph (1), the information specified in this paragraph is, with respect to an item or service for which benefits are available under a group health plan furnished by a health care provider to a participant or beneficiary of such plan, the following:

“(A) If such provider is a participating provider with respect to such item or service, the in-network rate (as defined in subsection (c)) for such item or service.

“(B) If such provider is not a participating provider with respect to such item or service, the maximum allowed amount or other dollar amount that such plan or coverage will recognize as payment for such item or service, along with a notice that such participant or beneficiary may be liable for additional charges.

“(C) The estimated amount of cost sharing (including deductibles, copayments, and coinsurance) that the participant or beneficiary will incur for such item or service (which, in the case such item or service is to be furnished by a provider described in subparagraph (B), shall be calculated using the maximum allowed amount or other dollar amount described in such subparagraph).

“(D) The amount the participant or beneficiary has already accumulated with respect to any deductible or out of pocket maximum under the plan (broken down, in the case separate deductibles or maximums apply to separate participants and beneficiaries enrolled in the plan, by such separate deductibles or maximums, in addition to any cumulative deductible or maximum).

“(E) In the case such plan imposes any frequency or volume limitations with respect to such item or service (excluding medical necessity determinations), the amount that such participant or beneficiary has accrued towards such limitation with respect to such item or service.

“(F) Any prior authorization, concurrent review, step therapy, fail first, or similar requirements applicable to coverage of such item or service under such plan.

“(G) Any shared savings (such as any credit, payment, or other benefit provided by such plan) available to the participant or beneficiary with respect to such item or service furnished by such provider known at the time such request is made.

“(3) Self-service tool—For purposes of paragraph (1), a self-service tool established by a group health plan meets the requirements of this paragraph if such tool—

“(A) is based on an Internet website (or successor technology specified by the Secretary);

“(B) provides for real-time responses to requests described in paragraph (1);

“(C) is updated in a manner such that information provided through such tool is timely and accurate at the time such request is made;

“(D) allows such a request to be made with respect to an item or service furnished by—

changed “(i) a specific provider that is a participating provider with respect to such item or service;service; or

changed “(ii) all providers that are participating providers with respect to such item or service; orservice;

removed “(iii) a provider in a relevant geographic region that is not described in clause (i) or (ii);

“(E) provides that such a request may be made with respect to an item or service through use of the billing code for such item or service or through use of a descriptive term for such item or service; and

“(F) meets any other requirement determined appropriate by the Secretary to ensure the accessibility and usability of information provided through such tool.

“(b) Rate and payment information

“(1) In general—For plan years beginning on or after January 1, 2026, each group health plan (other than a grandfathered health plan (as defined in section 1251(e) of the Patient Protection and Affordable Care Act)) shall, for each month, not later than the tenth day of such month, make available to the public the rate and payment information described in paragraph (2) in accordance with paragraph (3).

“(2) Rate and payment information described—For purposes of paragraph (1), the rate and payment information described in this paragraph is, with respect to a group health plan, the following:

“(A) With respect to each item or service (other than a drug) for which benefits are available under such plan, the in-network rate (expressed as a dollar amount) in effect as of the date on which such information is made public with each provider that is a participating provider with respect to such item or service.

“(B) With respect to each drug (identified by national drug code) for which benefits are available under such plan—

“(i) the in-network rate (expressed as a dollar amount) in effect as of the first day of the month in which such information is made public with each provider that is a participating provider with respect to such drug; and

“(ii) the average amount paid by such plan (net of rebates, discounts, and price concessions) for such drug dispensed or administered during the 90-day period beginning 180 days before such date of publication to each provider that was a participating provider with respect to such drug, broken down by each such provider, other than such an amount paid to a provider that, during such period, submitted fewer than 20 claims for such drug to such plan.

“(C) With respect to each item or service for which benefits are available under such plan, the amount billed, and the amount allowed by the plan, for each such item or service furnished during the 90-day period specified in subparagraph (B) by a provider that was not a participating provider with respect to such item or service, broken down by each such provider.

“(3) Manner of publication—Rate and payment information required to be made available under this subsection shall be so made available in dollar amounts through separate machine-readable files (and any successor technology, such as application program interface technology, determined appropriate by the Secretary) corresponding to the information described in each of subparagraphs (A) through (C) of paragraph (2) that meet such requirements as specified by the Secretary through subregulatory guidance. Such requirements shall ensure that such files are limited to an appropriate size, do not include disclosure of unnecessary duplicative information contained in other files made available under this subsection, are made available in a widely available format through a publicly available website that allows for information contained in such files to be compared across group health plans and group or individual health insurance coverage, and are accessible to individuals at no cost and without the need to establish a user account or provide other credentials.

“(4) User instructions—Each group health plan shall make available to the public instructions written in plain language explaining how individuals may search for information described in paragraph (2) in files submitted in accordance with paragraph (3). The Secretary shall develop and publish through subregulatory guidance a template that such a plan may use in developing instructions for purposes of the preceding sentence.

“(5) Summary—For each plan year beginning on or after January 1, 2026, each group health plan shall make public a data file, in a manner that ensures that such file may be easily downloaded and read by standard spreadsheet software and that meets such requirements as established by the Secretary, containing a summary of all rate and payment information made public by such plan with respect to such plan during such plan year. Such file shall include the following:

“(A) The mean, median, and interquartile range of the in-network rate, and the amount allowed for an item or service when not furnished by a participating provider, in effect as of the first day of such plan year for each item or service (identified by payer identifier approved or used by the Centers for Medicare & Medicaid Services) for which benefits are available under the plan, broken down by the type of provider furnishing the item or service and by the geographic area in which such item or service is furnished.

“(B) Trends in payment rates for such items and services over such plan year, including an identification of instances in which such rates have increased, decreased, or remained the same.

“(C) The name of such plan, a description of the type of network of participating providers used by such plan, and a description of whether such plan is self-insured or fully-insured.

“(D) For each item or service which is paid as part of a bundled rate—

“(i) a description of the formulae, pricing methodologies, or other information used to calculate the payment rate for such bundle; and

“(ii) a list of the items and services included in such bundle.

“(E) The percentage of items and services that are paid for on a fee-for-service basis and the percentage of items and services that are paid for as part of a bundled rate, capitated payment rate, or other alternative payment model.

“(6) Attestation—Each group health plan shall post, along with rate and payment information made public by such plan, an attestation that such information is complete and accurate.

“(c) Accessibility—A group health plan shall take reasonable steps (as specified by the Secretary) to ensure that information provided in response to a request described in subsection (a), and rate and payment information made public under subsection (b), is provided in plain, easily understandable language and that interpretation, translations, and assistive services are provided to those with limited English proficiency and those with disabilities.

“(d) Definitions—In this section:

“(1) Participating provider—The term participating provider means, with respect to an item or service and a group health plan, a physician or other health care provider who is acting within the scope of practice of that provider’s license or certification under applicable State law and who has a contractual relationship with the plan, respectively, for furnishing such item or service under the plan, and includes facilities, respectively.

“(2) Provider—The term provider includes a health care facility.

“(3) In-network rate—The term in-network rate means, with respect to a group health plan and an item or service furnished by a provider that is a participating provider with respect to such plan and item or service, the contracted rate (reflected as a dollar amount) in effect between such plan and such provider for such item or service, regardless of whether such rate is calculated based on a set amount, a fee schedule, or an amount derived from another amount, or a formula, or other method.”

(B)
Clerical amendment— The item relating to section 9819 of the table of sections for subchapter B of chapter 100 of the Internal Revenue Code of 1986 is amended to read as follows:
(2)
PHSA— Section 2799A–4 of the Public Health Service Act (42 U.S.C. 300gg–114) is amended to read as follows:

“2799A–4. Transparency in coverage

“(a) Cost-sharing transparency

“(1) In general—For plan years beginning on or after January 1, 2026, a group health plan and a health insurance issuer offering group or individual health insurance coverage shall permit an individual enrolled under such plan or coverage to learn the amount of cost-sharing (including deductibles, copayments, and coinsurance) under the individual’s plan or coverage that the individual would be responsible for paying with respect to the furnishing of a specific item or service by a provider in a timely manner upon the request of the individual. At a minimum, such information shall include the information specified in paragraph (2) and shall be made available to such individual through a self-service tool that meets the requirements of paragraph (3) or, at the option of such individual, through a paper disclosure or phone or other electronic disclosure (as selected by such individual and provided at no cost to such individual) that meets such requirements as the Secretary may specify.

“(2) Specified information—For purposes of paragraph (1), the information specified in this paragraph is, with respect to an item or service for which benefits are available under a group health plan or group or individual health insurance coverage furnished by a health care provider to an individual enrolled under such plan or coverage, the following:

“(A) If such provider is a participating provider with respect to such item or service, the in-network rate (as defined in subsection (c)) for such item or service.

“(B) If such provider is not a participating provider with respect to such item or service, the maximum allowed amount or other dollar amount that such plan or coverage will recognize as payment for such item or service, along with a notice that such individual may be liable for additional charges.

“(C) The estimated amount of cost sharing (including deductibles, copayments, and coinsurance) that the individual will incur for such item or service (which, in the case such item or service is to be furnished by a provider described in subparagraph (B), shall be calculated using the maximum allowed amount or other dollar amount described in such subparagraph).

“(D) The amount the individual has already accumulated with respect to any deductible or out of pocket maximum under the plan or coverage (broken down, in the case separate deductibles or maximums apply to separate individuals enrolled in the plan or coverage, by such separate deductibles or maximums, in addition to any cumulative deductible or maximum).

“(E) In the case such plan imposes any frequency or volume limitations with respect to such item or service (excluding medical necessity determinations), the amount that such individual has accrued towards such limitation with respect to such item or service.

“(F) Any prior authorization, concurrent review, step therapy, fail first, or similar requirements applicable to coverage of such item or service under such plan or coverage.

“(G) Any shared savings (such as any credit, payment, or other benefit provided by such plan or issuer) available to the individual with respect to such item or service furnished by such provider known at the time such request is made.

“(3) Self-service tool—For purposes of paragraph (1), a self-service tool established by a group health plan or health insurance issuer offering group or individual health insurance coverage meets the requirements of this paragraph if such tool—

“(A) is based on an internet website (or successor technology specified by the Secretary);

“(B) provides for real-time responses to requests described in paragraph (1);

“(C) is updated in a manner such that information provided through such tool is timely and accurate at the time such request is made;

“(D) allows such a request to be made with respect to an item or service furnished by—

changed “(i) a specific provider that is a participating provider with respect to such item or service;service; or

changed “(ii) all providers that are participating providers with respect to such item or service; orservice;

removed “(iii) a provider in a relevant geographic region that is not described in clause (i) or (ii);

“(E) provides that such a request may be made with respect to an item or service through use of the billing code for such item or service or through use of a descriptive term for such item or service; and

“(F) meets any other requirement determined appropriate by the Secretary to ensure the accessibility and usability of information provided through such tool.

“(b) Rate and payment information

“(1) In general—For plan years beginning on or after January 1, 2026, each group health plan and health insurance issuer offering group or individual health insurance coverage (other than a grandfathered health plan (as defined in section 1251(e) of the Patient Protection and Affordable Care Act)) shall, for each month, not later than the tenth day of such month, make available to the public the rate and payment information described in paragraph (2) in accordance with paragraph (3).

“(2) Rate and payment information described—For purposes of paragraph (1), the rate and payment information described in this paragraph is, with respect to a group health plan or group or individual health insurance coverage, the following:

“(A) With respect to each item or service (other than a drug) for which benefits are available under such plan or coverage, the in-network rate (expressed as a dollar amount) in effect as of the date on which such information is made public with each provider that is a participating provider with respect to such item or service.

“(B) With respect to each drug (identified by national drug code) for which benefits are available under such plan or coverage—

“(i) the in-network rate (expressed as a dollar amount) in effect as of the first day of the month in which such information is made public with each provider that is a participating provider with respect to such drug; and

“(ii) the average amount paid by such plan (net of rebates, discounts, and price concessions) for such drug dispensed or administered during the 90-day period beginning 180 days before such date of publication to each provider that was a participating provider with respect to such drug, broken down by each such provider, other than such an amount paid to a provider that, during such period, submitted fewer than 20 claims for such drug to such plan or coverage.

“(C) With respect to each item or service for which benefits are available under such plan or coverage, the amount billed, and the amount allowed by the plan, for each such item or service furnished during the 90-day period specified in subparagraph (B) by a provider that was not a participating provider with respect to such item or service, broken down by each such provider.

“(3) Manner of publication—Rate and payment information required to be made available under this subsection shall be so made available in dollar amounts through separate machine-readable files (and any successor technology, such as application program interface technology, determined appropriate by the Secretary) corresponding to the information described in each of subparagraphs (A) through (C) of paragraph (2) that meet such requirements as specified by the Secretary through subregulatory guidance. Such requirements shall ensure that such files are limited to an appropriate size, do not include disclosure of unnecessary duplicative information contained in other files made available under this subsection, are made available in a widely-available format through a publicly-available website that allows for information contained in such files to be compared across group health plans and group or individual health insurance coverage, and are accessible to individuals at no cost and without the need to establish a user account or provide other credentials.

“(4) User instructions—Each group health plan and health insurance issuer offering group or individual health insurance coverage shall make available to the public instructions written in plain language explaining how individuals may search for information described in paragraph (2) in files submitted in accordance with paragraph (3). The Secretary shall develop and publish through subregulatory guidance a template that such a plan may use in developing instructions for purposes of the preceding sentence.

“(5) Summary—For each plan year beginning on or after January 1, 2026, each group health plan and health insurance issuer offering group or individual health insurance coverage shall make public a data file, in a manner that ensures that such file may be easily downloaded and read by standard spreadsheet software and that meets such requirements as established by the Secretary, containing a summary of all rate and payment information made public by such plan or issuer with respect to such plan or coverage during such plan year. Such file shall include the following:

“(A) The mean, median, and interquartile range of the in-network rate, and the amount allowed for an item or service when not furnished by a participating provider, in effect as of the first day of such plan year for each item or service (identified by payer identifier approved or used by the Centers for Medicare & Medicaid Services) for which benefits are available under the plan or coverage, broken down by the type of provider furnishing the item or service and by the geographic area in which such item or service is furnished.

“(B) Trends in payment rates for such items and services over such plan year, including an identification of instances in which such rates have increased, decreased, or remained the same.

“(C) The name of such plan, a description of the type of network of participating providers used by such plan or coverage, and, in the case of a group health plan, a description of whether such plan is self-insured or fully-insured.

“(D) For each item or service which is paid as part of a bundled rate—

“(i) a description of the formulae, pricing methodologies, or other information used to calculate the payment rate for such bundle; and

“(ii) a list of the items and services included in such bundle.

“(E) The percentage of items and services that are paid for on a fee-for-service basis and the percentage of items and services that are paid for as part of a bundled rate, capitated payment rate, or other alternative payment model.

“(6) Attestation—Each group health plan and health insurance issuer offering group or individual health insurance coverage shall post, along with rate and payment information made public by such plan or issuer, an attestation that such information is complete and accurate.

“(c) Accessibility—A group health plan and a health insurance issuer offering group or individual health insurance coverage shall take reasonable steps (as specified by the Secretary) to ensure that information provided in response to a request described in subsection (a), and rate and payment information made public under subsection (b), is provided in plain, easily understandable language and that interpretation, translations, and assistive services are provided to those with limited English proficiency and those with disabilities.

“(d) Definitions—In this section:

“(1) Participating provider—The term participating provider means, with respect to an item or service and a group health plan or health insurance issuer offering group or individual health insurance coverage, a physician or other health care provider who is acting within the scope of practice of that provider’s license or certification under applicable State law and who has a contractual relationship with the plan or issuer, respectively, for furnishing such item or service under the plan or coverage, and includes facilities, respectively.

“(2) Provider—The term provider includes a health care facility.

