,i #aaith ,,congress #ast ,session ,h4 ,r4 #bjda ,,in ,,the ,,house ,,of ,,representatives ,march #aa1 #bjbe,mr4 ,courtney 7for himself and ,mrs4 ,houchin7 introduced the following bill2 which was referred to the ,committee on ,education and ,workforce ,a ,,bill ,to amend the ,employee ,retirement ,income ,security ,act of #aigd to clarify and strengthen the application of certain employer-sponsored health plan disclosure requirements4 #a4 ,short title ,this ,act may be cited as the ,hidden ,fee ,disclosure ,act of #bjbe4 #b4 ,clarification of the application of fee disclosure requirements to covered service providers 7a7 ,services ,clause 7ii77,i77bb7 of section #djh7;b77#b77;,b7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajh7;b77#b77;,b77 is amended-- 7#a7 in subitem 7,,aa7 by striking ,brokerage services1 and inserting ,services 7including brokerage services712 and 7#b7 in subitem 7,,bb7-- 7,a7 by striking ,consulting1 and inserting ,other services12 and 7,b7 by striking related to the development or implementation of plan design and all that follows through the period at the end and inserting any of the following3 plan design1 claim repricing1 insurance or insurance product selection 7including vision and dental71 recordkeeping1 medical management1 benefits administration selection 7including vision and dental71 stop-loss insurance1 pharmacy benefit management services1 wellness design and management services1 transparency tools1 group purchasing organization agreements and services1 participation in and services from preferred vendor panels1 disease management1 compliance services1 employee assistance programs1 or third party administration services1 or consulting services related to any such services44 7b7 ,disclosures ,clause 7iii77,,iii7 of section #djh7;b77#b77;,b7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajh7;b77#b77;,b77 is amended by striking 1 either in the aggregate or by service1 and inserting by service4 #c4 ,strengthening disclosure requirements with respect to entities providing pharmacy benefit management services and third party administrators for group health plans 7a7 ,certain arrangements for pharmacy benefit management services considered as indirect 7#a7 ,in general ,clause 7i7 of section #djh7;b77#b77;,b7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajh7;b77#b77;,b77 is amended-- 7,a7 by striking requirements of this clause and inserting requirements of this subparagraph2 and 7,b7 by adding at the end the following3 ,for purposes of applying section #djf7;a77#a77;,c7 with respect to a transaction described under this subparagraph1 a contract or arrangement for services between a covered plan and an entity or subsidiary providing services to the plan1 including a health insurance issuer providing health insurance coverage in connection with the covered plan in which the entity or subsidiary contracts1 in connection with such plan1 with a service provider for pharmacy benefit management services shall be considered an indirect furnishing of goods1 services1 or facilities between the covered plan and the service provider for pharmacy benefit management services acting as the party in interest44 7#b7 ,health insurance issuer and health insurance coverage defined ,clause 7ii77,i77aa7 of section #djh7;b77#b77;,b7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajh7;b77#b77;,b77 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 #gcc7;b74 7#c7 ,technical amendment ,section #djh7;b77#b77;,b77ii77,i77aa7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajh7;b77#b77;,b77ii77,i77aa77 is further amended by inserting in after defined4 7b7 ,specific disclosure requirements with respect to entities providing pharmacy benefit management services 7#a7 ,in general ,clause 7iii7 of section #djh7;b77#b77;,b7 of such ,act 7#bi ,u4,s4,c4 #aajh7;b77#b77;,b77 is amended by adding at the end the following3 7,,vii7 ,in the case of a covered service provider in a contract or arrangement with a covered plan to provide pharmacy benefit management services1 as part of the description required under subclauses 7,,iii7 and 7,,iv7-- 7aa7 all compensation described in clause 7ii77,i77dd77,,aa71 including fees1 rebates1 alternative discounts1 price concessions1 co-payment offsets1 and other remuneration reasonably expected to be received