H.R. 7895 and PBM compensation to brokers

HR 7895 passed the House Education and Workforce Committee last week 34-0. It would prohibit PBMs from paying brokers, consultants, or advisors any compensation tied to placing PBM business.

Yet another half measure.

The last was the CAA disclosure rule. Instead of requiring service providers to proactively disclose their compensation, Congress put the burden on plan sponsors to go ask. Predictable result: spotty compliance, uneven enforcement, and a lot of employers who still don’t know what their broker earns on their account.

Now we get HR 7895. Same pattern. Instead of going after the vertical integration driving drug costs higher, Congress is going after broker comp.

There’s a school of thought that commissions are inherently corrupt and that fee-only is the only ethical model. I respect the people who hold that view. I disagree with the framing.

Commission and fee are both payment structures. Either one can be aligned or misaligned with the plan’s interests. Commissions can rise with costs. A fee-only consultant who recommends the same vendor on every engagement has a conflict too. It’s just less visible because the dollars don’t trace to a carrier.

The question isn’t just how the consultant gets paid. It’s whether the plan sponsor can see the fee, evaluate the alignment, and document the call. That’s a disclosure problem, and we already have a disclosure law. Enforce it.

We already ran this experiment. Last year Centene pulled commissions on stand-alone Part D plans. Aetna, Cigna, Humana, Elevance, and United followed on some PDP and MA products. What happened? Brokers stopped writing those plans, and seniors lost access to independent help on the most complex product they buy all year. The work didn’t migrate to fee-only advisors. Seniors went without advice, took what the carrier put in front of them, or got channeled to a call center.

Take the commission channel away on the employer side and the mid-market plays out the same way. Self-funded employers big enough to carve out a PBM but not big enough to write a six-figure flat fee every cycle lose access first. The PBMs the bill is supposed to discipline sell directly to employers who now have nobody between them and the contract.

The real cost driver isn’t the broker fee. It’s list price inflation negotiated to drive bigger rebates. It’s formulary placement sold to manufacturers. It’s spread pricing on generics. It’s a supply chain where the same parent company owns the PBM, the specialty pharmacy, the mail order pharmacy, the GPO, the PSAO, and the insurer. None of that changes if every broker in the country works fee-only tomorrow.

We keep getting bills that aim at the edges. Disclosure nobody has to give. Prohibitions on the smallest dollars in the chain. Meanwhile the vertical integration that actually drives the cost of a prescription sits untouched.

We’ve spent a decade arguing about how brokers get paid. When does the conversation move to the rebate stack?