“(3) In-network rate—The term in-network rate means, with respect to a group health plan or group or individual health insurance coverage and an item or service furnished by a provider that is a participating provider with respect to such plan or coverage and item or service, the contracted rate (reflected as a dollar amount) in effect between such plan or coverage and such provider for such item or service, regardless of whether such rate is calculated based on a set amount, a fee schedule, or an amount derived from another amount, or a formula, or other method.”

(3)
ERISA—
(A)
In general— Section 719 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185h) is amended to read as follows:

“719. Transparency in coverage

“(a) Cost-Sharing transparency

“(1) In general—For plan years beginning on or after January 1, 2026, a group health plan and a health insurance issuer offering group health insurance coverage shall permit a participant or beneficiary to learn the amount of cost-sharing (including deductibles, copayments, and coinsurance) under the participant or beneficiary’s plan or coverage that the participant or beneficiary would be responsible for paying with respect to the furnishing of a specific item or service by a provider in a timely manner upon the request of the participant or beneficiary. At a minimum, such information shall include the information specified in paragraph (2) and shall be made available to such participant or beneficiary through a self-service tool that meets the requirements of paragraph (3) or, at the option of such participant or beneficiary, through a paper disclosure or phone or other electronic disclosure (as selected by such participant or beneficiary and provided at no cost to such participant or beneficiary) that meets such requirements as the Secretary may specify.

“(2) Specified information—For purposes of paragraph (1), the information specified in this paragraph is, with respect to an item or service for which benefits are available under a group health plan or group health insurance coverage furnished by a health care provider to a participant or beneficiary of such plan or coverage, the following:

“(A) If such provider is a participating provider with respect to such item or service, the in-network rate (as defined in subsection (c)) for such item or service.

“(B) If such provider is not a participating provider with respect to such item or service, the maximum allowed amount or other dollar amount that such plan or coverage will recognize as payment for such item or service, along with a notice that such participant or beneficiary may be liable for additional charges.

“(C) The estimated amount of cost-sharing (including deductibles, copayments, and coinsurance) that the participant or beneficiary will incur for such item or service (which, in the case such item or service is to be furnished by a provider described in subparagraph (B), shall be calculated using the maximum allowed amount or other dollar amount described in such subparagraph).

“(D) The amount the participant or beneficiary has already accumulated with respect to any deductible or out of pocket maximum under the plan or coverage (broken down, in the case separate deductibles or maximums apply to separate participants and beneficiaries enrolled in the plan or coverage, by such separate deductibles or maximums, in addition to any cumulative deductible or maximum).

“(E) In the case such plan imposes any frequency or volume limitations with respect to such item or service (excluding medical necessity determinations), the amount that such participant or beneficiary has accrued towards such limitation with respect to such item or service.

“(F) Any prior authorization, concurrent review, step therapy, fail first, or similar requirements applicable to coverage of such item or service under such plan or coverage.

“(G) Any shared savings (such as any credit, payment, or other benefit provided by such plan or issuer) available to the participant or beneficiary with respect to such item or service furnished by such provider known at the time such request is made.

“(3) Self-service tool—For purposes of paragraph (1), a self-service tool established by a group health plan or health insurance issuer offering group health insurance coverage meets the requirements of this paragraph if such tool—

“(A) is based on an internet website (or successor technology specified by the Secretary);

“(B) provides for real-time responses to requests described in paragraph (1);

“(C) is updated in a manner such that information provided through such tool is timely and accurate at the time such request is made;

“(D) allows such a request to be made with respect to an item or service furnished by—

changed “(i) a specific provider that is a participating provider with respect to such item or service;service; or

changed “(ii) all providers that are participating providers with respect to such item or service; orservice;

removed “(iii) a provider in a relevant geographic region that is not described in clause (i) or (ii);

“(E) provides that such a request may be made with respect to an item or service through use of the billing code for such item or service or through use of a descriptive term for such item or service; and

“(F) meets any other requirement determined appropriate by the Secretary to ensure the accessibility and usability of information provided through such tool.

“(b) Rate and payment information

“(1) In general—For plan years beginning on or after January 1, 2026, each group health plan and health insurance issuer offering group health insurance coverage (other than a grandfathered health plan (as defined in section 1251(e) of the Patient Protection and Affordable Care Act)) shall, for each month, not later than the tenth day of such month, make available to the public the rate and payment information described in paragraph (2) in accordance with paragraph (3).

“(2) Rate and payment information described—For purposes of paragraph (1), the rate and payment information described in this paragraph is, with respect to a group health plan or group health insurance coverage, the following:

“(A) With respect to each item or service (other than a drug) for which benefits are available under such plan or coverage, the in-network rate (expressed as a dollar amount) in effect as of the date on which such information is made public with each provider that is a participating provider with respect to such item or service.

“(B) With respect to each drug (identified by national drug code) for which benefits are available under such plan or coverage—

“(i) the in-network rate (expressed as a dollar amount) in effect as of the first day of the month in which such information is made public with each provider that is a participating provider with respect to such drug; and

“(ii) the average amount paid by such plan (net of rebates, discounts, and price concessions) for such drug dispensed or administered during the 90-day period beginning 180 days before such date of publication to each provider that was a participating provider with respect to such drug, broken down by each such provider, other than such an amount paid to a provider that, during such period, submitted fewer than 20 claims for such drug to such plan or coverage.

“(C) With respect to each item or service for which benefits are available under such plan or coverage, the amount billed, and the amount allowed by the plan, for each such item or service furnished during the 90-day period specified in subparagraph (B) by a provider that was not a participating provider with respect to such item or service, broken down by each such provider.

“(3) Manner of publication—Rate and payment information required to be made available under this subsection shall be so made available in dollar amounts through separate machine-readable files (and any successor technology, such as application program interface technology, determined appropriate by the Secretary) corresponding to the information described in each of subparagraphs (A) through (C) of paragraph (2) that meet such requirements as specified by the Secretary through subregulatory guidance. Such requirements shall ensure that such files are limited to an appropriate size, do not include disclosure of unnecessary duplicative information contained in other files made available under this subsection, are made available in a widely available format through a publicly available website that allows for information contained in such files to be compared across group health plans and group or individual health insurance coverage, and are accessible to individuals at no cost and without the need to establish a user account or provide other credentials.

“(4) User instructions—Each group health plan and health insurance issuer offering group health insurance coverage shall make available to the public instructions written in plain language explaining how individuals may search for information described in paragraph (2) in files submitted in accordance with paragraph (3). The Secretary shall develop and publish through subregulatory guidance a template that such a plan may use in developing instructions for purposes of the preceding sentence.

“(5) Summary—For each plan year beginning on or after January 1, 2026, each group health plan and health insurance issuer offering group health insurance coverage shall make public a data file, in a manner that ensures that such file may be easily downloaded and read by standard spreadsheet software and that meets such requirements as established by the Secretary, containing a summary of all rate and payment information made public by such plan or issuer with respect to such plan or coverage during such plan year. Such file shall include the following:

“(A) The mean, median, and interquartile range of the in-network rate, and the amount allowed for an item or service when not furnished by a participating provider, in effect as of the first day of such plan year for each item or service (identified by payer identifier approved or used by the Centers for Medicare & Medicaid Services) for which benefits are available under the plan or coverage, broken down by the type of provider furnishing the item or service and by the geographic area in which such item or service is furnished.

“(B) Trends in payment rates for such items and services over such plan year, including an identification of instances in which such rates have increased, decreased, or remained the same.

“(C) The name of such plan, a description of the type of network of participating providers used by such plan or coverage, and, in the case of a group health plan, a description of whether such plan is self-insured or fully-insured.

“(D) For each item or service which is paid as part of a bundled rate—

“(i) a description of the formulae, pricing methodologies, or other information used to calculate the payment rate for such bundle; and

“(ii) a list of the items and services included in such bundle.

“(E) The percentage of items and services that are paid for on a fee-for-service basis and the percentage of items and services that are paid for as part of a bundled rate, capitated payment rate, or other alternative payment model.

“(6) Attestation—Each group health plan and health insurance issuer offering group health insurance coverage shall post, along with rate and payment information made public by such plan or issuer, an attestation that such information is complete and accurate.

“(c) Accessibility—A group health plan and a health insurance issuer offering group health insurance coverage shall take reasonable steps (as specified by the Secretary) to ensure that information provided in response to a request described in subsection (a), and rate and payment information made public under subsection (b), is provided in plain, easily understandable language and that interpretation, translations, and assistive services are provided to those with limited English proficiency and those with disabilities.

“(d) Definitions—In this section:

“(1) Participating provider—The term participating provider means, with respect to an item or service and a group health plan or health insurance issuer offering group or individual health insurance coverage, a physician or other health care provider who is acting within the scope of practice of that provider’s license or certification under applicable State law and who has a contractual relationship with the plan or issuer, respectively, for furnishing such item or service under the plan or coverage, and includes facilities, respectively.

“(2) Provider—The term provider includes a health care facility.

“(3) In-network rate—The term in-network rate means, with respect to a group health plan or group health insurance coverage and an item or service furnished by a provider that is a participating provider with respect to such plan or coverage and item or service, the contracted rate (reflected as a dollar amount) in effect between such plan or coverage and such provider for such item or service, regardless of whether such rate is calculated based on a set amount, a fee schedule, or an amount derived from another amount, or a formula, or other method.”

(B)
Clerical amendment— The table of contents in section 1 of the Employee Retirement Income Security Act of 1974 is amended by striking the item relating to section 719 and inserting the following new item:
(b)
changed Application programming interface report— Not later than January 1, 2025, and annually thereafter, the Secretary of Health and Human Services shall, in consultation with the Office of the National Coordinator for Health Information Technology, Department of Labor, the Department of the Treasury, and stakeholders, submit to the House Committees on Education and the Workforce, Energy and Commerce, and Ways and Means, and the Senate Committees on Finance and Health, Education, Labor, and Pensions a report on the use of standards-based application programming interfaces (in this subsection referred to as “APIs”) to facilitate access to health care price transparency information and the interoperability of other medical information. Such report shall include an evaluation of the capacity of the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury to regulate and implement standards related to APIs and recommendations for improving such capacity. Such report shall include the following:
(1)
A description of current use, and proposed use, of APIs under Federal rules to facilitate interoperability, including information related to capacity constraints within the agencies, barriers to adoption, privacy and security, administrative burdens and efficiencies, care coordination, and levels of compliance.
(2)
A description of the feasibility of agency participation in the development of APIs to enable application access to price transparency data under the amendments made by subsection (a).
(3)
A specification of the timeline for which such data standards can be required to make such data accessible via an API.
(4)
An analysis of the benefits and challenges of implementing standards-based APIs for price transparency data, including the ability for consumers to access rate and payment information and the amount of cost-sharing (including deductibles, copayments, and coinsurance) under the consumer’s plan through third-party internet-based tools and applications.
(5)
An analysis of the impact that APIs which provide real-time access to pricing and cost-sharing information may have in increasing the amount of services shoppable for individuals, such as by standardizing more health care spend via episode bundles.
(6)
An analysis of which health care items and services may be useful under API, such as those for which prices change with the greatest frequency.
(7)
An analysis of the cost of API standards implementation on issuers, employers, and other private-sector entities.
(8)
An analysis of the ability of State regulators to enforce API standards and the costs to the Federal Government and States to regulate and enforce API standards.
(9)
An analysis of the interaction with API standards and Federal health information privacy standards.
(c)
Provider tool report—
(1)
In general— Not later than 1 year after the date of the enactment of this Act, The Secretary of Health and Human Services, acting through the Administrator of the Centers for Medicare & Medicaid Services, shall, in consultation with stakeholders, conduct a study and submit to the House Committees on Education and the Workforce, Energy and Commerce, and Ways and Means, and the Senate Committees on Finance and Health, Education, Labor, and Pensions a report on the usefulness and feasibility of the establishment of a provider tool by a group health plan, or a health insurance issuer offering group and individual health insurance coverage, in facilitating the provision of information made available pursuant to the amendments made by subsection (a). Such report shall include the following:
(A)
A description of the feasibility of establishing a requirement for the various types of plans and coverage to offer such a provider tool, including any challenges to establishing a provider tool using the same technology platform as the self-service tool described in such amendments.
(B)
An evaluation on the usefulness of a provider tool to aid patient-decision making and how such tool would coordinate with other information available to a patient and their provider under other Federal requirements in place or under consideration.
(C)
An evaluation of whether the information provided by such tool would be duplicative of the advanced explanation of benefits required under Federal law or any other existing requirement.
(D)
A description of the usability and expected utilization of such tool among providers, including among different provider types.
(E)
An analysis of the impact of a provider tool in value-based care arrangements.
(F)
An analysis on the potential impact of the provider tool on—
(i)
patients’ out-of-pocket spending;
(ii)
plan design, including impacts on cost-sharing requirements;
(iii)
care coordination and quality;
(iv)
plan premiums;
(v)
overall health care spending and utilization; and
(vi)
health care access in rural areas.
(G)
An analysis of the feasibility of a provider tool to include additional functionality to facilitate and improve the administration of the requirements on providers to submit notifications to such plan or coverage under section 2799B–6 of the Public Health Service Act and the requirements on such plan or coverage to provide an advanced explanation of benefits to individuals under section 2799A–1(f) of such Act.
(H)
An analysis of which health care items and services, would be most useful for patients utilizing a provider tool.
(I)
An analysis of rulemaking required to ensure such a tool complies with federal health information privacy standards.
(J)
An analysis of the burden and cost of the creation of a provider tool by plans and coverage on providers, issuers, employers, and other private-sector entities.
(K)
An analysis of the ability of state regulators to enforce provider tool standards and the costs to the Department and states to regulate and enforce provider tool standards.
(2)
Definition— The term provider tool means a tool designed to facilitate the provision of information made available pursuant to the amendments made by subsection (a) and established by a group health plan or a health insurance issuer offering group and individual health insurance coverage that allows providers to access the information such plan or coverage must provide through the self-service tool described in such amendments to an individual with whom the provider is actively treating at the time of such request, upon the request of the provider, and with the consent of such individual.
(d)
Reports—
(1)
Compliance— Not later than January 1, 2027, the Comptroller General of the United States shall submit to Congress a report containing—
(A)
an analysis of compliance with the amendments made by this section;
(B)
an analysis of enforcement of such amendments by the Secretaries of Health and Human Services, Labor, and the Treasury;
(C)
recommendations relating to improving such enforcement; and
(D)
recommendations relating to improving public disclosure, and public awareness, of information required to be made available by group health plans and health insurance issuers pursuant to such amendments.
(2)
Prices— Not later than January 1, 2028, and biennially thereafter, the Secretaries of Health and Human Services, Labor, and the Treasury shall jointly submit to Congress a report containing an assessment of differences in negotiated prices (and any trends in such prices) in the private market between—
(A)
rural and urban areas;
(B)
the individual, small group, and large group markets;
(C)
consolidated and nonconsolidated health care provider areas (as specified by the Secretary of Health and Human Services);
(D)
nonprofit and for-profit hospitals;
(E)
nonprofit and for-profit insurers; and
(F)
insurers serving local or regional areas and insurers serving multistate or national areas.
(e)
Quality report— Not later than 1 year after the date of enactment of this subsection, the Secretaries of Health and Human Services, Labor, and the Treasury shall jointly submit to Congress a report on the feasibility of including data relating to the quality of health care items and services with the price transparency information required to be made available under the amendments made by subsection (a). Such report shall include recommendations for legislative and regulatory actions to identify appropriate metrics for assessing and comparing quality of care.
(f)
Continued applicability of rules for previous years— Nothing in the amendments made by subsection (a) may be construed as affecting the applicability of the rule entitled “Transparency in Coverage” published by the Department of the Treasury, the Department of Labor, and the Department of Health and Human Services on November 12, 2020 (85 Fed. Reg. 72158), for any plan year beginning before January 1, 2026.

