Senate Committee Advances Bill on Mental Health, PBMs, and ‘Ghost Provider’ Networks

Easing Medicare physician payment cuts, cracking down on “ghost provider” networks, and reforming pharmacy benefit manager (PBM) practices were all included in a measure passed Wednesday by the Senate Finance Committee.

“With this package, the committee will tackle unfinished business, working to guarantee that Americans everywhere can get the mental healthcare they need when they need it,” committee chairman Sen. Ron Wyden (D-Ore.) said in his opening statement. At town meetings in his state, “I continue to hear firsthand just how badly people – and in particular young people – are struggling, and they are not alone.”

“One-third of Americans have suffered or have a family member who has suffered a mental health crisis,” he continued. “Yet, the U.S. surgeon general, Dr. Vivek Murthy, testified in this committee that Americans experience an 11-year gap between the time they first experience symptoms of a mental health condition and when they finally get treatment.”

Among the provisions included in the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act were:

• A provision to replace the statutory increase of 1.25% for Medicare physician fee schedule services furnished in 2024 with 2.50% for that year
• A provision to extend eligibility for bonuses under the Health Professional Shortage Area program to certain mental health and substance use disorder services provided by non-physician healthcare professionals, including physician assistants, nurse practitioners, clinical social workers, and mental health counselors
• A provision to require the HHS secretary to provide information on licensure requirements for furnishing telehealth services under Medicare and Medicaid, including guidance on clinicians who are providing care via telehealth to patients in neighboring states. “This is basically bringing services into the 21st century, because we all know that if you crossed over just a little ways into another state, you ought to be able to work something out in order to get some services, and this bill is going to help do that,” Wyden said.
• A provision requiring each network-based Medicare Advantage (MA) plan to verify provider directory information at least every 90 days; the HHS Secretary could allow plans to verify hospital and other facility information less frequently than 90 days, as long as that information is verified at least annually. MA plans would be required to note in the directory providers whose information could not be verified and to remove providers listed in a directory within 5 business days if the organization determines the provider is no longer participating in the network.
• A provision requiring that, beginning in 2028, a Medicare Part D plan sponsor offering preferred pharmacy networks would be required to contract with at least 80% of essential retail pharmacies in the plan’s service area that are independent community pharmacies, and 50% of essential retail pharmacies in the plan’s service area that are not independent community pharmacies. Another provision would require that Part D plans base enrollee drug copays on the drug’s net price — including projected manufacturer rebates — rather than their Part D negotiated price.
• A provision for a 1.75% Alternative Payment Model (APM) Incentive Payment for qualifying APM participants for payment year 2026 (based on performance year 2024). This payment is half of the 3.5% incentive payment that these models are getting this year. Committee member Sen. Ben Cardin (D-Md.) said he was disappointed that the payment was being cut. “My home state of Maryland has one of the highest rates of physicians participating in value-based care,” he said. “If we do not correct this cut, more than 5,000 Maryland providers will lose resources to continue providing innovative care models to their constituents. So I’m disappointed, and I hope we can find a way to advance that.” Wyden responded that “We tried to get as much money for the alternative payment programs as we could, and we’ll be back in the next Congress.”

The vote to pass the measure — whose provisions were almost entirely bipartisan — was 26-0, with one senator, Ron Johnson (R-Wisc.), not voting. Johnson expressed concerns about the process. “I am new to the committee,” Johnson said. “Maybe this is a different way of doing business. But we got the ‘Chairman’s Mark’ Monday morning, and we got an update to it yesterday. Again, it’s very, it’s very detailed, but it’s not legislative language.”

Johnson also objected to the PBM provisions in the bill, noting that “PBMs were initially the solution that was going to lower drug costs” by leveraging their market power to negotiate discounts from drug companies. “I think the proof is in the pudding that to some extent they’re working because Big Pharma is all for the PBM reforms we’re pushing … I’ve got real doubts about what this committee is trying to do in terms of PBM reforms. I don’t know how else you’re going to start renegotiating power into drug pricing until we actually introduce real consumerism, which we’re not doing.”

Sen. John Thune (R-S.D.) called for Congress to do more to reform the Medicare Physician Fee Schedule. “Instead of Congress making payment adjustments every year, it’s time we address the underlying issues and make long-term reforms to the Physician fee schedule to ensure there is stability for physicians and the Medicare program for the future,” he said. “reforms to the fee schedule should be coupled with updates to incentivize quality.”

“Congress needs to also make long-term reforms to encourage a greater move toward value-based care,” said Thune, who was one of the cosponsors of the APM payment provision. He asked Wyden and ranking member Sen. Mike Crapo (R-Idaho) if they would “commit to work with me and my colleagues to pass long-term reforms to the Physician Fee Schedule and incentivize value-based care?”

Wyden responded affirmatively. “You’ve got to get at this long term,” he said. “Doctors are the backbone of the system. In other words, we can fuss all we want about various things, but you’ve got to have doctors, and absolutely we’re going to work very closely with you.”

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