by the covered service provider1 an affiliate1 or a subcontractor from a drug manufacturer1 distributor1 rebate aggregator1 accumulator1 maximizer1 group purchasing organization1 or any other third party2 7bb7 the amount and form of any fees1 rebates1 alternative discounts1 price concessions1 co-payment offsets1 and other remuneration1 including the amount expected to be passed through to the plan sponsor or the participants and beneficiaries under the covered plan2 7cc7 all compensation reasonably expected to be received by the covered service provider1 an affiliate1 or a subcontractor as a result of paying a lower amount for the drug than the amount charged as a copayment1 coinsurance amount1 or deductible2 7dd7 all compensation expected to be received by the covered service provider1 an affiliate1 or a subcontractor as a result of paying pharmacies less than the amount charged to the health plan1 plan sponsor1 or participants and beneficiaries 7commonly referred to as spread pricing72 7ee7 all compensation expected to be received by the covered service provider1 an affiliate1 or a subcontractor from drug manufacturers or any other third party in exchange for-- 7,,aa7 administering1 invoicing1 allocating1 or collecting rebates related to the covered plan2 7,,bb7 providing access to drug utilization data2 7,,cc7 retaining a percentage of the list price of a drug2 or 7,,dd7 any other service related to the role of the covered service provider as a conduit between the drug manufacturers or any other third party and the covered plan4 4 7#b7 ,annual disclosure ,clause 7v7 of section #djh7;b77#b77;,b7 of such ,act 7#bi ,u4,s4,c4 #aajh7;b77#b77;,b77 is amended by adding at the end the following3 7,,iii7 ,a covered service provider1 with respect to a contract or arrangement with the covered plan in connection with providing pharmacy benefit management services1 shall disclose1 on an annual basis not later than #fj days after the beginning of each plan year1 to a responsible plan fiduciary1 in writing1 the following with respect to the preceding plan year3 7aa7 ,all direct compensation described in subclause 7,,iii7 of clause 7iii7 and indirect compensation described in subclause 7,,iv7 of clause 7iii7 received by the covered service provider 7including such compensation described in subclause 7,,vii7 of clause 7iii774 7bb7 ,the total gross spending by the covered plan on drugs 7excluding fees rebates1 alternative discounts1 price concessions1 co-payment offsets1 and other remuneration74 7cc7 ,the total net spending by the covered plan on drugs4 7dd7 ,the total gross spending on drugs at all pharmacies wholly or partially owned by the covered service provider or any entity affiliated with the covered service provider1 including mail-order1 specialty and retail pharmacies1 with a breakdown by individual pharmacy location4 7ee7 ,the aggregate amount of cost-sharing collected by the covered service provider from a pharmacy for a participant or beneficiary in excess of the contracted rate from such pharmacies1 including mail-order1 specialty1 and retail pharmacies1 including-- 7,,aa7 categorical explanations 7grouped by the reason for collection of such amounts1 such as contractual true-up provisions1 overpayments1 or non-covered medication dispensed1 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 plan72 or 7,,bb7 individual explanations for such amounts4 7ff7 ,total aggregate amounts of fees collected by the covered service provider1 an affiliate1 or a subcontractor in connection with the provision of pharmacy benefit management services to the covered plan1 broken down by the source of such fees 7such as the covered plan1 participants and beneficiaries of the covered plan1 any drug manufacturer or wholesaler1 or any pharmacy entity74 7gg7 ,any information specified by the ,secretary through regulations or guidance that may be necessary for a responsible plan fiduciary to determine the reasonableness of the contract or arrangement with the covered service provider1 any compensation paid under such a contract or arrangement1 or any conflicts of interest that may exist4 4 7#c7 ,pharmacy benefit management services defined ,clause 7ii77,i7 of section #djh7;b77#b77;,b7 of such ,act 7#bi ,u4,s4,c4 #aajh7;b77#b77;,b77 is amended by adding at the end the following3 7gg7 ,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 plan1 including-- 7,,aa7 the processing and payment of claims2 7,,bb7 design of pharmacy networks2 7,,cc7 negotiation1 aggregation1 and distribution of rebates1 discounts1 and other price concessions2 7,,dd7 formulary design and maintenance2 7,,ee7 operation of pharmacies 7whether retail1 mail order1 specialty drug1 or otherwise72 recordkeeping2 7,,ff7 utilization review2 7,,gg7 adjudication of claims2 and 7,,hh7 any other services specified by the ,secretary through guidance or rulemaking4 4 7c7 ,specific disclosure requirements with respect to third party administration services for group health plans 7#a7 ,in general ,clause 7iii7 of section #djh7;b77#b77;,b7 of such ,act 7#bi ,u4,s4,c4 #aajh7;b77#b77;,b771 as amended by subsection 7b77#a71 is further amended by adding at the end the following3 7,,viii7 ,with respect to a contract or arrangement with the covered plan in connection with the provision of third party administration services for group health plans1 as part of the description required under subclauses 7,,iii7 and 7,,iv7-- 7aa7 the amount and form of any rebates1 discounts1 savings fees1 refunds1 or amounts received from providers and facilities1 including the amounts that will be retained by the covered service provider2 7bb7 the amount and form of fees expected to be received from other service providers in relation to the covered plan1 including the amounts that will be retained by the covered service provider as a fee1 to the extent feasible2 and 7cc7 the amount and form of expected recoveries by the covered service provider1 including the amounts that will be retained by the covered service provider 7disaggregated by category71 as a result of-- 7,,aa7 overpayments2 7,,bb7 erroneous payments2 7,,cc7 uncashed checks or incomplete payments2 7,,dd7 billing errors2 7,,ee7 subrogation2 7,,ff7 fraud2 or 7,,gg7 any other reason on behalf of the covered plan4 4 7#b7 ,annual disclosure ,clause 7v7 of section #djh7;b77#b77;,b7 of such ,act 7#bi ,u4,s4,c4 #aajh7;b77#b77;,b771 as amended by subsection 7b77#b71 is amended by adding at the end the following3 7,,iv7 ,a covered service provider1 with respect to a contract or arrangement with the covered plan in connection with providing third party administration services for group health plans1 shall disclose1 on an annual basis not later than #fj days after the beginning of each plan year1 to a responsible plan fiduciary1 in writing1 the following with respect to the preceding plan year3 7aa7 ,all direct compensation described in subclause 7,,iii7 of clause 7iii74 7bb7 ,all indirect compensation described in subclause 7,,iv7 of clause 7iii7 received by the covered service provider1 an affiliate1 or a subcontractor 7including such compensation described in subclause 7,,viii7 of clause 7iii774 7cc7 ,the aggregate amount for which the covered service provider1 an affiliate1 or a subcontractor received indirect compensation and the estimated amount of cost-sharing incurred by plan participants and beneficiaries as a result4 7dd7 ,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 7not including any amounts described in items 7aa7 through 7cc7 of clause 7iii77,,viii774 7ee7 ,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 provider4 7ff7 ,the aggregate fees collected by the covered service provider1 an affiliate1 or a subcontractor from any source4 7gg7 ,any other information specified by the ,secretary through regulations or guidance that may be necessary for a responsible plan fiduciary to determine the reasonableness of the contract or arrangement with the covered service provider any compensation paid under such a contractor or arrangement1 or any conflicts of interest that may exist4 4 7#c7 ,third party administration services for group health plans defined ,clause 7ii77,i7 of section #djh7;b77#b77;,b7 of such ,act 7#bi ,u4,s4,c4 #aajh7;b77#b77;,b771 as amended by subsection 7b77#c71 is amended by adding at the end the following3 7hh7 ,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 plan1 including-- 7,,aa7 the processing1 repricing1 and payment of claims2 7,,bb7 design1 creation1 and maintenance of provider networks2 7,,cc7 negotiation of discounts off gross rates2 7,,dd7 benefit and plan design2 negotiation of payment rates2 7,,ee7 recordkeeping2 