Sec. 106 Pharmacy benefits price transparency

(a)
PHSA— Title XXVII of the Public Health Service Act (42 U.S.C. 300gg et seq.) is amended—
(1)
in part D (42 U.S.C. 300gg–111 et seq.), by adding at the end the following new section:

“2799A–11. Oversight of pharmacy benefits manager services

changed “(a) In general—For plan years beginning on or after the date that is 2 years after the date of enactment of this section, a group health plan or a health insurance issuer offering group health insurance coverage, or an entity or subsidiary providing pharmacy benefits management services on behalf of such a plan or issuer, shall not enter into a contract with a drug manufacturer, distributor, wholesaler, subcontractor, rebate aggregator, or any other third party that limits (or delays beyond the applicable reporting period described in subsection (b)(1)) the disclosure of information to plan sponsors group health plans in such a manner that prevents such plan, issuer, or entity from making the reports described in subsection (b).

“(b) Reports

changed “(1) In general—With respect to plan years beginning on or after the date that is 2 years after the date of enactment of this section, not less frequently than every 6 months (or at the request of a plan sponsor, group health plan, not less frequently than quarterly, but under the same conditions, terms, and cost of the semiannual report under this subsection), a group health plan or health insurance issuer offering group health insurance coverage, or an entity providing pharmacy benefits management services on behalf of such a plan or issuer, shall submit to the plan sponsor (as defined in section 3(16)(B) of the Employee Retirement Income Security Act of 1974) of such group health plan or coverage a report in accordance with this section. Each such report shall be made available to such group health plan sponsor in a machine-readable format and shall include the information described in paragraph (2).

“(2) Information described—For purposes of paragraph (1), the information described in this paragraph is, with respect to drugs covered by a group health plan or health insurance issuer offering group health insurance coverage during each reporting period—

changed “(A) a list in the case of drugs for which such a claim was filed and, with respect to each plan offered by a specified large employer (or such drug on coverage offered in connection with such list—a plan offered by a specified large employer)—

changed “(i) the brand name, chemical entity, and National Drug Code;a list of drugs for which a claim was filed and, with respect to each such drug on such list—

changed “(ii) “(I) the type of dispensing channel used to furnish such drug, including retail, mail order, or specialty pharmacy;brand name, chemical entity, and National Drug Code;

changed “(iii) with respect to each drug dispensed under each “(II) the type of dispensing channel (including used to furnish such drug, including retail, mail order, or specialty pharmacy)—pharmacy;

changed “(I) whether such drug is a brand name “(III) with respect to each drug dispensed under each type of dispensing channel (including retail, mail order, or a generic drug, and—specialty pharmacy)—

changed “(aa) in the case of whether such drug is a brand name drug, the wholesale acquisition cost, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; andor a generic drug, and—

changed “(bb) “(AA) in the case of a generic brand name drug, the average wholesale price, acquisition cost, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and

changed “(II) “(BB) in the total number of—case of a generic drug, the average wholesale price, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and

changed “(aa) prescription claims (including original prescriptions and refills);“(bb) the total number of—

changed “(bb) participants, beneficiaries, “(AA) prescription claims (including original prescriptions and enrollees for whom a claim for such drug was filed;refills);

changed “(cc) dosage units per fill of “(BB) participants, beneficiaries, and enrollees for whom a claim for such drug; anddrug was filed;

changed “(dd) days supply “(CC) dosage units per fill of such drug per fill;drug; and

changed “(iv) the net price per course “(DD) days supply of treatment or single fill, such as a 30-day supply or 90-day supply to the plan or coverage after manufacturer rebates, fees, and other remuneration or adjustments;drug per fill;

changed “(v) “(IV) the total amount net price per course of out-of-pocket spending by participants, beneficiaries, and enrollees on treatment or single fill, such drug, including spending through copayments, coinsurance, as a 30-day supply or 90-day supply to the plan or coverage after manufacturer rebates, fees, and deductibles;other remuneration or adjustments;

changed “(vi) “(V) the total net amount of out-of-pocket spending by the plan or coverage;participants, beneficiaries, and enrollees on such drug, including spending through copayments, coinsurance, and deductibles;

changed “(vii) “(VI) the total amount received, or expected to be received, net spending by the plan or coverage from any entity in drug manufacturer rebates, fees, alternative discounts, and all other remuneration received from an entity or any third party (including group purchasing organizations) other than during the plan sponsor;reporting period;

changed “(viii) “(VII) the total amount received, or expected to be received received, by the plan or issuer, coverage from drug manufacturers any entity in drug manufacturer rebates, fees, alternative discounts, and all other remuneration received from an entity or any third party (including group purchasing organizations) other remuneration—than the plan sponsor;

changed “(I) that has been paid, “(VIII) the total amount received, or is expected to be paid, received by the plan or issuer, from drug manufacturers for claims incurred during the reporting period; andin rebates, fees, alternative discounts, or other remuneration—

changed “(II) “(aa) that has been paid, or is related to utilization rebates be paid, by drug manufacturers for such drug; claims incurred during the reporting period; and

changed “(ix) to the extent feasible, information on the total amount of remuneration, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copay assistance on behalf of such drug manufacturer) “(bb) that is related to the participants, beneficiaries, and enrollees enrolled in utilization rebates for such plan or coverage;drug; and

changed “(B) for each category or class of drugs for which a claim was filed, a breakdown of “(IX) to the total gross spending extent feasible, information on drugs in such category or class before rebates, price concessions, alternative discounts, the total amount of remuneration, including copayment assistance dollars paid, copayment cards applied, or other remuneration from discounts provided by each drug manufacturers, and manufacturer (or entity administering copay assistance on behalf of such drug manufacturer) to the net spending after participants, beneficiaries, and enrollees enrolled in such rebates, price concessions, alternative discounts, plan or other remuneration from drug manufacturers, including—coverage for such drug;

changed “(i) the number “(ii) for each category or class of participants, beneficiaries, and enrollees who filled a prescription drugs for which a drug claim was filed, a breakdown of the total gross spending on drugs in such category or class, including class before rebates, price concessions, alternative discounts, or other remuneration from drug manufacturers, and the National Drug Code for each net spending after such drug;rebates, price concessions, alternative discounts, or other remuneration from drug manufacturers, including—

changed “(ii) if applicable, a description of “(I) the formulary tiers number of participants, beneficiaries, and utilization mechanisms (such as prior authorization or step therapy) employed enrollees who filled a prescription for drugs a drug in that such category or class; andclass, including the National Drug Code for each such drug;

changed “(iii) the total out-of-pocket spending under “(II) if applicable, a description of the plan or coverage by participants, beneficiaries, and enrollees, including spending through copayments, coinsurance, formulary tiers and deductibles;utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that category or class; and

changed “(C) in “(III) the case of a drug for which gross total out-of-pocket spending by such plan, coverage, or entity exceeded $10,000 during under the reporting period—plan or coverage by participants, beneficiaries, and enrollees, including spending through copayments, coinsurance, and deductibles;

changed “(i) a list of all other drugs “(iii) in the same therapeutic category case of a drug for which gross spending by such plan, coverage, or class; andentity exceeded $10,000 during the reporting period—

changed “(ii) the rationale for the formulary placement “(I) a list of such drug all other drugs in that the same therapeutic category or class, if applicable;class; and

changed “(D) amounts paid directly or indirectly in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA) of “(II) the Employee Retirement Income Security Act) to brokers, consultants, advisors, or any other individual or firm, rationale for the referral of the group health plan's or health insurance issuer's business to an entity providing pharmacy benefits management services, including the identity of the recipient formulary placement of such amounts;drug in that therapeutic category or class, if applicable; and

changed “(E) an explanation of any benefit design parameters that encourage or require participants, beneficiaries, and enrollees “(iv) in the case such plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the (or an entity providing pharmacy benefit benefits management services under on behalf of such plan or coverage, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives directly coverage) has an affiliated pharmacy or indirectly funded by such entity; andpharmacy under common ownership—

changed “(F) in “(I) the case of a plan or coverage (or an entity providing pharmacy benefits management services on behalf percentage of total prescriptions dispensed by such pharmacies to individuals enrolled in such plan or coverage) that has an affiliated pharmacy or pharmacy under common ownership—coverage;

changed “(i) the percentage “(II) a list of total prescriptions all drugs dispensed by such pharmacies to individuals enrolled in such plan or coverage;coverage, and, with respect to each drug dispensed—

changed “(ii) a list of all drugs dispensed by such pharmacies “(aa) the amount charged, per dosage unit, per 30-day supply, or per 90-day supply (as applicable) to individuals the plan or issuer, and to participants, beneficiaries, and enrollees enrolled in such plan or coverage, and, with respect to each drug dispensed—coverage;

changed “(I) “(bb) the median amount charged, charged to such plan or issuer, and the interquartile range of the costs, per dosage unit, per 30-day supply, or and per 90-day supply (as applicable) to supply, including amounts paid by the plan or issuer, and to participants, beneficiaries, and enrollees enrolled enrollees, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of such plan or coverage;

changed “(II) the median amount charged to such plan or issuer, and the interquartile range of “(cc) the costs, lowest cost per dosage unit, per 30-day supply, supply and per 90-day supply, for each such drug, including amounts paid by charged to the plan and participants, beneficiaries, and enrollees, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are is available from any pharmacy included in the pharmacy network of such plan or coverage;coverage; and

changed “(III) “(dd) the lowest net acquisition cost per dosage unit, per 30-day supply supply, and per 90-day supply, for each if such drug, including amounts charged to the plan and participants, beneficiaries, and enrollees, that drug is available from any pharmacy included in the network of such plan or coverage; andsubject to a maximum price discount;

changed “(IV) “(B) in the net acquisition cost per dosage unit, per 30-day supply, and per 90-day supply, if such drug is subject to case of a maximum price discount.plan or coverage not described in subparagraph (A)—

changed “(3) Privacy requirements—Health insurance issuers offering group health insurance coverage and entities providing pharmacy benefits management services on behalf of a group health plan shall provide information under paragraph (1) in a manner consistent with “(i) the privacy, security, and breach notification regulations promulgated under section 13402(a) of total net spending by the Health Information Technology plan or coverage for Clinical Health Act, and shall restrict the use and disclosure of all drugs covered by such information according to plan or coverage during such privacy regulations.reporting period;

added “(ii) the total amount received, or expected to be received, by the plan or coverage from any entity in drug manufacturer rebates, fees, alternative discounts, and all other remuneration received from an entity or any third party (including group purchasing organizations) other than the plan sponsor for all such drugs; and

added “(iii) to the extent feasible, information on the total amount of remuneration, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copay assistance on behalf of such drug manufacturer) to the participants, beneficiaries, and enrollees enrolled in such plan or coverage for such drugs;

added “(C) amounts paid directly or indirectly in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA) of the Employee Retirement Income Security Act) to brokers, consultants, advisors, or any other individual or firm, for the referral of the group health plan's or health insurance issuer's business to an entity providing pharmacy benefits management services, including the identity of the recipient of such amounts;

added “(D) an explanation of any benefit design parameters that encourage or require participants, beneficiaries, and enrollees in such plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services under such plan or coverage, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives directly or indirectly funded by such entity; and

added “(E) total gross spending on all drugs during the reporting period.

added “(3) Privacy requirements

added “(A) In general—Health insurance issuers offering group health insurance coverage and entities providing pharmacy benefits management services on behalf of a group health plan shall provide information under paragraph (1) in a manner consistent with the privacy, security, and breach notification regulations promulgated under section 13402(a) of the Health Information Technology for Clinical Health Act and consistent with the HIPAA privacy regulations (as defined in section 1180(b)(3) of the Social Security Act) and shall restrict the use and disclosure of such information according to such privacy, security, and breach notification regulations and such HIPAA privacy regulations.

added “(B) Additional requirements

added “(i) In general—An entity providing pharmacy benefits management services on behalf of a group health plan or health insurance issuer offering group health insurance coverage that submits a report under paragraph (1) shall ensure that such report contains only summary health information, as defined in section 164.504(a) of title 45, Code of Federal Regulations (or successor regulations).

added “(ii) Restrictions—A group health plan shall comply with section 164.504(f) of title 45, Code of Federal Regulations (or a successor regulation) and a plan sponsor shall act in accordance with the terms of the agreement described in such section.

added “(C) Rule of construction—Nothing in this section shall be construed to modify the requirements for the creation, receipt, maintenance, or transmission of protected health information under the HIPAA privacy regulations (as defined in section 1180(b)(3) of the Social Security Act).

“(4) Disclosure and redisclosure

added “(A) Limitation to business associates—A group health plan receiving a report under paragraph (1) may disclose such information only to the entity from which the report was received or to that entity’s business associates as defined in section 160.103 of title 45, Code of Federal Regulations (or successor regulations) or as permitted by the HIPAA Privacy Rule (45 CFR parts 160 and 164, subparts A and E).

removed “(A) Limitation to business associates—A plan sponsor receiving a report under paragraph (1) may disclose such information only to the entity from which the report was received, the group health plan for which the report pertains, or to that entity’s business associates as defined in section 160.103 of title 45, Code of Federal Regulations (or successor regulations) or as permitted by the HIPAA Privacy Rule (45 CFR parts 160 and 164, subparts A and E).

“(B) Clarification regarding public disclosure of information—Nothing in this section shall prevent a group health plan or health insurance issuer offering group health insurance coverage, or an entity providing pharmacy benefits management services on behalf of such a plan or coverage, from placing reasonable restrictions on the public disclosure of the information contained in a report described in paragraph (1), except that such plan, issuer, or entity may not restrict disclosure of such report to the Department of Health and Human Services, the Department of Labor, the Department of the Treasury, or the Comptroller General of the United States.

added “(C) Limited form of report—The Secretary shall define through rulemaking a limited form of the report under paragraph (1) required with respect to group health plans where the plan sponsors of such plans are drug manufacturers, drug wholesalers, or other direct participants in the drug supply chain, in order to prevent anti-competitive behavior.

added “(5) Report to GAO—A group health plan or health insurance issuer offering group health insurance coverage, or an entity providing pharmacy benefits management services on behalf of such plan or coverage, shall submit to the Comptroller General of the United States each of the first 4 reports submitted to a group health plan under paragraph (1) and other such reports as requested, in accordance with the privacy requirements under paragraph (3), the disclosure and redisclosure standards under paragraph (4), the standards specified pursuant to paragraph (6), and such other information that the Comptroller General determines necessary to carry out the study under section 106(d) of the Lower Costs, More Transparency Act.

removed “(C) Limited form of report—The Secretary shall define through rulemaking a limited form of the report under paragraph (1) required of plan sponsors who are drug manufacturers, drug wholesalers, or other direct participants in the drug supply chain, in order to prevent anti-competitive behavior.

removed “(5) Report to GAO—A group health plan or health insurance issuer offering group health insurance coverage, or an entity providing pharmacy benefits management services on behalf of such plan or coverage, shall submit to the Comptroller General of the United States each of the first 4 reports submitted to a plan sponsor under paragraph (1) and other such reports as requested, in accordance with the privacy requirements under paragraph (3), the disclosure and redisclosure standards under paragraph (4), the standards specified pursuant to paragraph (6), and such other information that the Comptroller General determines necessary to carry out the study under section 106(d) of the Lower Costs, More Transparency Act.

“(6) Standard format—Not later than 1 year after the date of enactment of this section, the Secretary shall specify through rulemaking standards for group health plans, health insurance issuers offering group health insurance coverage, and entities providing pharmacy benefits management services on behalf of such plans or coverage, required to submit reports under paragraph (1) to submit such reports in a standard format.

“(c) Enforcement

“(1) In general—The Secretary shall enforce this section.

added “(2) Failure to provide information—A health insurance issuer or an entity providing pharmacy benefits management services on behalf of such plan or coverage that violates sub-section (a) or fails to provide the information required under subsection (b) shall be subject to a civil monetary penalty in the amount of $10,000 for each day during which such violation continues or such information is not disclosed or reported.

removed “(2) Failure to provide timely information—A health insurance issuer or an entity providing pharmacy benefits management services on behalf of such plan or coverage that violates sub-section (a) or fails to provide the information required under subsection (b) shall be subject to a civil monetary penalty in the amount of $10,000 for each day during which such violation continues or such information is not disclosed or reported.

