[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4508 Reported in House (RH)]
<DOC>
Union Calendar No. 209
118th CONGRESS
1st Session
H. R. 4508
[Report No. 118-259]
To amend the Employee Retirement Income Security Act of 1974 to clarify
and strengthen the application of certain employer-sponsored health
plan disclosure requirements.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 10, 2023
Mr. Courtney (for himself and Mrs. Houchin) introduced the following
bill; which was referred to the Committee on Education and the
Workforce
November 1, 2023
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed
in italic]
[For text of introduced bill, see copy of bill as introduced on July
10, 2023]
_______________________________________________________________________
A BILL
To amend the Employee Retirement Income Security Act of 1974 to clarify
and strengthen the application of certain employer-sponsored health
plan disclosure requirements.
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 ``Hidden Fee Disclosure Act of 2023''.
SEC. 2. CLARIFICATION OF THE APPLICATION OF FEE DISCLOSURE REQUIREMENTS
TO COVERED SERVICE PROVIDERS.
(a) 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--
(1) in subitem (AA) by striking ``Brokerage services,'' and
inserting ``Services (including brokerage services),''; and
(2) in subitem (BB)--
(A) by striking ``Consulting,'' and inserting
``Other services,''; and
(B) by inserting ``any of the following:'' before
``plan design''.
(b) 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''.
SEC. 3. STRENGTHENING DISCLOSURE REQUIREMENTS WITH RESPECT TO PHARMACY
BENEFIT MANAGERS AND THIRD PARTY ADMINISTRATORS FOR GROUP
HEALTH PLANS.
(a) Certain Arrangements for PBM Services Considered as Indirect.--
(1) 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--
(A) by striking ``requirements of this clause'' and
inserting ``requirements of this subparagraph''; and
(B) 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.''.
(2) Health insurance issuer and health insurance coverage
defined.--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 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)''.
(b) Specific Disclosure Requirements With Respect to Pharmacy
Benefit Management Services.--
(1) 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,
group purchasing organization, or any other
third party; and
``(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 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 as a
result of paying pharmacies less than what is
charged the health plan, plan sponsor, or
participants and beneficiaries under the
covered plan;
``(ee) all compensation expected to be
received by the covered service provider 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.''.
(2) Annual disclosure.--
(A) 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)).
``(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 by
the covered service provider.
``(cc) The total gross spending by the covered plan
on drugs (excluding rebates, discounts, or other price
concessions).
``(dd) The total net spending by the covered plan
on drugs.
``(ee) The total gross spending at all pharmacies
wholly or partially owned by the covered service
provider, including mail-order, specialty and retail
pharmacies, with a breakdown by individual pharmacy
location.
``(ff) The aggregate amount of clawback from
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.
``(gg) Total aggregate amounts of fees collected by
the covered service provider in connection with the
provision of pharmacy benefit management services to
the covered plan.
``(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.''.
(3) 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--
``(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); recordkeeping;
``(FF) utilization review;
``(GG) adjudication of claims; and
``(HH) any other services specified by the
Secretary through guidance or rulemaking.''.
(4) 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 paragraph (3), is amended by adding at the end the
following:
``(hh) The term `clawback' means amounts collected
by a pharmacy benefit manager from a pharmacy for
copayments collected from a participant or beneficiary
in excess of the contracted rate.''.
(c) Specific Disclosure Requirements With Respect to Third Party
Administration Services for Group Health Plans.--
(1) In general.--Clause (iii) of section 408(b)(2)(B) of
such Act (29 U.S.C. 1108(b)(2)(B)), as amended by subsection
(b)(1), is 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.''.
(2) Annual disclosure.--Clause (v) of section 408(b)(2)(B)
of such Act (29 U.S.C. 1108(b)(2)(B)), as amended by subsection
(b)(2), 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 (including such compensation described
in subclause (VIII) of clause (iii)).
``(cc) The aggregate amount for which the covered
service provider 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 third-party
administrator (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.
``(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.''.
(3) 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 paragraphs (3) and
(4) of subsection (b), 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 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; negotiation
of payment rates;
``(EE) recordkeeping;
``(FF) utilization review;
``(GG) adjudication of claims;
``(HH) regulatory compliance; and
``(II) any other services set forth in an
administrative services agreement or similar
agreement or specified by the Secretary through
guidance or rulemaking.''.
(d) 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.
(e) Effective Date.--The amendments made by this section shall take
effect on January 1, 2025.
SEC. 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 Act. The Secretary shall
ensure that such rulemaking--
(1) accounts for the varied compensation practices of
covered service providers (as defined under section
408(b)(2)(B); and
(2) establishes standards for the disclosure of expected
compensation by such covered service providers.
Union Calendar No. 209
118th CONGRESS
1st Session
H. R. 4508
[Report No. 118-259]
_______________________________________________________________________
A BILL
To amend the Employee Retirement Income Security Act of 1974 to clarify
and strengthen the application of certain employer-sponsored health
plan disclosure requirements.
_______________________________________________________________________
November 1, 2023
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed