Illustration: Sarah Grillo/Axios
An overhaul of PBMs' business practices will be included in Republicans' reconciliation bill, House Energy and Commerce health subcommittee Chair Buddy Carter told Axios on Tuesday.
Why it matters: Policies such as changing the way PBMs are paid in Medicare Part D could generate billions in savings to pay for a "doc fix" or other provider asks that are piling up.
- But a number of PBM proposals could still be deemed extraneous to the reconciliation process and fall victim to the Senate's Byrd rule.
What they're saying: "Right now we've got a commitment [from leadership] that we'll have it in the reconciliation package," Carter told Axios, referring to PBM overhaul.
- "The things that will pass the Byrd bath, we're going to have in reconciliation."
- Delinking PBMs' compensation from the price of a drug in Medicare Part D and banning spread pricing in Medicaid could comply with the Byrd rule, he said.
But transparency measures like those featured in the Lower Costs, More Transparency Act, particularly focused on the commercial market, probably won't make the cut, Carter said.
Reality check: Although Carter says he has a commitment from leaders, reconciliation still is very much a work in progress, and the Energy and Commerce Committee is still evaluating options.
- "Leadership is working closely with committee to look at options," a House GOP leadership aide told Axios.
State of play: Majority Leader Steve Scalise confirmed to Axios on Tuesday that the GOP would address Medicare physician payment cuts via the reconciliation package.
- Rep. Greg Murphy, who had been pushing hard to recoup some of the 2.8% payment cut to doctors that took effect in January, acknowledged that doing so in reconciliation could be costly.
- But it's possible that savings from a PBM overhaul could help pay for that priority, or be applied to extending tax cuts.
By the numbers: CBO estimated that a "doc fix" clawing back 2.5 percentage points from this year's cut alone could cost $1.9 billion, according to a health care industry source.
- PBM measures would probably not be adequate to fully offset a long-term or permanent "doc fix."
- CBO estimated that banning spread pricing in Medicaid could save about $1.1 billion over a decade.
- And Senate Finance's PBM package from the 118th Congress, which included Medicare delinking, a ban on Medicaid spread pricing and lowering cost-sharing for patients, was estimated to save over $1 billion.
The bottom line: Much remains up in the air, but it's notable that major components of last year's health package are being floated for reconciliation.