“(3) False information—A health insurance issuer or an entity providing pharmacy benefits management services on behalf of such a plan or coverage that knowingly provides false information under this section shall be subject to a civil money penalty in an amount not to exceed $100,000 for each item of false information. Such civil money penalty shall be in addition to other penalties as may be prescribed by law.

“(4) Procedure—The provisions of section 1128A of the Social Security Act, other than subsections (a) and (b) and the first sentence of subsection (c)(1) of such section shall apply to civil monetary penalties under this subsection in the same manner as such provisions apply to a penalty or proceeding under such section.

“(5) Waivers—The Secretary may waive penalties under paragraph (2), or extend the period of time for compliance with a requirement of this section, for an entity in violation of this section that has made a good-faith effort to comply with the requirements in this section.

“(d) Rule of construction—Nothing in this section shall be construed to permit a group health plan, health insurance issuer, or entity providing pharmacy benefits management services on behalf of such plan or coverage, to restrict disclosure to, or otherwise limit the access of, the Department of Health and Human Services to a report described in subsection (b)(1) or information related to compliance with subsection (a) or (b) by entities subject to such subsection.

added “(e) Definitions—In this section:

added “(1) Specified large employer—The term “specified large employer” means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 50 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year.

added “(2) Wholesale acquisition cost—The term wholesale acquisition cost has the meaning given such term in section 1847A(c)(6)(B) of the Social Security Act.”

removed “(e) Definition—In this section, the term wholesale acquisition cost has the meaning given such term in section 1847A(c)(6)(B) of the Social Security Act.”

(2)
in section 2723 (42 U.S.C. 300gg–22)—
(A)
in subsection (a)—
(i)
in paragraph (1), by inserting “(other than subsections (a) and (b) of section 2799A–11)” after “part D”; and
(ii)
in paragraph (2), by inserting “(other than subsections (a) and (b) of section 2799A–11)” after “part D”; and
(B)
in subsection (b)—
(i)
in paragraph (1), by inserting “(other than subsections (a) and (b) of section 2799A–11)” after “part D”;
(ii)
in paragraph (2)(A), by inserting “(other than subsections (a) and (b) of section 2799A–11)” after “part D”; and
(iii)
in paragraph (2)(C)(ii), by inserting “(other than subsections (a) and (b) of section 2799A–11)” after “part D”.
(b)
ERISA—
(1)
In general— Subtitle B of title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1021 et seq.) is amended—
(A)
in subpart B of part 7 (29 U.S.C. 1185 et seq.), by adding at the end the following:

“726. Oversight of pharmacy benefit manager services

changed “(a) In general—For plan years beginning on or after the date that is 2 years after the date of enactment of this section, a group health plan or a health insurance issuer offering group health insurance coverage, or an entity or subsidiary providing pharmacy benefits management services on behalf of such a plan or issuer, shall not enter into a contract with a drug manufacturer, distributor, wholesaler, subcontractor, rebate aggregator, or any other third party that limits (or delays beyond the applicable reporting period described in subsection (b)(1)) the disclosure of information to plan sponsors group health plans in such a manner that prevents such plan, issuer, or entity from making the reports described in subsection (b).

“(b) Reports

changed “(1) In general—With respect to plan years beginning on or after the date that is 2 years after the date of enactment of this section, not less frequently than every 6 months (or at the request of a plan sponsor, group health plan, not less frequently than quarterly, but under the same conditions, terms, and cost of the semiannual report under this subsection), a group health plan or health insurance issuer offering group health insurance coverage, or an entity providing pharmacy benefits management services on behalf of such a plan or issuer, shall submit to the plan sponsor (as defined in section 3(16)(B)) of such group health plan or coverage a report in accordance with this section. Each such report shall be made available to such group health plan sponsor in a machine-readable format and shall include the information described in paragraph (2).

“(2) Information described—For purposes of paragraph (1), the information described in this paragraph is, with respect to drugs covered by a group health plan or health insurance issuer offering group health insurance coverage during each reporting period—

changed “(A) a list in the case of drugs for which such a claim was filed and, with respect to each plan offered by a specified large employer (or such drug on coverage offered in connection with such list—a plan offered by a specified large employer)—

changed “(i) the brand name, chemical entity, and National Drug Code;a list of drugs for which a claim was filed and, with respect to each such drug on such list—

changed “(ii) “(I) the type of dispensing channel used to furnish such drug, including retail, mail order, or specialty pharmacy;brand name, chemical entity, and National Drug Code;

changed “(iii) with respect to each drug dispensed under each “(II) the type of dispensing channel (including used to furnish such drug, including retail, mail order, or specialty pharmacy)—pharmacy;

changed “(I) whether such drug is a brand name “(III) with respect to each drug dispensed under each type of dispensing channel (including retail, mail order, or a generic drug, and—specialty pharmacy)—

changed “(aa) in the case of whether such drug is a brand name drug, the wholesale acquisition cost, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; andor a generic drug, and—

changed “(bb) “(AA) in the case of a generic brand name drug, the average wholesale price, acquisition cost, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and

changed “(II) “(BB) in the total number of—case of a generic drug, the average wholesale price, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and

changed “(aa) prescription claims (including original prescriptions and refills);“(bb) the total number of—

changed “(bb) participants, beneficiaries, “(AA) prescription claims (including original prescriptions and enrollees for whom a claim for such drug was filed;refills);

changed “(cc) dosage units per fill of “(BB) participants and beneficiaries for whom a claim for such drug; anddrug was filed;

changed “(dd) days supply “(CC) dosage units per fill of such drug per fill;drug; and

changed “(iv) the net price per course “(DD) days supply of treatment or single fill, such as a 30-day supply or 90-day supply to the plan or coverage after manufacturer rebates, fees, and other remuneration or adjustments;drug per fill;

changed “(v) “(IV) the total amount net price per course of out-of-pocket spending by participants, beneficiaries, and enrollees on treatment or single fill, such drug, including spending through copayments, coinsurance, as a 30-day supply or 90-day supply to the plan or coverage after manufacturer rebates, fees, and deductibles;other remuneration or adjustments;

changed “(vi) “(V) the total net amount of out-of-pocket spending by the plan or coverage;participants, beneficiaries, and enrollees on such drug, including spending through copayments, coinsurance, and deductibles;

changed “(vii) “(VI) the total amount received, or expected to be received, net spending by the plan or coverage from any entity in drug manufacturer rebates, fees, alternative discounts, and all other remuneration received from an entity or any third party (including group purchasing organizations) other than during the plan sponsor;reporting period;

changed “(viii) “(VII) the total amount received, or expected to be received received, by the plan or issuer, coverage from drug manufacturers any entity in drug manufacturer rebates, fees, alternative discounts, and all other remuneration received from an entity or any third party (including group purchasing organizations) other remuneration—than the plan sponsor;

changed “(I) that has been paid, “(VIII) the total amount received, or is expected to be paid, received by the plan or issuer, from drug manufacturers for claims incurred during the reporting period; andin rebates, fees, alternative discounts, or other remuneration—

changed “(II) “(aa) that has been paid, or is related to utilization rebates be paid, by drug manufacturers for such drug; claims incurred during the reporting period; and

changed “(ix) to the extent feasible, information on the total amount of remuneration, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copay assistance on behalf of such drug manufacturer) “(bb) that is related to the participants, beneficiaries, and enrollees enrolled in utilization rebates for such plan or coverage;drug; and

changed “(B) for each category or class of drugs for which a claim was filed, a breakdown of “(IX) to the total gross spending extent feasible, information on drugs in such category or class before rebates, price concessions, alternative discounts, the total amount of remuneration, including copayment assistance dollars paid, copayment cards applied, or other remuneration from discounts provided by each drug manufacturers, and manufacturer (or entity administering copay assistance on behalf of such drug manufacturer) to the net spending after participants, beneficiaries, and enrollees enrolled in such rebates, price concessions, alternative discounts, plan or other remuneration from drug manufacturers, including—coverage for such drug;

changed “(i) the number “(ii) for each category or class of participants, beneficiaries, and enrollees who filled a prescription drugs for which a drug claim was filed, a breakdown of the total gross spending on drugs in such category or class, including class before rebates, price concessions, alternative discounts, or other remuneration from drug manufacturers, and the National Drug Code for each net spending after such drug;rebates, price concessions, alternative discounts, or other remuneration from drug manufacturers, including—

changed “(ii) if applicable, a description of “(I) the formulary tiers number of participants, beneficiaries, and utilization mechanisms (such as prior authorization or step therapy) employed enrollees who filled a prescription for drugs a drug in that such category or class; andclass, including the National Drug Code for each such drug;

changed “(iii) the total out-of-pocket spending under “(II) if applicable, a description of the plan or coverage by participants, beneficiaries, and enrollees, including spending through copayments, coinsurance, formulary tiers and deductibles;utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that category or class; and

changed “(C) in “(III) the case of a drug for which gross total out-of-pocket spending by such plan, coverage, or entity exceeded $10,000 during under the reporting period—plan or coverage by participants, beneficiaries, and enrollees, including spending through copayments, coinsurance, and deductibles;

changed “(i) a list of all other drugs “(iii) in the same therapeutic category case of a drug for which gross spending by such plan, coverage, or class; andentity exceeded $10,000 during the reporting period—

changed “(ii) the rationale for the formulary placement “(I) a list of such drug all other drugs in that the same therapeutic category or class, if applicable;class; and

changed “(D) amounts paid directly or indirectly in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA)) to brokers, consultants, advisors, or any other individual or firm, for the referral of the group health plan's or health insurance issuer's business to an entity providing pharmacy benefits management services, including “(II) the identity of rationale for the recipient formulary placement of such amounts;drug in that therapeutic category or class, if applicable; and

changed “(E) an explanation of any benefit design parameters that encourage or require participants, beneficiaries, and enrollees “(iv) in the case such plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the (or an entity providing pharmacy benefit benefits management services under on behalf of such plan or coverage, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives directly coverage) has an affiliated pharmacy or indirectly funded by such entity; andpharmacy under common ownership—

changed “(F) in “(I) the case of a plan or coverage (or an entity providing pharmacy benefits management services on behalf percentage of total prescriptions dispensed by such pharmacies to individuals enrolled in such plan or coverage) that has an affiliated pharmacy or pharmacy under common ownership—coverage;

changed “(i) the percentage “(II) a list of total prescriptions all drugs dispensed by such pharmacies to individuals enrolled in such plan or coverage;coverage, and, with respect to each drug dispensed—

changed “(ii) a list of all drugs dispensed by such pharmacies “(aa) the amount charged, per dosage unit, per 30-day supply, or per 90-day supply (as applicable) to individuals the plan or issuer, and to participants, beneficiaries, and enrollees enrolled in such plan or coverage, and, with respect to each drug dispensed—coverage;

changed “(I) “(bb) the median amount charged, charged to such plan or issuer, and the interquartile range of the costs, per dosage unit, per 30-day supply, or and per 90-day supply (as applicable) to supply, including amounts paid by the plan or issuer, and to participants, beneficiaries, and enrollees enrolled enrollees, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of such plan or coverage;

changed “(II) the median amount charged to such plan or issuer, and the interquartile range of “(cc) the costs, lowest cost per dosage unit, per 30-day supply, supply and per 90-day supply, for each such drug, including amounts paid by charged to the plan and participants, beneficiaries, and enrollees, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are is available from any pharmacy included in the pharmacy network of such plan or coverage;coverage; and

changed “(III) “(dd) the lowest net acquisition cost per dosage unit, per 30-day supply supply, and per 90-day supply, for each if such drug, including amounts charged to the plan and participants, beneficiaries, and enrollees, that drug is available from any pharmacy included in the network of such plan or coverage; andsubject to a maximum price discount;

changed “(IV) “(B) in the net acquisition cost per dosage unit, per 30-day supply, and per 90-day supply, if such drug is subject to case of a maximum price discount.plan or coverage not described in subparagraph (A)—

changed “(3) Privacy requirements—Health insurance issuers offering group health insurance coverage and entities providing pharmacy benefits management services on behalf of a group health plan shall provide information under paragraph (1) in a manner consistent with “(i) the privacy, security, and breach notification regulations promulgated under section 13402(a) of total net spending by the Health Information Technology plan or coverage for Clinical Health Act, and shall restrict the use and disclosure of all drugs covered by such information according to plan or coverage during such privacy regulations.reporting period;

added “(ii) the total amount received, or expected to be received, by the plan or coverage from any entity in drug manufacturer rebates, fees, alternative discounts, and all other remuneration received from an entity or any third party (including group purchasing organizations) other than the plan sponsor for all such drugs; and

added “(iii) to the extent feasible, information on the total amount of remuneration, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copay assistance on behalf of such drug manufacturer) to the participants, beneficiaries, and enrollees enrolled in such plan or coverage for such drugs;

added “(C) amounts paid directly or indirectly in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA)) to brokers, consultants, advisors, or any other individual or firm, for the referral of the group health plan's or health insurance issuer's business to an entity providing pharmacy benefits management services, including the identity of the recipient of such amounts;

added “(D) an explanation of any benefit design parameters that encourage or require participants, beneficiaries, and enrollees in such plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services under such plan or coverage, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives directly or indirectly funded by such entity; and

added “(E) total gross spending on all drugs during the reporting period.

added “(3) Privacy requirements

added “(A) In general—Health insurance issuers offering group health insurance coverage and entities providing pharmacy benefits management services on behalf of a group health plan shall provide information under paragraph (1) in a manner consistent with the privacy, security, and breach notification regulations promulgated under section 13402(a) of the Health Information Technology for Clinical Health Act and consistent with the HIPAA privacy regulations (as defined in section 1180(b)(3) of the Social Security Act) and shall restrict the use and disclosure of such information according to such privacy, security, and breach notification regulations and such HIPAA privacy regulations.

added “(B) Additional requirements

added “(i) In general—An entity providing pharmacy benefits management services on behalf of a group health plan or health insurance issuer offering group health insurance coverage that submits a report under paragraph (1) shall ensure that such report contains only summary health information, as defined in section 164.504(a) of title 45, Code of Federal Regulations (or successor regulations).

added “(ii) Restrictions—A group health plan shall comply with section 164.504(f) of title 45, Code of Federal Regulations (or a successor regulation) and a plan sponsor shall act in accordance with the terms of the agreement described in such section.

added “(C) Rule of construction—Nothing in this section shall be construed to modify the requirements for the creation, receipt, maintenance, or transmission of protected health information under the HIPAA privacy regulations (as defined in section 1180(b)(3) of the Social Security Act).

“(4) Disclosure and redisclosure

added “(A) Limitation to business associates—A group health plan receiving a report under paragraph (1) may disclose such information only to the entity from which the report was received or to that entity’s business associates as defined in section 160.103 of title 45, Code of Federal Regulations (or successor regulations) or as permitted by the HIPAA Privacy Rule (45 CFR parts 160 and 164, subparts A and E).

removed “(A) Limitation to business associates—A plan sponsor receiving a report under paragraph (1) may disclose such information only to the entity from which the report was received, the group health plan for which the report pertains, or to that entity’s business associates as defined in section 160.103 of title 45, Code of Federal Regulations (or successor regulations) or as permitted by the HIPAA Privacy Rule (45 CFR parts 160 and 164, subparts A and E).

