[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7389 Introduced in House (IH)]
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117th CONGRESS
2d Session
H. R. 7389
To amend title XIX of the Social Security Act to codify value-based
purchasing arrangements under the Medicaid program and reforms related
to price reporting under such arrangements, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 4, 2022
Mr. Schrader (for himself, Mr. Guthrie, and Mr. Mullin) introduced the
following bill; which was referred to the Committee on Energy and
Commerce
_______________________________________________________________________
A BILL
To amend title XIX of the Social Security Act to codify value-based
purchasing arrangements under the Medicaid program and reforms related
to price reporting under such arrangements, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Medicaid VBPs for Patients Act'' or
the ``MVP Act''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) Value-based payment (VBP) arrangements are a critical
component of a modernized reimbursement system. By codifying
elements of the recently finalized ``multiple best price''
policies of the Centers for Medicare & Medicaid Services,
Congress is enshrining a sustainable and flexible payment
approach for innovative treatments and cures.
(2) Many of these treatments, including gene therapies, are
different from traditional pharmaceutical and biologic products
in that they can offer long-lasting--sometimes lifelong--
benefits for patients and long-term value for the health care
system alike.
(3) There are hundreds of innovative, curative, and life-
changing treatments currently in development in the United
States. However, the current reimbursement structure was not
designed with these therapies in mind, and allowing for
innovative payment arrangements will spur greater development
and access to future cures and treatments.
(4) Medicaid is currently losing out on innovative ways to
ensure patients have access to these treatments, while private
payors continue to see the value provided through flexible
payment arrangements.
(5) VBP arrangements include the ability to pay based on
evidence-based outcomes and, over time, spreading the risk
across all entities involved in the contract and ensuring that
these often costly treatments are accessible.
(6) Evidence-based outcomes can demonstrate decreased cost
to the health system and to patients, including reduced
hospitalizations and lower utilization of other health care
expenditures, including lab work, other medications, and office
visits.
(7) By allowing VBPs in Medicaid, the health care system
will continue to move towards quality over quantity, holding
manufacturers and providers accountable for the best treatment
for every patient.
SEC. 3. CODIFYING VALUE-BASED PURCHASING ARRANGEMENTS UNDER MEDICAID
AND REFORMS RELATED TO PRICE REPORTING UNDER SUCH
ARRANGEMENTS.
(a) Codifying the VBP Rule.--The revision to section 447.505(a) of
title 42, Code of Federal Regulations related to the inclusion of
varying best price points available under a value-based purchasing
arrangement (as defined in section 1927(k)(12) of the Social Security
Act (42 U.S.C. 1396r-8(k)(12), as added by subsection (d) of this
section) for a single dosage form and strength of a covered outpatient
drug if a manufacturer offers such pricing structure to all States, as
published by the Secretary of Health and Human Services on December 31,
2020 (85 Federal Register 87000), shall have the force and effect of
law.
(b) Quarterly Reporting Obligation.--
(1) In general.--Section 1927(b)(3)(A) of the Social
Security Act (42 U.S.C. 1396r-8(b)(3)(A)) is amended--
(A) in clause (iv), by striking at the end ``and'';
(B) in clause (v), by striking at the end the
period and inserting ``; and'';
(C) by inserting after clause (v) the following new
clause:
``(vi) for calendar quarters beginning on
or after July 1, 2022, in conjunction with
reporting required under clause (i), in the
case of a covered outpatient drug that is sold
under a value-based purchasing arrangement (as
defined in subsection (k)(12)) made available
by the manufacturer to a State plan--
``(I) the pricing structure for
such drug based on pre-defined outcomes
or measures specified in such value-
based purchasing arrangement; and
``(II) the best price for such
covered outpatient drug outside of a
value-based purchasing arrangement,
which in the event such drug is sold
exclusively through such an
arrangement, means the lowest price
available net of any discounts or
offsets that are unrelated to a refund,
rebate, reimbursement, free item,
withholding, or repayment made under a
value-based purchasing arrangement for
such drug.''; and
(D) by adding at the end of the flush left matter
at the end the following new sentence: ``Information
reported with respect to a rebate period under clause
(i)(I) relating to average manufacturer price and
clause (i)(II) relating to best price shall be updated
for such rebate period if, subsequent to the date such
information was reported, cumulative discounts,
rebates, or other arrangements adjust such average
price actually realized or best price available to the
extent that such cumulative discounts, rebates, or
other arrangements are not excluded under this section
from the determination of average manufacturer price or
best price.''
(2) Rules of construction.--Nothing in the amendments made
by paragraph (1) shall be construed as--
(A) requiring--
(i) a State to enter into a value-based
purchasing arrangement with a manufacturer for
a covered outpatient drug; or
(ii) a manufacturer to enter into a value-
based purchasing arrangement with a State for a
covered outpatient drug;
(B) prohibiting a manufacturer from treating a
value-based purchasing arrangement as a bundled sale;
or
(C) precluding the execution of a supplemental
rebate agreement, as provided in section 1927(a)(1) of
the Social Security Act (42 U.S.C. 1396r-8(a)(1)), for
a covered outpatient drug sold under a value-based
purchasing arrangement.
(c) Definition of Average Manufacturer Price.--Section 1927(k)(1)
of the Social Security Act (42 U.S.C. 1396r-8(k)(1)) is amended--
(1) in subparagraph (B)(i)--
(A) in subclause (IV), by striking at the end
``and'';
(B) in subclause (V), by striking the period at the
end and inserting ``; and''; and
(C) by adding at the end the following new
subclause:
``(VI) in accordance with
subsection (b)(3)(A)(vi), with respect
to such covered outpatient drug that is
sold under a value-based purchasing
arrangement (as defined in paragraph
(12)) during the rebate period--
``(aa) a refund, rebate,
reimbursement, or free goods
from the manufacturer or third
party on behalf of the
manufacturer; or
``(bb) the withholding or
reduction of a payment to the
manufacturer or third party on
behalf of the manufacturer;
that is triggered by a patient who
fails to achieve outcomes or measures
defined under the terms of such value-
based purchasing arrangement during the
period for which such agreement is
effective.''; and
(2) by adding at the end the following new subparagraph:
``(D) Special rule for certain value-based
purchasing arrangements.--For purposes of subparagraph
(A), in determining the average price paid to the
manufacturer for a covered outpatient drug that is sold
under a value-based purchasing arrangement (as defined
in paragraph (12)) that provides that payment for such
drug is made in installments over the course of such
agreement, such price shall be determined as if the
aggregate price per the terms of the agreement was paid
in full in the first installment during the rebate
period.''.
(d) Definition of Value-Based Purchasing Arrangement.--Section
1927(k) of the Social Security Act (42 U.S.C. 1396r-8(k)) shall be
amended by adding at the end the following paragraph:
``(12) Value-based purchasing arrangement.--The term
`value-based purchasing arrangement' means an arrangement or
agreement intended to align pricing or payments to an observed
or expected therapeutic or clinical value in a select
population and includes--
``(A) evidence-based measures, which substantially
link the cost of a covered outpatient drug to existing
evidence of effectiveness and potential value for
specific uses of that product; or
``(B) outcomes-based measures, which substantially
link payment for the covered outpatient drug to that of
the drug's actual performance in patient or a
population, or a reduction in other medical
expenses.''.
(e) Effective Date.--The amendments made by this section shall
apply beginning on July 1, 2022.
SEC. 4. REMUNERATION IN FEDERAL HEALTH CARE PROGRAMS.
(a) In General.--Section 1128B(b)(3) of the Social Security Act (42
U.S.C. 1320a-7b(b)(3)) is amended--
(1) in subclause (J)--
(A) by moving the left margin of such subparagraph
2 ems to the left; and
(B) by striking ``and'' after the semicolon at the
end;
(2) in subclause (K)--
(A) by moving the left margin of such subparagraph
2 ems to the left; and
(B) by striking the period at the end and inserting
``; and''; and
(3) by adding at the end the following new subparagraph:
``(L) any remuneration provided by a manufacturer
or third party on behalf of a manufacturer to a plan
under a value-based purchasing arrangement (as defined
in section 1927(k)(12)) in the case a patient fails to
achieve outcomes or measures defined in such
arrangement following the administration of a covered
outpatient drug (as defined in section 1927(k)(2)).''.
(b) Effective Date.--The amendments made by this section shall
apply beginning on July 1, 2022.
SEC. 5. GAO STUDY AND REPORT ON USE OF VALUE-BASED PURCHASING
ARRANGEMENTS.
(a) Study.--The Comptroller General of the United States shall
conduct a study on the extent to which value-based purchasing
arrangements (as defined in section 1927(k)(12) of the Social Security
Act (42 U.S.C. 1396r-8(k)(12)) facilitate patient access to covered
outpatient drugs, improve patient outcomes, lower overall health system
costs, and lower costs for patients in Federal health care programs. In
conducting such study, the Comptroller General shall--
(1) study the impact of this Act on--
(A) access to transformative therapies, including
rare disease gene therapies, generally;
(B) mitigating socioeconomic disparities in
accessing covered outpatient drugs sold under value-
based purchasing arrangements through its requirement
that State Medicaid programs have access to the same
value-based purchasing arrangement pricing structure
that are available in the commercial market for such
drugs; and
(C) the Medicaid drug rebate program under section
1927 of the Social Security Act (42 U.S.C. 1396r-8),
the 340B drug pricing program under section 340B of the
Public Health Service Act (42 U.S.C. 256b), and part B
of title XVIII of the Social Security Act (42 U.S.C.
1395j et seq.), including compliance with such
programs; and
(2) using data submitted pursuant to clause (vi) of section
1927(b)(3)(A) of the Social Security Act (42 U.S.C. 1396r-
8(b)(3)(A)), as added by section 3 of this Act, analyze all the
types of value-based purchasing arrangement pricing structures,
which structures are working well (as measured by price and
ease of implementing), and which need improvement.
(b) Report.--Not later than June 30, 2027, the Comptroller General
of the United States shall submit to Congress a report containing the
results of the study conducted under subsection (a).
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