7,,ff7 utilization review2 7,,gg7 adjudication of claims2 7,,hh7 regulatory compliance2 and 7,,ii7 any other services set forth in an administrative services agreement or similar agreement or specified by the ,secretary through guidance or rulemaking4 4 7d7 ,privacy requirements ,section #djh7;b77#b7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajh7;b77#b771 as amended by subsection 7c71 is further amended by adding at the end the following3 7,c7 ,privacy requirements ,covered service providers shall provide information under subparagraph 7,b7 in a manner consistent with the privacy regulations promulgated under section #acdjb7;a7 of the ,health ,information ,technology for ,clinical ,health ,act 7#db ,u4,s4,c4 #agicb7;a771 and consistent with the privacy regulations promulgated under the ,health ,insurance ,portability and ,accountability ,act of #aiif in part #afj and subparts ,a and ,e of part #afd of title #de1 ,code of ,federal ,regulations 7or successor regulations7 and shall restrict the use and disclosure of such information according to such privacy1 security1 and breach notification regulations and such privacy regulations4 7,d7 ,disclosure and redisclosure 7i7 ,limitation to business associates ,a responsible plan fiduciary receiving information disclosed under subparagraph 7,b7 may disclose such information only to the entity from which the information was received1 the group health plan to which the information pertains1 or to that entity's business associates as defined in section #afj4ajc of title #de1 ,code of ,federal ,regulations 7or successor regulations7 or as permitted by the ,,hipaa ,privacy ,rule 7parts #afj and #afd1 subparts ,a and ,e of title #de1 ,code of ,federal ,regulations74 7ii7 ,clarification regarding public disclosure of information ,nothing in this section shall prevent a group health plan or health insurance issuer offering group health insurance coverage1 or a covered service provider1 from placing reasonable restrictions on the public disclosure of the information described in this subparagraph1 except that such plan1 issuer1 or entity may not restrict disclosure of such information to the ,department of ,labor4 7,e7 ,additional privacy requirements 7i7 ,in general ,covered service providers shall ensure that information provided under subparagraph 7,b7 contains only summary health information1 as defined in section #afd4ejd7;a7 of title #de1 ,code of ,federal ,regulations 7or successor regulations74 7ii7 ,restrictions ,a group health plan shall comply with section #afd4ejd7;f7 of title #de1 ,code of ,federal ,regulations 7or successor regulations7 with respect to any information received by the plan or disclosed to a plan sponsor or any other entity pursuant to this section1 and a responsible plan administrator who is a plan sponsor shall act in accordance with the terms of the agreement described in such section4 7,f7 ,rule of construction ,nothing in this section shall be construed to modify the requirements for the creation1 receipt1 maintenance1 or transmission of protected health information under the privacy regulations promulgated under the ,health ,insurance ,portability and ,accountability ,act of #aiif in part #afj and subparts ,a and ,e of part #afd of title #de1 ,code of ,federal ,regulations 7or successor regulations74 4 7e7 ,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 law4 7f7 ,effective date ,the amendments made by this subsection shall not apply to any contract or arrangement entered into prior to ,january #a1 #bjbf4 ,such amendments shall apply to any contract or arrangement entered into on or after to such date1 including any extension or renewal of a contract or arrangement1 regardless of the date on which the original contract or agreement 7or any previous extension or renewal7 was entered into4 #d4 ,implementation ,not later than #a year after the date of enactment of this ,act1 the ,secretary of ,labor shall issue notice and comment rulemaking as necessary to implement the provisions of this ,act4 ,the ,secretary shall ensure that such rulemaking-- 7#a7 accounts for the varied compensation practices of covered service providers 7as defined under section #djh7;b77#b77;,b72 and 7#b7 establishes standards for the disclosure of expected compensation by such covered service providers4