“(B) Clarification regarding public disclosure of information—Nothing in this section shall prevent a group health plan or health insurance issuer offering group health insurance coverage, or an entity providing pharmacy benefits management services on behalf of such a plan or coverage, from placing reasonable restrictions on the public disclosure of the information contained in a report described in paragraph (1), except that such plan, issuer, or entity may not restrict disclosure of such report to the Department of Health and Human Services, the Department of Labor, the Department of the Treasury, or the Comptroller General of the United States.

added “(C) Limited form of report—The Secretary shall define through rulemaking a limited form of the report under paragraph (1) required with respect to group health plans where the plan sponsors of such plans are drug manufacturers, drug wholesalers, or other direct participants in the drug supply chain, in order to prevent anti-competitive behavior.

added “(5) Report to GAO—A group health plan or health insurance issuer offering group health insurance coverage, or an entity providing pharmacy benefits management services on behalf of such plan or coverage, shall submit to the Comptroller General of the United States each of the first 4 reports submitted to a group health plan under paragraph (1) and other such reports as requested, in accordance with the privacy requirements under paragraph (3), the disclosure and redisclosure standards under paragraph (4), the standards specified pursuant to paragraph (6), and such other information that the Comptroller General determines necessary to carry out the study under section 106(d) of the Lower Costs, More Transparency Act.

removed “(C) Limited form of report—The Secretary shall define through rulemaking a limited form of the report under paragraph (1) required of plan sponsors who are drug manufacturers, drug wholesalers, or other direct participants in the drug supply chain, in order to prevent anti-competitive behavior.

removed “(5) Report to GAO—A group health plan or health insurance issuer offering group health insurance coverage, or an entity providing pharmacy benefits management services on behalf of such plan or coverage, shall submit to the Comptroller General of the United States each of the first 4 reports submitted to a plan sponsor under paragraph (1) and other such reports as requested, in accordance with the privacy requirements under paragraph (3), the disclosure and redisclosure standards under paragraph (4), the standards specified pursuant to paragraph (6), and such other information that the Comptroller General determines necessary to carry out the study under section 106(d) of the Lower Costs, More Transparency Act.

“(6) Standard format—Not later than 1 year after the date of enactment of this section, the Secretary shall specify through rulemaking standards for group health plans, health insurance issuers offering group health insurance coverage, and entities providing pharmacy benefits management services on behalf of such plans or coverage, required to submit reports under paragraph (1) to submit such reports in a standard format.

“(c) Rule of construction—Nothing in this section shall be construed to permit a group health plan, health insurance issuer, or entity providing pharmacy benefits management services on behalf of such plan or coverage, to restrict disclosure to, or otherwise limit the access of, the Secretary of Labor to a report described in subsection (b)(1) or information related to compliance with subsection (a) or (b) by entities subject to such subsection.

added “(d) Definitions—In this section:

added “(1) Specified large employer—The term “specified large employer” means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 50 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year.

added “(2) Wholesale acquisition cost—The term wholesale acquisition cost has the meaning given such term in section 1847A(c)(6)(B) of the Social Security Act.”

removed “(d) Definition—In this section, the term wholesale acquisition cost has the meaning given such term in section 1847A(c)(6)(B) of the Social Security Act.”

(B)
in section 502 (29 U.S.C. 1132)—
(i)
in subsection (b)(3), by striking “under subsection (c)(9))” and inserting “under paragraphs (9) and (13) of subsection (c))”; and
(ii)
in subsection (c), by adding at the end the following new paragraph:

“(13) Secretarial enforcement authority relating to oversight of pharmacy benefits manager services

changed “(A) Failure to provide timely information—The Secretary may impose a penalty against any health insurance issuer or entity providing pharmacy benefits management services that violates section 726(a) or fails to provide information required under section 726(b) in the amount of $10,000 for each day during which such violation continues or such information is not disclosed or reported.

“(B) False information—The Secretary may impose a penalty against a health insurance issuer or entity providing pharmacy benefits management services that knowingly provides false information under section 726 in an amount not to exceed $100,000 for each item of false information. Such penalty shall be in addition to other penalties as may be prescribed by law.

“(C) Waivers—The Secretary may waive penalties under subparagraph (A), or extend the period of time for compliance with a requirement of section 726, for an entity in violation of such section that has made a good-faith effort to comply with such section.”

(2)
Clerical amendment— The table of contents in section 1 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq.) is amended by inserting after the item relating to section 725 the following new item:
(c)
IRC—
(1)
In general— Subchapter B of chapter 100 of the Internal Revenue Code of 1986 is amended by adding at the end the following:

“9826. Oversight of pharmacy benefit manager services

changed “(a) In general—For plan years beginning on or after the date that is 2 years after the date of enactment of this section, a group health plan, or an entity or subsidiary providing pharmacy benefits management services on behalf of such a plan, shall not enter into a contract with a drug manufacturer, distributor, wholesaler, subcontractor, rebate aggregator, or any other third party that limits (or delays beyond the applicable reporting period described in subsection (b)(1)) the disclosure of information to plan sponsors group health plans in such a manner that prevents such plan or entity from making the reports described in subsection (b).

“(b) Reports

changed “(1) In general—With respect to plan years beginning on or after the date that is 2 years after the date of enactment of this section, not less frequently than every 6 months (or at the request of a plan sponsor, group health plan, not less frequently than quarterly, but under the same conditions, terms, and cost of the semiannual report under this subsection), a group health plan, or an entity providing pharmacy benefits management services on behalf of such a plan, shall submit to the plan sponsor (as defined in section 3(16)(B) of the Employee Retirement Income Security Act of 1974) of such group health plan a report in accordance with this section. Each such report shall be made available to such group health plan sponsor in a machine-readable format and shall include the information described in paragraph (2).

“(2) Information described—For purposes of paragraph (1), the information described in this paragraph is, with respect to drugs covered by a group health plan during each reporting period—

changed “(A) a list in the case of drugs for which a claim was filed and, with respect to each such drug on such list—a plan offered by a specified large employer—

changed “(i) the brand name, chemical entity, and National Drug Code;a list of drugs for which a claim was filed and, with respect to each such drug on such list—

changed “(ii) “(I) the type of dispensing channel used to furnish such drug, including retail, mail order, or specialty pharmacy;brand name, chemical entity, and National Drug Code;

changed “(iii) with respect to each drug dispensed under each “(II) the type of dispensing channel (including used to furnish such drug, including retail, mail order, or specialty pharmacy)—pharmacy;

changed “(I) whether such drug is a brand name “(III) with respect to each drug dispensed under each type of dispensing channel (including retail, mail order, or a generic drug, and—specialty pharmacy)—

changed “(aa) in the case of whether such drug is a brand name drug, the wholesale acquisition cost, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; andor a generic drug, and—

changed “(bb) “(AA) in the case of a generic brand name drug, the average wholesale price, acquisition cost, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and

changed “(II) “(BB) in the total number of—case of a generic drug, the average wholesale price, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and

changed “(aa) prescription claims (including original prescriptions and refills);“(bb) the total number of—

changed “(bb) participants “(AA) prescription claims (including original prescriptions and beneficiaries for whom a claim for such drug was filed;refills);

changed “(cc) dosage units per fill of “(BB) participants, beneficiaries, and enrollees for whom a claim for such drug; anddrug was filed;

changed “(dd) days supply “(CC) dosage units per fill of such drug per fill;drug; and

changed “(iv) the net price per course “(DD) days supply of treatment or single fill, such as a 30-day supply or 90-day supply to the plan after manufacturer rebates, fees, and other remuneration or adjustments;drug per fill;

changed “(v) “(IV) the total amount net price per course of out-of-pocket spending by participants and beneficiaries on treatment or single fill, such drug, including spending through copayments, coinsurance, as a 30-day supply or 90-day supply to the plan after manufacturer rebates, fees, and deductibles;other remuneration or adjustments;

changed “(vi) “(V) the total net amount of out-of-pocket spending by the plan;participants, beneficiaries, and enrollees on such drug, including spending through copayments, coinsurance, and deductibles;

changed “(vii) “(VI) the total amount received, or expected to be received, net spending by the plan from any entity in drug manufacturer rebates, fees, alternative discounts, and all other remuneration received from an entity or any third party (including group purchasing organizations) other than during the plan sponsor;reporting period;

changed “(viii) “(VII) the total amount received, or expected to be received, by the plan from drug manufacturers any entity in drug manufacturer rebates, fees, alternative discounts, and all other remuneration received from an entity or any third party (including group purchasing organizations) other remuneration—than the plan sponsor;

changed “(I) that has been paid, “(VIII) the total amount received, or is expected to be paid, received by the plan, from drug manufacturers for claims incurred during the reporting period; andin rebates, fees, alternative discounts, or other remuneration—

changed “(II) “(aa) that has been paid, or is related to utilization rebates be paid, by drug manufacturers for such drug; claims incurred during the reporting period; and

changed “(ix) to the extent feasible, information on the total amount of remuneration, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copay assistance on behalf of such drug manufacturer) “(bb) that is related to the participants and beneficiaries enrolled in utilization rebates for such plan;drug; and

changed “(B) for each category or class of drugs for which a claim was filed, a breakdown of “(IX) to the total gross spending extent feasible, information on drugs in such category or class before rebates, price concessions, alternative discounts, the total amount of remuneration, including copayment assistance dollars paid, copayment cards applied, or other remuneration from discounts provided by each drug manufacturers, and the net spending after manufacturer (or entity administering copay assistance on behalf of such rebates, price concessions, alternative discounts, or other remuneration from drug manufacturers, including—manufacturer) to the participants, beneficiaries, and enrollees enrolled in such plan for such drug;

changed “(i) the number “(ii) for each category or class of participants and beneficiaries who filled a prescription drugs for which a drug claim was filed, a breakdown of the total gross spending on drugs in such category or class, including class before rebates, price concessions, alternative discounts, or other remuneration from drug manufacturers, and the National Drug Code for each net spending after such drug;rebates, price concessions, alternative discounts, or other remuneration from drug manufacturers, including—

changed “(ii) if applicable, a description of “(I) the formulary tiers number of participants, beneficiaries, and utilization mechanisms (such as prior authorization or step therapy) employed enrollees who filled a prescription for drugs a drug in that such category or class; andclass, including the National Drug Code for each such drug;

changed “(iii) the total out-of-pocket spending under “(II) if applicable, a description of the plan by participants and beneficiaries, including spending through copayments, coinsurance, formulary tiers and deductibles;utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that category or class;

changed “(C) in “(III) the case of a drug for which gross total out-of-pocket spending by such plan or entity exceeded $10,000 during under the reporting period—plan by participants, beneficiaries, and enrollees, including spending through copayments, coinsurance, and deductibles; and

changed “(i) a list of all other drugs “(iii) in the same therapeutic category case of a drug for which gross spending by such plan or class; andentity exceeded $10,000 during the reporting period—

changed “(ii) the rationale for the formulary placement “(I) a list of such drug all other drugs in that the same therapeutic category or class, if applicable;class; and

changed “(D) amounts paid directly or indirectly in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA) of “(II) the Employee Retirement Income Security Act) to brokers, consultants, advisors, or any other individual or firm, rationale for the referral of the group health plan's business to an entity providing pharmacy benefits management services, including the identity of the recipient formulary placement of such amounts;drug in that therapeutic category or class, if applicable; and

changed “(E) an explanation of any benefit design parameters that encourage or require participants, beneficiaries, and enrollees “(iv) in the case such plan to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the (or an entity providing pharmacy benefit benefits management services under on behalf of such plan, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives directly plan) that has an affiliated pharmacy or indirectly funded by such entity; andpharmacy under common ownership—

changed “(F) in “(I) the case of a plan (or an entity providing pharmacy benefits management services on behalf percentage of total prescriptions dispensed by such plan) that has an affiliated pharmacy or pharmacy under common ownership—pharmacies to individuals enrolled in such plan;

changed “(i) the percentage “(II) a list of total prescriptions all drugs dispensed by such pharmacies to individuals enrolled in such plan;plan, and, with respect to each drug dispensed—

changed “(ii) a list of all drugs dispensed by such pharmacies “(aa) the amount charged, per dosage unit, per 30-day supply, or per 90-day supply (as applicable) to individuals the plan, and to participants, beneficiaries, and enrollees enrolled in such plan and, with respect to each drug dispensed—plan;

changed “(I) “(bb) the median amount charged, charged to such plan, and the interquartile range of the costs, per dosage unit, per 30-day supply, or and per 90-day supply (as applicable) to supply, including amounts paid by the plan participants, beneficiaries, and to participants enrollees, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and beneficiaries enrolled that are included in the pharmacy network of such plan;

changed “(II) the median amount charged to such plan, and the interquartile range of “(cc) the costs, lowest cost per dosage unit, per 30-day supply, supply and per 90-day supply, for each such drug, including amounts paid by charged to the participants plan and participants, beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and enrollees, that are is available from any pharmacy included in the pharmacy network of such plan;plan; and

changed “(III) “(dd) the lowest net acquisition cost per dosage unit, per 30-day supply supply, and per 90-day supply, for each if such drug, including amounts charged to the plan and to participants and beneficiaries, that drug is available from any pharmacy included in the network of such plan; andsubject to a maximum price discount;

changed “(IV) “(B) in the net acquisition cost per dosage unit, per 30-day supply, and per 90-day supply, if such drug is subject to case of a maximum price discount.plan not described in subparagraph (A)—

changed “(3) Privacy requirements—Health insurance issuers offering group health insurance coverage and entities providing pharmacy benefits management services on behalf of a group health plan shall provide information under paragraph (1) in a manner consistent with “(i) the privacy, security, and breach notification regulations promulgated under section 13402(a) of total net spending by the Health Information Technology plan for Clinical Health Act, and shall restrict the use and disclosure of all drugs covered by such information according to plan during such privacy regulations.reporting period;

added “(ii) the total amount received, or expected to be received, by the plan from any entity in drug manufacturer rebates, fees, alternative discounts, and all other remuneration received from an entity or any third party (including group purchasing organizations) other than the plan sponsor for all such drugs; and

added “(iii) to the extent feasible, information on the total amount of remuneration, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copay assistance on behalf of such drug manufacturer) to the participants, beneficiaries, and enrollees enrolled in such plan for such drugs;

added “(C) amounts paid directly or indirectly in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA) of the Employee Retirement Income Security Act) to brokers, consultants, advisors, or any other individual or firm, for the referral of the group health plan's business to an entity providing pharmacy benefits management services, including the identity of the recipient of such amounts;

added “(D) an explanation of any benefit design parameters that encourage or require participants, beneficiaries, and enrollees in such plan to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services under such plan, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives directly or indirectly funded by such entity; and

added “(E) total gross spending on all drugs during the reporting period.

added “(3) Privacy requirements

added “(A) In general—Entities providing pharmacy benefits management services on behalf of a group health plan shall provide information under paragraph (1) in a manner consistent with the privacy, security, and breach notification regulations promulgated under section 13402(a) of the Health Information Technology for Clinical Health Act and consistent with the HIPAA privacy regulations (as defined in section 1180(b)(3) of the Social Security Act) and shall restrict the use and disclosure of such information according to such privacy, security, and breach notification regulations and such HIPAA privacy regulations.

added “(B) Additional requirements

added “(i) In general—An entity providing pharmacy benefits management services on behalf of a group health plan that submits a report under paragraph (1) shall ensure that such report contains only summary health information, as defined in section 164.504(a) of title 45, Code of Federal Regulations (or successor regulations).

added “(ii) Restrictions—A group health plan shall comply with section 164.504(f) of title 45, Code of Federal Regulations (or a successor regulation) and a plan sponsor shall act in accordance with the terms of the agreement described in such section.

added “(C) Rule of construction—Nothing in this section shall be construed to modify the requirements for the creation, receipt, maintenance, or transmission of protected health information under the HIPAA privacy regulations (as defined in section 1180(b)(3) of the Social Security Act).

“(4) Disclosure and redisclosure

added “(A) Limitation to business associates—A group health plan receiving a report under paragraph (1) may disclose such information only to the entity from which the report was received or to that entity’s business associates as defined in section 160.103 of title 45, Code of Federal Regulations (or successor regulations) or as permitted by the HIPAA Privacy Rule (45 CFR parts 160 and 164, subparts A and E).

removed “(A) Limitation to business associates—A plan sponsor receiving a report under paragraph (1) may disclose such information only to the entity from which the report was received, the group health plan for which the report pertains, or to that entity’s business associates as defined in section 160.103 of title 45, Code of Federal Regulations (or successor regulations) or as permitted by the HIPAA Privacy Rule (45 CFR parts 160 and 164, subparts A and E).

