Committee debates H.266 language to cap hospital outpatient drug charges at 120% of ASP and preserve white-bagging ban

The House Committee on Health Care on Thursday, May 15, discussed an amendment to H.266 that would limit what hospitals may bill insurers for outpatient prescription drugs administered in outpatient or office settings by capping reimbursement at 120% of the Centers for Medicare & Medicaid Services’ (CMS) average sales price (ASP) for each drug, with critical access hospitals exempted.

The amendment language under consideration would (1) cap charges for drugs that hospitals charged at more than 120% of ASP as of April 1, 2025, to a maximum of 120% of the most recent quarterly CMS ASP going forward; (2) prevent hospitals from increasing the percentage of ASP charged for drugs that were at or below 120% as of April 1; and (3) bar hospitals from balance-billing patients or increasing other hospital charges to offset reductions in drug revenue. The bill would not apply to hospitals designated as critical access hospitals.

The proposal was introduced alongside data from Blue Cross Blue Shield of Vermont. Sarah (Analyst, Blue Cross Blue Shield of Vermont) presented claims-based estimates showing wide variation in hospital markups for several expensive outpatient drugs and an estimated $46 million in annual savings to Blue Cross members if hospitals were capped at 120% of ASP. She cautioned that the data cover Blue Cross claims only,…