Last July, President Biden issued Executive Order 14036 to promote competition (and eliminate anti-competitive practices) across a number of industries, including health care, with the hopes of lowering prices, increasing growth and wages, and promoting innovation. The order includes 72 initiatives, including four specifically focused on health care.

In this post, we explore what has happened since the executive order was issued and what’s expected to happen next in relation to the health care initiatives.

Lowering prescription drug costs

Two months after the executive order was issued, the Department of Health and Human Services (HHS) released, “A Comprehensive Plan for Addressing High Drug Prices.” A recent Congressional Budget Office report on prescription drug costs and spending indicate cost increases are slowing but that’s only after seeing spending increase from $30 million in 1980 to $335 million in 2018.

In 2021, 20 states enacted 43 laws to lower costs that included establishing Prescription Drug Affordability Boards (PDABs); regulating Pharmacy Benefit Managers (PBMs); limiting out-of-pocket  insulin costs; and promoting cost transparency. According to the National Conference of State Legislators Bill Tracking Database, New York State introduced 69 bills related to lowering prescription drug costs last year; another 20 have been introduced since the start of this year.

Allow hearing aids to be sold at drug stores

The Food and Drug Administration (FDA) proposed a rule creating a category of hearing aids that could be sold over-the-counter at drug stores without a prescription. The rule was up for public comment during a 90-day period ending January 18 of this year.  According to Harvard Health, approval is expected some time this year and manufacturers are already moving ahead with production that will give consumers access to a $600 on-average device (versus the $5,000 average at a doctor’s office).

Still, 42 states are asking that as part of the rule the FDA preserves related state consumer protection laws. At the same time, the Federal Trade Commission  indicates that, in part, some of those laws hurt competition and access to affordable hearing aids. Several governors are asking that the FDA finalize the rule without delay. 

Stop the negative impacts of healthcare industry consolidation

The Justice Department and Federal Trade Commission (FTC) are encouraged to review merger guidelines to ensure patients are not harmed by hospital mergers, which have traditionally driven up prices and left rural areas without adequate access to care. As a first step, the FTC restored a policy where it could restrict two merging parties from moving forward if it would have anti-competitive impacts on the community. Courts seem to align with this position. However, the American Hospital Association disagrees, asserting current practices actually boost competition and help the economy. Also, a study by the American Medical Association shows mergers actually result in better patient outcomes – something the medical community asserts the political establishment is ignoring.  The FTC is currently soliciting public comments on the issue. So, stay tuned.

Address surprise bills from hospitals

Even before President Biden’s executive order, actions were underway to promote hospital price transparency and eliminate surprise bills for care. This past January 1, new rules took effect under the No Surprises Act requiring uninsured patients receive good faith estimates for the cost of care and insured patients don’t receive surprise bills for emergency care and treatment by an out-of-network provider at an in-network facility.

What’s more, with the Consolidated Appropriations Act of 2021, health plans and health plan issuers are required to track and submit certain prescription drug and health care costs starting December of 2022 (for 2020 and 2021 data) and every June thereafter to help promote price transparency.

Going forward

For decades, addressing escalating health care costs in the U.S. has been the focus of legislation, corporate board rooms, and individuals, and it looks like it’s going to remain a hot topic with both the FTC and the HHS identifying actions related to Executive Order 14036 a priority for 2022.

We’ll keep you updated as the story continues to unfold. In the meantime, RBT CPAs does have staff specializing in accounting and taxes for health care. Should you need advice or assistance, please give us a call.

NOTE: RBT CPAs is an accounting and tax firm – not a law firm. In no way should information in this article be construed as legal advice or direction. For that type of assistance, we encourage you to contact your legal advisor.