“(B) Clarification regarding public disclosure of information—Nothing in this section shall prevent a group health plan or health insurance issuer offering group health insurance coverage, or an entity providing pharmacy benefits management services on behalf of such a plan or coverage, from placing reasonable restrictions on the public disclosure of the information contained in a report described in paragraph (1), except that such plan, issuer, or entity may not restrict disclosure of such report to the Department of Health and Human Services, the Department of Labor, the Department of the Treasury, or the Comptroller General of the United States.

added “(C) Limited form of report—The Secretary shall define through rulemaking a limited form of the report under paragraph (1) required with respect to group health plans where the plan sponsors of such plans are drug manufacturers, drug wholesalers, or other direct participants in the drug supply chain, in order to prevent anti-competitive behavior.

added “(5) Report to GAO—A group health plan, or an entity providing pharmacy benefits management services on behalf of such plan, shall submit to the Comptroller General of the United States each of the first 4 reports submitted to a group health plan under paragraph (1) and other such reports as requested, in accordance with the privacy requirements under paragraph (3), the disclosure and redisclosure standards under paragraph (4), the standards specified pursuant to paragraph (6), and such other information that the Comptroller General determines necessary to carry out the study under section 106(d) of the Lower Costs, More Transparency Act.

removed “(C) Limited form of report—The Secretary shall define through rulemaking a limited form of the report under paragraph (1) required of plan sponsors who are drug manufacturers, drug wholesalers, or other direct participants in the drug supply chain, in order to prevent anti-competitive behavior.

removed “(5) Report to GAO—A group health plan, or an entity providing pharmacy benefits management services on behalf of such plan, shall submit to the Comptroller General of the United States each of the first 4 reports submitted to a plan sponsor under paragraph (1) and other such reports as requested, in accordance with the privacy requirements under paragraph (3), the disclosure and redisclosure standards under paragraph (4), the standards specified pursuant to paragraph (6), and such other information that the Comptroller General determines necessary to carry out the study under section 106(d) of the Lower Costs, More Transparency Act.

“(6) Standard format—Not later than 1 year after the date of enactment of this section, the Secretary shall specify through rulemaking standards for group health plans, and entities providing pharmacy benefits management services on behalf of such plans, required to submit reports under paragraph (1) to submit such reports in a standard format.

“(c) Rule of construction—Nothing in this section shall be construed to permit a group health plan or entity providing pharmacy benefits management services on behalf of such plan, to restrict disclosure to, or otherwise limit the access of, the Secretary of Health and Human Services to a report described in subsection (b)(1) or information related to compliance with subsections (a) or (b) by entities subject to such subsection.

added “(d) Definitions—In this section:

added “(1) Specified large employer—The term “specified large employer” means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 50 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year.

added “(2) Wholesale acquisition cost—The term wholesale acquisition cost has the meaning given such term in section 1847A(c)(6)(B) of the Social Security Act.”

removed “(d) Definition—In this section, the term wholesale acquisition cost has the meaning given such term in section 1847A(c)(6)(B) of the Social Security Act.”

(2)
Clerical amendment— The table of sections for subchapter B of chapter 100 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:
(d)
GAO reports—
(1)
Report on pharmacy network design—
(A)
In general— Not later than 3 years after the date of enactment of this Act, the Comptroller General of the United States shall submit to Congress a report on—
(i)
pharmacy networks that have contracted with group health plans, health insurance issuers offering group health insurance coverage, or entities providing pharmacy benefits management services on behalf of such plans or issuers, including networks with pharmacies that are under common ownership (in whole or part) with such plans, issuers, or entities (including entities that provide pharmacy benefits administrative services on behalf of such plans or issuers);
(ii)
pharmacy network design parameters that encourage individuals enrolled in such plans or coverage to fill prescriptions at mail order, specialty, or retail pharmacies that are wholly or partially owned by a plan, issuer, or entity;
(iii)
whether such plans and issuers have options to elect different network pricing arrangements in the marketplace with entities that provide pharmacy benefits management services and the prevalence of electing such different network pricing arrangements;
(iv)
with respect to pharmacy networks that include pharmacies under common ownership described in clause (i)—
(I)
whether such networks are designed to encourage individuals enrolled in a group health plan or health insurance coverage to use such pharmacies over other network pharmacies for specific services or drugs, and if so, the reasons the networks give for encouraging use of such pharmacies; and
(II)
whether such pharmacies are used by enrollees disproportionately more in the aggregate or for specific services or drugs compared to other network pharmacies;
(v)
the degree to which mail order, specialty, or retail pharmacies that dispense prescription drugs to an enrollee in a plan or coverage that are under common ownership (in whole or part) with plans, issuers, or entities providing pharmacy benefits management services or pharmacy benefits administrative services on behalf of such plan or coverage receive reimbursement that is greater than the median price charged to the plan or issuer when the same drug is dispensed to enrollees in the plan or coverage by other pharmacies included in the pharmacy network of that plan, issuer, or entity that are not wholly or partially owned by the plan or issuer, or entity providing pharmacy benefits management services on behalf of such plan or issuer.
(B)
Requirement— The Comptroller General of the United States shall ensure that the report under subparagraph (A) does not contain information that would identify a specific group health plan or health insurance issuer (or an entity providing pharmacy benefits management services on behalf of such plan or issuer), or otherwise contain commercial or financial information that is privileged or confidential.
(C)
Definitions— In this paragraph, the terms group health plan, health insurance coverage, and health insurance issuer have the meanings given such terms in section 2791 of the Public Health Service Act (42 U.S.C. 300gg–91).
(2)
Report on copay assistance programs— Not later than 18 months after the date of the enactment of this Act, the Comptroller General of the United States shall submit to Congress a report on what is known about the role of copay assistance programs and the impact of such programs on commercial health insurance, stop loss, and drug prices. Such report shall include to the extent feasible—
(A)
a description of copay assistance programs, including—
(i)
the types of programs available and the methods of providing copay assistance through such programs, including cash discounts, copay cards, or drugs provided to an individual at no cost;
(ii)
how such programs are funded;
(iii)
the types of entities that own, operate, or otherwise conduct such programs, the types of information such entities collect, and the direct and indirect contractual relationships between the entities in the drug supply chain that interact with such programs, such as a drug manufacturer, pharmacy, wholesaler, switch, rebate aggregator, pharmacy benefit manager, and other entities in the drug supply chain;
(iv)
the effect of such programs on patient out-of-pocket spending, including for stop-loss insurance, and drug utilization, including drug adherence; and
(v)
patient eligibility criteria for such programs; and
(B)
an analysis of—
(i)
the sources of funding for such programs; and
(ii)
the effects of such programs on Federal health care programs and the individuals enrolled in such Federal health care programs.

Sec. 111 Implementation funding

(a)
changed In general— For the purposes described in subsection (b), there are appropriated, in addition to amounts otherwise available, out of amounts in the Treasury not otherwise appropriated, to the Secretary of Health and Human Services and the Secretary of the Treasury, $25,000,000 $65,000,000 for fiscal year 2024, to remain available through fiscal year 2029.
(b)
Permitted purposes— The purposes described in this subsection are the following purposes, insofar as such purposes are to carry out the provisions of, including the amendments made by, this title:
(1)
Preparing, drafting, and issuing proposed and final regulations or interim regulations.
(2)
Preparing, drafting, and issuing guidance and public information.
(3)
Preparing, drafting, and publishing reports.
(4)
Enforcement of such provisions.
(5)
Reporting, collection, and analysis of data.
(6)
Other administrative duties necessary for implementation of such provisions.
(c)
Transparency of implementation funds— Each Secretary described in subsection (a) shall annually submit, no later than September 1st of each year, to the Committees on Energy and Commerce, on Ways and Means, on Education and Workforce, and on Appropriations of the House of Representatives and on the Committees on Health, Education, Labor, and Pensions and on Appropriations of the Senate a report on funds expended pursuant to funds appropriated under this section.

Sec. 202 Improving transparency and preventing the use of abusive spread pricing and related practices in Medicaid

(a)
changed Pharmacy price reimbursement requirements—Spread pricing—
(1)
In general— Section 1927(e) of the Social Security Act (42 U.S.C. 1396r–8(e)) is amended by adding at the end the following:

“(6) Pharmacy price reimbursement required

changed “(A) In general—A contract between the State and a pharmacy benefit manager (in this paragraph referred to as a “PBM”), or a contract between the State and a designated entity (as defined in subparagraph (C)) that includes provisions making the designated entity responsible for the administration of medical assistance consisting of covered outpatient drugs for individuals enrolled with the designated entity, shall require that payment for such drugs and related administrative services (as applicable), including payments made by a PBM on behalf of the State or designated entity, is based on a pharmacy price reimbursement model under which—

“(i) any payment made by the designated entity or the PBM (as applicable) for such a drug—

“(I) is limited to—

“(aa) ingredient cost; and

“(bb) a professional dispensing fee that is not less than the professional dispensing fee that the State plan or waiver would pay if the plan or waiver was making the payment directly;

changed “(II) is passed through in its entirety by the designated entity or PBM to the pharmacy or provider that dispenses the drug and is not retroactively denied or reduced except as the result of an audit performed pursuant to a contract between such designated entity or PBM and such pharmacy or provider, or as otherwise permitted or required by under Federal or State law (including in response to instances of fraud, waste, or abuse); regulation; and

“(III) is made in a manner that is consistent with sections 447.502, 447.512, 447.514, and 447.518 of title 42, Code of Federal Regulations (or any successor regulation) as if such requirements applied directly to the designated entity or the PBM, except that any payment by the designated entity or the PBM for the ingredient cost of such a drug purchased by a covered entity (as defined in subsection (a)(5)(B)) may exceed the actual acquisition cost (as defined in section 447.502 of title 42, Code of Federal Regulations (or any successor regulation)) for such drug if—

“(aa) such drug was subject to an agreement under section 340B of the Public Health Service Act;

“(bb) such payment for such cost of such drug does not exceed the maximum payment that would have been made by the designated entity or the PBM for the ingredient cost of such drug had such drug not been purchased by such a covered entity; and

“(cc) such covered entity reports to the Secretary, on an annual basis (in a form and manner specified by the Secretary) and with respect to payments for such costs of such drugs so purchased by such covered entity that are in excess of the actual acquisition costs for such drugs, the aggregate amount of such excess;

“(ii) payment to the designated entity or the PBM (as applicable) for administrative services performed by the designated entity or PBM is limited to an administrative fee that reflects the fair market value of providing such services;

“(iii) the designated entity or the PBM (as applicable) makes available to the State, and the Secretary upon request, all costs and payments related to covered outpatient drugs and accompanying administrative services incurred, received, or made by the designated entity or the PBM, including ingredient costs, professional dispensing fees, administrative fees, post-sale and post-invoice fees, discounts, or related adjustments such as direct and indirect remuneration fees, and any and all other remuneration; and

“(iv) any form of spread pricing whereby any amount charged or claimed by the designated entity or the PBM (as applicable) is in excess of the amount paid to the pharmacies by the designated entity or the PBM, including any post-sale or post-invoice fees, discounts, or related adjustments such as direct and indirect remuneration fees or assessments (after allowing for a fair market administrative fee as described in clause (ii)), is not allowable for purposes of claiming Federal matching payments under this title.

“(B) Making certain information available—The Secretary shall publish, not less frequently than on an annual basis, information received by the Secretary pursuant to subparagraph (A)(i)(III)(cc). Such information shall be so published in an electronic and searchable format, such as through the 340B Office of Pharmacy Affairs Information System (or a successor system).

“(C) Definitions—In this paragraph:

“(i) Designated entity—The term designated entity means a managed care entity or other specified entity.

“(ii) Managed care entity; other specified entity—The terms managed care entity and other specified entity have the meaning given such terms in section 1903(m)(9)(D).”

(2)
changed Conforming amendments— Section 1903(m)(2)(A) 1903(m) of such Act (42 U.S.C. 1396b(m)(2)(A)) 1396b(m)) is amended—
(A)
changed in clause (i), by inserting before the semicolon at the end the following: “(or, in the case of a contract described in section 1927(e)(6), is an other specified entity (as defined in paragraph (9)(D))”; and(2)(A)(xiii)—
(B)
removed in clause (xiii)—
(i)
renumbered was (2)(3)(4)(2) by striking “and (III)” and inserting “(III)”;
(ii)
added by inserting before the period at the end the following: “, and (IV) with respect to covered outpatient drugs and related administrative services (as applicable) provided by the entity (or by a pharmacy benefit manager on behalf of the entity under a contract or other arrangement with the entity), that payment for such drugs and related administrative services is based on a pharmacy price reimbursement model described in section 1927(e)(6)(A)”; and
(iii)
added by moving the margin 2 ems to the left; and
(B)
added by adding at the end the following new paragraph:

added “(10) No payment shall be made under this title to a State with respect to expenditures incurred by it for payment for services provided by an other specified entity (as defined in paragraph (9)(D)) unless the contract between the State and the entity for the provision of such services provides, with respect to covered outpatient drugs and related administrative services (as applicable) provided by the entity (or by a pharmacy benefit manager on behalf of the entity under a contract or other arrangement with the entity), that payment for such drugs and related administrative services is based on a pharmacy price reimbursement model described in section 1927(e)(6)(A).”

(ii)
removed by inserting before the period at the end the following: “, and (IV) the pharmacy benefit provided by the entity (or pharmacy benefit manager on behalf of the entity under a contract), the other specified entity (as defined in paragraph (9)(D)) (or pharmacy benefit manager on behalf of the other specified entity under a contract), or by another arrangement between the entity or other specified entity and the pharmacy benefit manager, shall comply with the requirements of section 1927(e)(6)”; and
(iii)
removed by moving the margin 2 ems to the left.
(3)
Effective date— The amendments made by this subsection apply to contracts between States and pharmacy benefit managers and designated entities (as defined in section 1927(e)(6) of the Social Security Act, as added by paragraph (1)) that have an effective date beginning on or after the date that is 18 months after the date of enactment of this Act.
(b)
Ensuring accurate payments to pharmacies under Medicaid—
(1)
In general— Section 1927(f) of the Social Security Act (42 U.S.C. 1396r–8(f)) is amended—
(A)
by striking “and” after the semicolon at the end of paragraph (1)(A)(i) and all that precedes it through “(1)” and inserting the following:

“(1) Determining pharmacy actual acquisition costs—The Secretary shall conduct a survey of retail community pharmacy drug prices to determine the national average drug acquisition cost as follows:

“(A) Use of vendor—The Secretary may contract services for—

“(i) with respect to retail community pharmacies, the determination of retail survey prices of the national average drug acquisition cost for covered outpatient drugs based on a monthly survey of such pharmacies; and”

(B)
by adding at the end of paragraph (1) the following:

“(F) Survey reporting—A State shall require that any retail community pharmacy in the State that receives any payment, reimbursement, administrative fee, discount, or rebate related to the dispensing of covered outpatient drugs to individuals receiving benefits under this title, regardless of whether such payment, reimbursement, administrative fee, discount, or rebate is received from the State or a designated entity (as defined in subsection (e)(6)(C)) directly or from a pharmacy benefit manager that has a contract with the State or a designated entity, shall respond to surveys of retail prices conducted under this subsection.

“(G) Survey information—Information on national drug acquisition prices obtained under this paragraph shall be made publicly available in a timely manner following the collection of such information and shall include at least the following:

“(i) The monthly response rate to the survey including a list of pharmacies not in compliance with subparagraph (F).

“(ii) The sampling frame and number of pharmacies sampled monthly.

“(iii) Information on price concessions to the pharmacy, including discounts, rebates, and other price concessions, to the extent that such information may be publicly released and is available during the survey period.

