The Source Blog

This blog post is copublished with Milbank Memorial Fund. On July 9, 2021, President Biden issued an Executive Order on Promoting Competition in the American Economy, announcing his intent to reinvigorate antitrust enforcement throughout US industries with a special focus on certain markets including health care. The executive order and accompanying fact sheet cites research showing that hospitals in consolidated markets charge far higher prices than hospitals with several competitors and that hospital consolidation has left many areas, especially rural communities, without good options for convenient and affordable health care …

On December 10, 2020, the Supreme Court overturned a decision by the Eighth Circuit and upheld an Arkansas Law to regulate pharmacy benefit managers (PBMs).  In a unanimous decision (8-0, Justice Barrett did not participate in the case), the court reaffirmed that state regulation of prices is not preempted by the Employee Retirement Income Security Act of 1974 (ERISA). The ruling in this case found that Arkansas’ law was a price regulation.  In effect, the law required PBMs to reimburse pharmacies at a rate above the price the pharmacy paid …

In the 2020 legislative session, the California legislature enacted AB 2118 to require insurance companies selling insurance plans in the individual or small group market in California to file additional information, including premiums, cost sharing, benefits, enrollment, and trend factors, with the state Department of Managed Health Care (DMHC) or the California Department of Insurance (CDI).[1] This new law reflects an effort to give state agencies better oversight of state healthcare markets by patching small holes in the rate review process of state regulators. However, the time may be ripe …

On October 6, the Supreme Court will hear oral arguments in the case Rutledge v. Pharmaceutical Care Management Association (PCMA). A decision in this case will resolve whether an Arkansas law to regulate pharmacy benefit managers (PBMs), Act 900, is preempted by federal law and  may affect the enforceability of similar laws passed by at least thirty-five other states.[1] Arkansas passed Act 900 to protect pharmacies from dispensing drugs at a loss. Specifically, the law requires PBMs, when challenged by a pharmacy, to raise the reimbursement rate for a drug …

[Post Updated: April 20, 2020] Earlier this year, the federal government appeared poised to address the problem of surprise billing,[1] but the coronavirus pandemic shifted policy priorities before Congress had a chance to act. While some lawmakers may try to include surprise billing protections in the next COVID-19 stimulus package, the pandemic and its ripple effects make action by lawmakers to address surprise billing critical. Surprise bills, also known as balance bills, may occur when a patient unavoidably sees an out-of-network provider for an emergency situation or unexpectedly sees an …

On Thursday, December 12, 2019, the House passed H.R. 3, the Elijah Cummings Lower Drug Costs Now Act, with unanimous support of House Democrats, but only 2 Republican votes. While the primary provisions of the bill and the conclusions drawn in our original blog post remain unchanged, we highlight two changes made to the bill as described in our post before it was passed. First, the original bill required drug manufacturers that increase the price of a drug faster than the rate of inflation (benchmarked to prices in 2016) to …

*See 12/13/19 Update: House Passes the Elijah Cummings Lower Drug Costs Now Act (H.R. 3)   Increasing the affordability of prescription drugs is of primary importance to Congress and to the nation. In this post, we review two of the federal bills receiving substantial press coverage – the Lower Drug Costs Now Act, introduced in the House by Speaker Pelosi and the Prescription Drug Pricing Reduction Act, introduced in the Senate by Senator Grassley. While the current bills may have a bumpy road to approval, we analyze the proposals in …

See UFCW & Employers Benefit Trust v. Sutter Health case page.   The lawsuit alleging anticompetitive conduct by Sutter Health is scheduled to begin trial on October 7, 2019 in the Superior Court of San Francisco. In the case, California Attorney General and private parties United Food and Commercial Workers union (UFCW) and Employers Benefit Trust (UEBT) allege that Sutter Health used its position as a dominant provider of hospital services in Northern California to demand anticompetitive contract terms from insurance carriers.[1],[2] Since the factual allegations and legal claims made in both the …

The Lower Health Care Costs Act, released in May 2019 by Senators Lamar Alexander and Patty Murray, addresses many inefficiencies in healthcare markets and has the potential to both increase competition and lower costs for healthcare services. The 195-page draft federal bill, also known as the Alexander-Murray Bill (S 1895), contains more than three dozen provisions designed to address health care costs. The bill is divided into five titles: 1) Ending Surprise Medical Bills, 2) Reducing the Prices of Prescription Drugs, 3) Improving Transparency in Health Care, 4) Improving Public …

*Update: On May 13, 2019, Governor Jay Inslee signed SB 5526 into law making Washington the first state public option plan. Washington now takes the first difficult steps toward implementing the law.  In the current political climate, debate continues at the state and federal level over the role of government in containing health care costs and ensuring coverage for all Americans. Specifically, in a survey done in March 2019 by the Kaiser Family Foundation, a majority of Americans (56%) supported a national health plan.[1] Little consensus, however, exists on how …