20200422 April 340Buzz - April 340Buzz: On the front lines – covered entities and COVID-19

April 340Buzz: On the front lines – covered entities and COVID-19

In the past several weeks, COVID-19 has affected us all personally and professionally in ways we never expected. Some of the changes that have taken place have had a profound effect on covered entities, including drug shortages, 340B enrollment timelines and processes, legislative disruption and more. This month we take a look at how COVID-19 has impacted hospitals that participate in the 340B program – and the patients they serve.

CMS’ 340B acquisition cost survey never materializes

As we’ve discussed previously, CMS has been working on a survey that would collect information from covered entities on the acquisition costs of 340B drugs. When we published last month’s 340Buzz on March 18, the survey was under review by the Office of Management and Budget (OMB). If OMB approved the survey, CMS planned to distribute it to covered entities on March 23 and then close the data collection period on April 10.

With COVID-19 now taking center stage for the industry, there has been no update on the status of the survey from OMB, and it has not been released. Sentry will continue to keep an ear to the ground and report developments as they occur, but for now, we urge covered entities not to send this acquisition cost information to CMS until and unless it is required.

HRSA creates 340B COVID-19 resource center, case-by-case 340B enrollment for new sites

On March 20, HRSA published a COVID-19 Resources web page for covered entities. Key takeaways include:

  • Regarding audits – “Based on the current COVID-19 pandemic, HRSA is moving towards conducting 340B Program covered entity audits remotely (virtually) for the next several months while we monitor and assess the impact on the covered entities.”
  • Regarding health records – “During this time, an abbreviated health record may be adequate for purposes of the 340B Program. The record should identify the patient, record the medical evaluation (including any testing, diagnosis or clinical impressions) and the treatment provided or prescribed. In the current public health emergency, HRSA believes that self-reporting of identity, condition, and history are adequate for purposes of 340B recordkeeping requirements.”
  • Regarding patient definition – “At this time, HRSA is unable to waive 340B statutory requirements, specifically the provision related to reselling or otherwise transfer the drug to a person who is not a patient of the entity, pursuant to section 340B(a)(5)(B) of the Public Health Service Act.”
  • Regarding 340B program enrollment for new sites: As treatment locations and temporary hospitals spring up at conference centers, universities, and other non-traditional locations, covered entities have had questions about 340B program eligibility for those sites. The HRSA COVID-19 web page notes: “To the extent a covered entity has a specific concern about 340B eligibility of a new site, the covered entity should contact the 340B Prime Vendor Program (1-888-340-2787 or apexusanswers@340bpvp.com) and we will evaluate each circumstance on a case-by-case basis.”

Many in the industry had hoped that HRSA would allow for more of a blanket 340B enrollment policy (beyond the most recent enrollment period, which ran from April 1-15) for these new sites as they relate to hospitals already in the 340B program, as they have done in the past for natural disasters and other emergencies, but that is not the case as of the time of this publication.

CARES Act could help covered entities

On March 27, the President signed the into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion economic relief package aimed at protecting the American people from the public health and economic impacts of COVID-19. Among the provisions of the CARES Act, two particular points may help covered entities:

Most directly, the stimulus package included $100 billion for the Public Health and Social Services Emergency Fund. “This new funding is designed to provide an influx of money to hospitals and other health care entities responding to the coronavirus pandemic,” as Kaiser Health News reports.

On April 3, the administration announced that part of that $100 billion would be used “for hospitals and health care providers to reimburse providers treating uninsured COVID-19 patients,” as the American Hospital Association reported. While these funds are intended for all hospitals, the good news is that because covered entities serve a large proportion of uninsured patients, a significant portion of the money will be used to help covered entities handle the influx of patients coming in. On the other hand, hospitals have concerns over the manner in which those funds were distributed, in terms of Medicare only versus Medicaid or uninsured populations.

Secondly, the CARES Act also includes several small business provisions. Because many smaller 340B hospitals such as CAHs and rural clinics qualify as small businesses, some of these provisions may benefit covered entities as well.

CMS Administrator Seema Verma told reporters on a call April 15 that more details on the next wave of hospital funding will be coming this week. She said there will be a specific fund for providers in hot spots hit hard by COVID-19, reports FierceHealthcare.

State legislation and 340B

As the nation copes with the day-to-day realities of COVID-19, states continue to try influencing the 340B program – for better or for worse – at a more local level.

Nebraska – On March 24, U.S. Senator Ben Sasse, a member of the Senate Finance Subcommittee on Health Care, has introduced two amendments to relief legislation that would help Nebraska’s health care providers combat coronavirus. According to a press release from the Senator’s office, those amendments are:

  • Amendment 1: Medicare Skilled Nursing Facility Prospective Payment System Adjustment for COVID-19 Residents During the Emergency Period. This amendment would temporarily create a 15% bump in Medicare fee-for-service payments for nursing homes to reflect their high-need populations.
  • Amendment 2: Pause Eligibility Determinations Under the 340B Drug Pricing Program. This amendment would ensure that our hospitals that serve the most at-risk populations continue to qualify for the 340B drug discount program for FY2020 and FY2021 in light of the ongoing crisis. This means that they would keep receiving prescription drugs at a discounted rate from pharmaceutical companies, freeing up resources to serve patients.

Utah – Utah has become the sixth state to enact a law prohibiting pharmacy benefit managers (PBMs) from paying 340B providers differently from non-340B providers for the same medications based on their participation in the program. The bill (S.B. 138), signed into law March 28, makes numerous changes to PBM policies in the state. Notably, it includes provisions that prohibit a PBM from varying the amount it reimburses a pharmacy for a drug based on whether it is a 340B drug or the pharmacy is a 340B entity.

New York – While trying to balance a budget, the governor of New York turned to 340B; his FY 2021 budget says, “For drugs that would otherwise be eligible for pricing under Section 340B, the department shall examine all reasonably available methods for determining actual acquisition cost and the professional dispensing fee, beginning April 1, 2021, review and adjust reimbursement for such drugs … Reimbursement will be determined based on a method that the commissioner determines utilizes the actual acquisition costs and professional dispensing fee, no earlier than April 1, 2023.”

As a next step, the NY Health Commissioner will create an advisory group composed of stakeholders to provide non-binding recommendations to the NY Department of Health by October 1, 2020.

A light at the end of the tunnel … and another tunnel lies ahead

As we finish out April, many states, including the hardest-hit state of New York, are starting to see evidence that they’re succeeding in “flattening the curve,” with hopes of a phased approach to reopen businesses as the war on COVID-19 continues.  We’re seeing fewer new hospitalizations, fewer intubations, and more recoveries every day. On the other hand, we continue to see drug shortages and the next challenge ahead – chronic care management for those not receiving services because of the virus, and concerns of increased risk for those with comorbidities.

Hospitals and community health centers will begin to gear back up for the backlog of primary care needs, postponed surgeries, and chemotherapy demands that have all been delayed. Pharmaceutical companies are working hard at kicking off clinical trials for both therapies and vaccines. There’s still a long road ahead, and Sentry supports all the covered entities and healthcare workers who are on the front lines as we face this unprecedented public health crisis together. Meanwhile, our sister company Agilum will continue to share real-time, real-world data on treatment protocols and outcomes as the industry learns from this evidence as studies are conducted. We believe we can overcome this pandemic together.