“(H) Report on specialty pharmacies—Not later than 1 year after the date that this subparagraph takes effect, the Secretary shall submit to Congress a report examining specialty drug coverage and reimbursement under this title, including—

“(i) a description of how State Medicaid programs define specialty drugs and specialty pharmacies;

“(ii) the amount State Medicaid programs pay for specialty drugs;

“(iii) how States and designated entities (as defined in subsection (e)(6)(C)) determine payment for specialty drugs;

“(iv) the settings in which specialty drugs are dispensed to individuals receiving benefits under this title (such as retail community pharmacies or specialty pharmacies);

“(v) the extent to which specialty drugs (as defined by the respective States) are captured in the national average drug acquisition cost survey (or through another process);

“(vi) examples of specialty drug dispensing fees to support the services associated with dispensing such specialty drugs; and

“(vii) recommendations as to whether specialty pharmacies should be included in the survey of retail prices to ensure national average drug acquisition costs capture drugs sold at specialty pharmacies, and how such specialty pharmacies should be defined.

“(I) Enforcement—At the discretion of the Secretary, the Secretary (acting through the Inspector General and in collaboration with the Administrator of the Centers for Medicare & Medicaid Services) may enforce non-compliance with this paragraph by a pharmacy through the establishment of penalties until compliance with this paragraph has been completed.”

(C)
in paragraph (2)—
(i)
in subparagraph (A), by inserting “(including payment rates under managed care organization as defined in section 1932(a)(1)(B)(i) and PIHPs and PAHPs as defined in section 1903(m)(9)(D)(iii)(I) and (II), respectively)” after “under this title”; and
(ii)
in subparagraph (B), by inserting “, and the basis for such dispensing fees” before the semicolon at the end.
(2)
Effective date— The amendments made by this subsection shall take effect on the first day of the first quarter that begins on or after the date that is 18 months after the date of enactment of this Act.

Sec. 301 Extension for community health centers, the national health service corps, and teaching health centers that operate GME programs

(a)
Teaching health centers that operate graduate medical education programs—
(1)
Addition to capped amounts for fiscal years 2024 and 2025— Paragraph (2) of section 340H(b) of the Public Health Service Act (42 U.S.C. 256h(b)) is amended by adding at the end the following:

“(C) Addition—Notwithstanding any provision of this section, for each of fiscal years 2024 and 2025, the Secretary may use any amounts made available in any fiscal year to carry out this section (including amounts recouped under subsection (f)) to make payments described in paragraphs (1)(A) and (1)(B), in addition to the total amount of funds appropriated under subsection (g).”

(2)
Reconciliation— Section 340H(f) of the Public Health Service Act (42 U.S.C. 256h(f)) is amended—
(A)
by striking “The Secretary shall determine” and inserting the following:

“(1) Determination—The Secretary shall determine”

(B)
by adding at the end the following:

“(2) Annual report to Congress—For each fiscal year, the Secretary shall submit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate a report specifying—

“(A) the total amount of funds recouped under paragraph (1);

“(B) the rationale for the funds being recouped; and

“(C) in the case of the reports for each of fiscal years 2024 and 2025, the total amount of funds recouped under paragraph (1) that were used pursuant to subsection (b)(2)(C) to adjust total payment amounts above the total amounts appropriated under subsection (g).”

(3)
Funding— Section 340H(g) of the Public Health Service Act (42 U.S.C. 256h(g)) is amended—
(A)
by amending paragraph (1) to read as follows:

“(1) In general—To carry out this section, there are appropriated such sums as may be necessary, not to exceed—

“(A) $230,000,000, for the period of fiscal years 2011 through 2015;

“(B) $60,000,000 for each of fiscal years 2016 and 2017;

“(C) $126,500,000 for each of fiscal years 2018 through 2023;

changed “(D) $175,000,000 $16,635,616 for each of fiscal years 2024 the period beginning on October 1, 2023, and 2025;ending on November 17, 2023;

changed “(E) $225,000,000 $21,834,247 for each of fiscal years 2026 the period beginning on November 18, 2023, and 2027; andending on January 19, 2024;

changed “(F) $300,000,000 $136,530,137 for each of fiscal years 2028, 2029, the period beginning on January 20, 2024, and 2030.”ending on September 30, 2024;

added “(G) $175,000,000 for fiscal year 2025;

added “(H) $225,000,000 for each of fiscal years 2026 and 2027; and

added “(I) $300,000,000 for each of fiscal years 2028, 2029, and 2030.”

(B)
by adding at the end the following:

“(3) Availability—The amounts made available under paragraph (1) shall remain available until expended.”

(b)
Extension for community health centers— Section 10503(b)(1)(F) of the Patient Protection and Affordable Care Act (42 U.S.C. 254b–2(b)(1)(F)) is amended—
(1)
changed by striking “and” before “$4,000,000,000” and inserting a comma; “$690,410,959”; and
(2)
changed by inserting “, $3,183,561,644 for the period beginning on January 20, 2024, and ending on September 30, 2024, $4,400,000,000 for each of fiscal years 2024 and year 2025, and $1,109,000,000 for the period beginning October 1, 2025, and ending December 31, 2025” before the semicolon.semicolon at the end.
(c)
Extension for the National Health Service Corps— Section 10503(b)(2) of the Patient Protection and Affordable Care Act (42 U.S.C. 254b–2(b)(2)) is amended—
(1)
changed in subparagraph (G), (H), by striking “and” at the end;
(2)
changed in subparagraph (H), (I), by striking the period at the end and inserting “; and”; and
(3)
by adding at the end the following:

changed “(I) “(J) $255,726,028 for the period beginning on January 20, 2024, and ending on September 30, 2024, $350,000,000 for each of fiscal years 2024 and year 2025, and $88,219,178 for the period beginning October 1, 2025, and ending December 31, 2025.”

(d)
Government Accountability Office report—
(1)
In general— Not later than one year after the date of enactment of this Act, the Comptroller General of the United States shall submit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate a report assessing the effectiveness of the National Health Service Corps at attracting health care professionals to HPSAs, including by—
(A)
assessing the metrics used by the Health Resources and Services Administration in evaluating the program;
(B)
comparing the retention rates of NHSC participants in the HPSAs where they completed their period of obligated service to the retention rate of non-NHSC participants in the corresponding HPSAs;
(C)
comparing the retention rates of NHSC participants in the HPSAs where they completed their period of obligated service to the retention rates of NHSC participants in HPSAs other than those where they completed their period of obligated service;
(D)
identifying factors that influence a NHSC participant’s decision to practice in a HPSA other than the HPSA where they completed their period of obligated service;
(E)
identifying factors other than participation in the National Health Service Corps Scholarship and Loan Repayment Programs that attract health care professionals to a HPSA;
(F)
assessing the impact the National Health Service Corps has on wages for health care professionals in a HPSA; and
(G)
comparing the distribution of NHSC participants across HPSAs, including a comparison of rural versus non-rural HPSAs.
(2)
Definition— In this section:
(A)
The term HPSA means a health professional shortage area designated under section 332 of the Public Health Service Act (42 U.S.C. 254e).
(B)
The term NHSC participant means a National Health Service Corps member participating in the National Health Service Corps Scholarship or Loan Repayment Program.
(e)
Application of provisions— Amounts appropriated pursuant to the amendments made by this section shall be subject to the requirements contained in Public Law 117–328 for funds for programs authorized under sections 330 through 340 of the Public Health Service Act.
(f)
changed Conforming amendment— Paragraph (4) of section 3014(h) of title 18, United States Code, is amended by striking “and section 301(d) of division BB 2321(d) of the Consolidated Continuing Appropriations Act, 2021.” 2024 and Other Extensions Act” and inserting “section 301(d) of division BB 2321(d) of the Consolidated Continuing Appropriations Act, 2021, 2024 and Other Extensions Act, and section 301(e) of the Lower Costs, More Transparency Act.”.Act”.

Sec. 302 Extension of special diabetes programs

(a)
Extension of special diabetes programs for type i diabetes— Section 330B(b)(2) of the Public Health Service Act (42 U.S.C. 254c–2(b)(2)) is amended—
(1)
changed in subparagraph (C), (D), by striking “and” at the end;
(2)
changed in subparagraph (D), (E), by striking the period at the end and inserting a semicolon; and
(3)
by adding at the end the following:

changed “(E) $170,000,000 “(F) $124,383,562 for each of fiscal years 2024 the period beginning on January 20, 2024, and 2025, ending on September 30, 2024, to remain available until expended; andexpended;

changed “(F) $42,849,315 “(G) $170,000,000 for the period beginning October 1, 2025, and ending December 31, fiscal year 2025, to remain available until expended.”expended; and

added “(H) $42,849,315 for the period beginning October 1, 2025, and ending December 31, 2025, to remain available until expended.”

(b)
Extending funding for special diabetes programs for Indians— Section 330C(c)(2) of the Public Health Service Act (42 U.S.C. 254c–3(c)(2)) is amended—
(1)
changed in subparagraph (C), (D), by striking “and” at the end;
(2)
changed in subparagraph (D), (E), by striking the period at the end and inserting a semicolon; and
(3)
by adding at the end the following:

changed “(E) $170,000,000 “(F) $124,383,562 for each of fiscal years 2024 the period beginning on January 20, 2024, and 2025, ending on September 30, 2024, to remain available until expended; andexpended;

changed “(F) $42,849,315 “(G) $170,000,000 for the period beginning October 1, 2025, and ending December 31, fiscal year 2025, to remain available until expended.”expended; and

added “(H) $42,849,315 for the period beginning October 1, 2025, and ending December 31, 2025, to remain available until expended.”

Sec. 303 Delaying certain disproportionate share payment cuts

changed Section 1923(f)(7)(A) of the Social Security Act (42 U.S.C.1396r–4(f)(7)(A)) U.S.C. 1396r–4(f)(7)(A)) is amended—

(1)
changed in clause (i), in the matter preceding subclause (I), by striking “2024” and inserting “2026”; and(i)—
(A)
added by striking “For the period beginning January 20, 2024, and ending September 30, 2024, and for each of fiscal years 2025” and inserting “For each of fiscal years 2026”; and
(B)
added by striking “or period” each place such term appears; and
(2)
changed in clause (ii), by striking “2024” “for the period beginning January 20, 2024, and ending September 30, 2024, and for each of fiscal years 2025” and inserting “2026”.“for each of fiscal years 2026”.

Sec. 304 Medicaid improvement fund

changed Section 1941(b)(3)(A) of the Social Security Act (42 U.S.C. 1396w–1(b)(3)(A)) is amended by striking “$7,000,000,000” “ $6,357,117,810” and inserting “$0”.

Sec. 401 Increasing Plan Fiduciaries’ Access to Health Data

(a)
Plan fiduciary access to information—
(1)
In general— Paragraph (2) of section 408(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1108(b)) is amended by adding at the end the following new subparagraph:

“(C) No contract or arrangement for services between a group health plan and any other entity, including a health care provider (including a health care facility), network or association of providers, service provider offering access to a network of providers, third-party administrator, or pharmacy benefit manager, is reasonable within the meaning of this paragraph unless such contract or arrangement—

changed “(i) allows the responsible plan fiduciary (as defined in subparagraph (B)(ii)(I)(ee)) to audit or review all de-identified claims and encounter information or data described in section 724(a)(1)(B) to—

“(I) ensure that such entity complies with the terms of the plan and any applicable law; and

“(II) determine the reasonableness of compensation received by such entity; and

“(ii) does not—

“(I) unreasonably limit the number of audits permitted during a given period of time;

“(II) limit the number of de-identified claims and encounter information or data that the responsible plan fiduciary may access during an audit;

“(III) limit the disclosure of pricing terms for value-based payment arrangements or capitated payment arrangements, including—

“(aa) payment calculations and formulas;

“(bb) quality measures;

“(cc) contract terms;

“(dd) payment amounts;

“(ee) measurement periods for all incentives; and

“(ff) other payment methodologies used by an entity, including a health care provider (including a health care facility), network or association of providers, service provider offering access to a network of providers, third-party administrator, or pharmacy benefit manager;

“(IV) limit the disclosure of overpayments and overpayment recovery terms;

“(V) limit the right of the responsible plan fiduciary to select an auditor;

“(VI) otherwise limit or unduly delay by greater than 60 calendar days after the date of request the responsible plan fiduciary from auditing all de-identified claims and encounter information or data; or

changed “(VII) permit the entity to charge a fee beyond the reasonable direct costs to provide the required information and otherwise comply and assist with an audit request.request.”

removed “(D) Privacy requirements—Covered service providers shall provide information under this subparagraph in a manner consistent with the privacy, security, and breach notification regulations promulgated under section 13402(a) of the Health Information Technology for Clinical Health Act, and shall restrict the use and disclosure of such information according to such privacy regulations.

removed “(E) Disclosure and redisclosure

removed “(i) Limitation to business associates—A responsible plan fiduciary receiving a report under this subparagraph may disclose such information only to the entity from which the report was received, the group health plan for which the report pertains, or to that entity’s business associates as defined in section 160.103 of title 45, Code of Federal Regulations (or successor regulations) or as permitted by the HIPAA Privacy Rule (45 C.F.R. parts 160 and 164, subparts A and E).

removed “(ii) Clarification regarding public disclosure of information—Nothing in this section shall prevent a group health plan or health insurance issuer offering group health insurance coverage, or a covered service provider, from placing reasonable restrictions on the public disclosure of the information contained in a report described in this subparagraph, except that such plan, issuer, or entity may not restrict disclosure of such report to the Department of Labor.”

(2)
Civil enforcement—
(A)
In general— Subsection (c) of section 502 of such Act (29 U.S.C. 1132) is amended by adding at the end the following new paragraph:

“(13) In the case of an agreement between a group health plan and a health care provider (including a health care facility), network or association of providers, service provider offering access to a network of providers, third-party administrator, or pharmacy benefit manager, that violates the provisions of section 724, the Secretary may assess a civil penalty against such provider, network or association, service provider offering access to a network of providers, third-party administrator, pharmacy benefit manager, or other service provider in the amount of $10,000 for each day during which such violation continues. Such penalty shall be in addition to other penalties as may be prescribed by law.”

(B)
Conforming amendment— Paragraph (6) of section 502(a) of such Act is amended by striking “or (9)” and inserting “(9), or (13)”.
(3)
Existing provisions void— Section 410 of such Act is amended by adding at the end the following new subsection:

“(c) Any provision in an agreement or instrument shall be void as against public policy if such provision—

“(1) unduly delays or limits a plan fiduciary from accessing the de-identified claims and encounter information or data described in section 724(a)(1)(B); or

“(2) violates the requirements of section 408(b)(2)(C).”

(4)
removed Technical amendment— Clause (i) of section 408(b)(2)(B) of such Act is amended by striking “this clause” and inserting “this paragraph”.
(b)
Updated attestation for price and quality information— Section 724(a)(3) of the Employee Retirement Income Security Act (29 U.S.C. 1185m(a)(3)) is amended to read as follows:

“(3) Attestation

“(A) In general—Subject to subparagraph (C), the plan fiduciary of a group health plan or health insurance issuer offering group health insurance coverage shall annually submit to the Secretary an attestation that such plan or issuer of such coverage is in compliance with the requirements of this subsection. Such attestation shall also include a statement verifying that—

“(i) the information or data described under subparagraphs (A) and (B) of paragraph (1) is available upon request and provided to the plan fiduciary, the plan administrator, or the issuer in a timely manner; and

“(ii) there are no terms in the agreement under such paragraph (1) that directly or indirectly restrict or unduly delay a plan fiduciary, the plan administrator, or the issuer from auditing, reviewing, or otherwise accessing such information, except as permitted under section 408(b)(2)(C).

“(B) Limitation on submission—Subject to clause (ii), a group health plan or issuer offering group health insurance coverage may not enter into an agreement with a third-party administrator or other service provider to submit the attestation required under subparagraph (A).

“(C) Exception—In the case of a group health plan or issuer offering group health insurance coverage that is unable to obtain the information or data needed to submit the attestation required under subparagraph (A), such plan or issuer may submit a written statement in lieu of such attestation that includes—

“(i) an explanation of why such plan or issuer was unsuccessful in obtaining such information or data, including whether such plan or issuer was limited or prevented from auditing, reviewing, or otherwise accessing such information or data;

“(ii) a description of the efforts made by the plan fiduciary to remove any gag clause provisions from the agreement under paragraph (1); and

“(iii) a description of any response by the third-party administrator or other service provider with respect to efforts to comply with the attestation requirement under subparagraph (A).”

(c)
changed Report on plan assets— Not later than 1 year after the date of enactment of this Act, the Secretary of Labor shall submit to the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate a report on the status of de-identified claims and encounter information or data described in section 724(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185m), including information on the following:
(1)
Whether changes to regulations or guidance would permit such information or data to be deemed a group health plan asset (as defined under section 3(42) of such Act).
(2)
Whether restrictions on the ability of a plan fiduciary to access such information or data violates a requirement of current law.
(3)
The existing regulatory authority of the Secretary to clarify whether such information or data is the property of a group health plan, rather than a service provider.
(4)
changed Legislative actions that may be taken recommendations to establish that such information or data related to a plan belongs to a group health plan and is handled in the best interests of plan participants and beneficiaries.
(d)
Effective date— The amendments made by subsections (a) and (b) shall apply with respect to a plan beginning with the first plan year that begins on or after the date that is 1 year after the date of enactment of this Act.

Sec. 402 Hidden Fees Disclosure Requirements

(a)
Clarification of the application of fee disclosure requirements to covered service providers—
(1)
Services— Clause (ii)(I)(bb) of section 408(b)(2)(B) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1108(b)(2)(B)) is amended—
(A)
in subitem (AA) by striking “Brokerage services,” and inserting “Services (including brokerage services),”; and
(B)
in subitem (BB)—
(i)
by striking “Consulting,” and inserting “Other services,”; and
(ii)
by inserting “any of the following:” before “plan design”.
(2)
Disclosures— Clause (iii)(III) of section 408(b)(2)(B) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1108(b)(2)(B)) is amended by striking “, either in the aggregate or by service,” and inserting “by service”.
(b)
Strengthening disclosure requirements with respect to pharmacy benefit managers and third party administrators for group health plans—
(1)
changed Certain arrangements for PBM pharmacy benefit manager services considered as indirect—
(A)
In general— Clause (i) of section 408(b)(2)(B) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1108(b)(2)(B)) is amended—
(i)
by striking “requirements of this clause” and inserting “requirements of this subparagraph”; and
(ii)
by adding at the end the following: “For purposes of applying section 406(a)(1)(C) with respect to a transaction described under this subparagraph, a contract or arrangement for services between a covered plan and a health insurance issuer providing health insurance coverage in connection with the covered plan in which the health insurance issuer contracts, in connection with such plan, with a service provider for pharmacy benefit management services shall be considered to constitute an indirect furnishing of goods, services, or facilities between the plan and the service provider acting as the party in interest.”.
(B)
Health insurance issuer and health insurance coverage defined— Clause (ii)(I)(aa) of section 408(b)(2)(B) of such Act (29 U.S.C. 1108(b)(2)(B)) is amended by inserting before the period at the end “and the terms health insurance coverage and health insurance issuer have the meanings given such terms in section 733(b)”.
(C)
Technical amendment— Clause (ii)(I)(aa) of section 408(b)(2)(B) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1108(b)(2)(B)) is further amended by inserting “in” after “defined”.
(2)
Specific disclosure requirements with respect to pharmacy benefit management services—
(A)
In general— Clause (iii) of section 408(b)(2)(B) of such Act (29 U.S.C. 1108(b)(2)(B)) is amended by adding at the end the following:

“(VII) With respect to a contract or arrangement with the covered plan in connection with the provision of pharmacy benefit management services, as part of the description required under subclauses (III) and (IV)—

“(aa) all compensation described in clause (ii)(I)(dd)(AA), including fees, rebates, alternative discounts, co-payment offsets, and other remuneration expected to be received by the covered service provider, an affiliate, or a subcontractor from a pharmaceutical manufacturer, distributor, rebate aggregator, accumulator, and maximizer, group purchasing organization, or any other third party;

“(bb) the amount and form of any rebates, discounts, or price concessions, including the amount expected to be passed through to the plan sponsor or the participants and beneficiaries under the covered plan;

“(cc) all compensation expected to be received by the covered service provider, an affiliate, or a subcontractor as a result of paying a lower amount for the drug than the amount charged as a copayment, coinsurance amount, or deductible;

“(dd) all compensation expected to be received by the covered service provider, an affiliate, or a subcontractor as a result of paying pharmacies less than what is charged the health plan, plan sponsor, or participants and beneficiaries under the covered plan; and

“(ee) all compensation expected to be received by the covered service provider, an affiliate, or a subcontractor from drug manufacturers and any other third party in exchange for—

“(AA) administering, invoicing, allocating, or collecting rebates related to the covered plan;

“(BB) providing business services and activities, including providing access to drug utilization data;

“(CC) keeping a percentage of the list price of a drug; or

“(DD) any other reason related to the role of a covered service provider as a conduit between the drug manufacturers or any other third party and the covered plan.”

(B)
Annual disclosure— Clause (v) of section 408(b)(2)(B) of such Act (29 U.S.C. 1108(b)(2)(B)) is amended by adding at the end the following:

“(III) A covered service provider, with respect to a contract or arrangement with the covered plan in connection with providing pharmacy benefit management services, shall disclose, on an annual basis not later than 60 days after the beginning of the current plan year, to a responsible plan fiduciary, in writing, the following with respect to the twelve months preceding the current plan year:

“(aa) All direct compensation described in subclause (III) of clause (iii) and indirect compensation described in subclause (IV) of clause (iii) received by the covered service provider (including such compensation described in subclause (VII) of clause (iii)).

changed “(bb) For each drug covered under the covered plan, the amount by which the price for the drug paid by the plan exceeds the amount paid to pharmacies The total gross spending by the covered service provider.plan on drugs (excluding rebates, discounts, or other price concessions).

changed “(cc) The total gross net spending by the covered plan on drugs (excluding rebates, discounts, or other price concessions).drugs.

changed “(dd) The total net gross spending at all pharmacies wholly or partially owned by the covered plan on drugs.service provider or any entity affiliated with the covered service provider, including mail-order, specialty and retail pharmacies, with a breakdown by individual pharmacy location.

changed “(ee) The total gross spending at all pharmacies wholly or partially owned by the covered service provider or any entity affiliated with the covered service provider, aggregate amount of clawback from such pharmacies, including mail-order, specialty specialty, and retail pharmacies, with a breakdown by individual pharmacy location.pharmacies.

removed “(ff) The aggregate amount of clawback from such pharmacies, including mail-order, specialty, and retail pharmacies.

“(AA) categorical explanations (grouped by the reason for clawback, such as contractual true-up provisions, overpayments, or non-covered medication dispensed, and including information on the amount in each category that was passed through to the covered plan and to participants and beneficiaries of the covered plan); or

“(BB) individual explanations for such clawbacks.

added “(ff) Total aggregate amounts of fees collected by the covered service provider, an affiliate, or a subcontractor in connection with the provision of pharmacy benefit management services to the covered plan.

changed “(gg) Total aggregate amounts of fees collected Any other information specified by the covered service provider, an affiliate, Secretary through regulations or guidance that may be necessary for a subcontractor in connection with responsible plan fiduciary to consider the provision merits of pharmacy benefit management services to the contract or arrangement with the covered plan.service provider and any conflicts of interest that may exist.”

removed “(hh) Any other information specified by the Secretary through regulations or guidance that may be necessary for a responsible plan fiduciary to consider the merits of the contract or arrangement with the covered service provider and any conflicts of interest that may exist.”

(C)
Pharmacy benefit management services defined— Clause (ii)(I) of section 408(b)(2)(B) of such Act (29 U.S.C. 1108(b)(2)(B)) is amended by adding at the end the following:

“(gg) The term pharmacy benefit management services includes any services provided by a covered service provider to a covered plan with respect to the administration of prescription drug benefits under the covered plan, including—

changed “(AA) the processing and payment of claims;

“(BB) design of pharmacy networks;

“(CC) negotiation, aggregation, and distribution of rebates, discounts, and other price concessions;

“(DD) formulary design and maintenance;

“(EE) operation of pharmacies (whether retail, mail order, specialty drug, or otherwise);

“(FF) recordkeeping;

“(GG) utilization review;

“(HH) adjudication of claims; and

“(II) any other services specified by the Secretary through guidance or rulemaking.”

(D)
Clawback defined— Clause (ii)(I) of section 408(b)(2)(B) of such Act (29 U.S.C. 1108(b)(2)(B)), as amended by subparagraph (C), is amended by adding at the end the following:

“(hh) The term clawback means amounts collected by a provider of pharmacy benefit management services from a pharmacy for copayments collected from a participant or beneficiary in excess of the contracted rate.”

(3)
Specific disclosure requirements with respect to third party administration services for group health plans—
(A)
changed In general— Clause (iii) of section 408(b)(2)(B) of such Act (29 U.S.C. 1108(b)(2)(B)), as amended by paragraph (2)(A), is further amended by adding at the end the following:

“(VIII) With respect to a contract or arrangement with the covered plan in connection with the provision of third party administration services for group health plans, as part of the description required under subclauses (III) and (IV)—

“(aa) the amount and form of any rebates, discounts, savings fees, refunds, or amounts received from providers and facilities, including the amounts that will be retained by the covered service provider as a fee;

“(bb) the amount and form of fees expected to be received from other service providers in relation to the covered plan, including the amounts that will be retained by the covered service provider as a fee; and

“(cc) the amount and form of expected recoveries by the covered service provider, including the amounts that will be retained by the covered service provider as a fee (disaggregated by category), as a result of—

“(AA) overpayments;

“(BB) erroneous payments;

“(CC) uncashed checks or incomplete payments;

“(DD) billing errors;

“(EE) subrogation;

“(FF) fraud; or

“(GG) any other reason on behalf of the covered plan.”

(B)
Annual disclosure— Clause (v) of section 408(b)(2)(B) of such Act (29 U.S.C. 1108(b)(2)(B)), as amended by paragraph (2)(B), is amended by adding at the end the following:

“(IV) A covered service provider, with respect to a contract or arrangement with the covered plan in connection with providing third party administration services for group health plans, shall disclose, on an annual basis not later than 60 days after the beginning of the current plan year, to a responsible plan fiduciary, in writing, the following with respect to the twelve months preceding the current plan year:

“(aa) All direct compensation described in subclause (III) of clause (iii).

“(bb) All indirect compensation described in subclause (IV) of clause (iii) received by the covered service provider, an affiliate, or a subcontractor (including such compensation described in subclause (VIII) of clause (iii)).

“(cc) The aggregate amount for which the covered service provider, an affiliate, or a subcontractor received indirect compensation and the estimated amount of cost-sharing incurred by plan participants and beneficiaries as a result.

“(dd) The total gross spending by the covered plan on all costs and fees arising under or paid under the administrative services agreement with the covered service provider (not including any amounts described in items (aa) through (cc) of clause (iii)(VIII)).

“(ee) The total net spending by the covered plan on all costs and fees arising under or paid under the administrative services agreement with the covered service provider.

“(ff) The aggregate fees collected by the covered service provider, an affiliate, or a subcontractor.

“(gg) Any other information specified by the Secretary through regulations or guidance that may be necessary for a responsible plan fiduciary to consider the merits of the contract or arrangement with the covered service provider and any conflicts of interest that may exist.”

(C)
Third party administration services for group health plans defined— Clause (ii)(I) of section 408(b)(2)(B) of such Act (29 U.S.C. 1108(b)(2)(B)), as amended by paragraph (2)(C), is amended by adding at the end the following:

“(ii) The term third party administration services for group health plans includes any services provided by a covered service provider, an affiliate, or a subcontractor to a covered plan with respect to the administration of health benefits under the covered plan, including—

“(AA) the processing, repricing, and payment of claims;

“(BB) design, creation, and maintenance of provider networks;

“(CC) negotiation of discounts off gross rates;

“(DD) benefit and plan design;

“(EE) negotiation of payment rates;

“(FF) recordkeeping;

“(GG) utilization review;

“(HH) adjudication of claims;

“(II) regulatory compliance; and

“(JJ) any other services set forth in an administrative services agreement or similar agreement or specified by the Secretary through rulemaking.”

(4)
Rule of construction— Nothing in the amendments made by this section shall be construed to imply that a practice in relation to which a covered service provider is required to provide information as a result of such amendments is permissible under Federal law.
(5)
Effective date— No contract or arrangement entered into prior to January 1, 2025, shall be subject to the requirements of subsection (b).
(c)
added Privacy requirements— Section 408(b)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1108(b)(2)), as amended by section 401, is further amended by adding at the end the following:

added “(D) Privacy requirements—Covered service providers shall provide information under subparagraph (B) in a manner consistent with the privacy, security, and breach notification regulations promulgated under section 13402(a) of the Health Information Technology for Clinical Health Act (42 U.S.C. 17932(a)), and consistent with the HIPAA privacy regulations (as defined in section 1180(b)(3) of the Social Security Act) and shall restrict the use and disclosure of such information according to such privacy, security, and breach notification regulations and such HIPAA privacy regulations.

added “(E) Disclosure and redisclosure

added “(i) Limitation to business associates—A responsible plan fiduciary receiving information disclosed under subparagraph (B) may disclose such information only to the entity from which the information was received, the group health plan for which the information pertains, or to that entity’s business associates as defined in section 160.103 of title 45, Code of Federal Regulations (or successor regulations) or as permitted by the HIPAA Privacy Rule (45 CFR parts 160 and 164, subparts A and E).

added “(ii) Clarification regarding public disclosure of information—Nothing in this section shall prevent a group health plan or health insurance issuer offering group health insurance coverage, or a covered service provider, from placing reasonable restrictions on the public disclosure of the information described in this subparagraph, except that such plan, issuer, or entity may not restrict disclosure of such information to the Department of Labor.

added “(F) Additional privacy requirements

added “(i) In general—Covered service providers shall ensure that information provided under subparagraph (B) contains only summary health information, as defined in section 164.504(a) of title 45, Code of Federal Regulations (or successor regulations).

added “(ii) Restrictions—A group health plan must comply with section 164.504(f) of title 45, Code of Federal Regulations and a responsible plan administrator who is a plan sponsor must act in accordance with the terms of the agreement described in such section.

added “(G) Rule of construction—Nothing in this section shall be construed to modify the requirements for the creation, receipt, maintenance, or transmission of protected health information under the HIPAA privacy regulations (as defined in section 1180(b)(3) of the Social Security Act).”

(d)
renumbered was (4) Implementation— Not later than 1 year after the date of enactment of this Act, the Secretary of Labor shall issue notice and comment rulemaking as necessary to implement the provisions of this section. The Secretary shall ensure that such rulemaking—
(1)
renumbered was (4)(3) accounts for the varied compensation practices of covered service providers (as defined under section 408(b)(2)(B); and
(2)
renumbered was (4)(4) establishes standards for the disclosure of expected compensation by such covered service providers.

Sec. 404 Implementation funding

(a)
changed In general— For the purposes described in subsection (b), and in addition to amounts otherwise available for such purposes there are appropriated, out of amounts in the Treasury not otherwise appropriated, to the Secretary of Labor $12,000,000, $35,000,000, for fiscal year 2024, to remain available through fiscal year 2029.
(b)
Permitted purposes— The purposes described in this subsection are limited to the following purposes, insofar as such purposes are to carry out the provisions of, including the amendments made by, title I and IV:
(1)
Preparing, drafting, and issuing proposed and final regulations or interim regulations.
(2)
Preparing, drafting, and issuing guidance and public information.
(3)
Preparing, drafting, and publishing reports.
(4)
Enforcement of such provisions.
(5)
Reporting, collection, and analysis of data.
(6)
Other administrative duties necessary for implementation of such provisions.
(c)
changed Transparency of implementation funds— The Secretary described in subsection (a) of Labor shall annually submit, no later than September 1st of each year, to the Committees on Education and Workforce and on Appropriations of the House of Representatives and the Committees on Health, Education, Labor, and Pensions and on Appropriations of the Senate a report on funds expended pursuant to funds appropriated under this section.