As states across the US begin to cautiously look towards re-opening and many hospitals’ ICU capacities level out and elective surgeries resume, the wheels of progress keep turning. This month, we look at what the federal government is doing to help hospitals cover the cost of uninsured COVID patients, the Paycheck Protection Program and Healthcare Enhancement Act, and the recently proposed HEROES bill.
CMS’ 340B acquisition cost survey – here and gone in the blink of an eye
Last month, we reported on April 22 that there had been no forward momentum regarding the CMS survey that would collect information from covered entities on the acquisition costs of 340B drugs.
However, on April 23, CMS got approval for the survey from the Office of Management and Budget and distributed it to hospitals the very next day, giving covered entities until May 15 (three weeks) to respond.
In early May, 340B Health sent a letter to CMS calling for a retraction of the survey, writing, “Now is not the time to distract hospitals’ attention from the vital job at hand to complete a CMS survey on drug acquisition costs.”
Despite the concerns from 340B Health and covered entities about the poor timing of the survey, CMS persisted, and the survey is now closed.
Paycheck Protection Program and Health Care Enhancement Act
The latest COVID-19 relief bill, the Paycheck Protection Program and Health Care Enhancement Act, was signed into law on April 24. According to a summary of the bill from the American Medical Association, “The bill provides $484 billion in additional funding to replenish and supplement key programs under the CARES Act, including the Paycheck Protection Program (PPP), small business disaster loans and grants, hospitals and health care providers and testing.”
COVID funding for uninsured patients
Under this new bill, hospitals will be reimbursed for the costs associated with COVID-19 testing and treatment at standard Medicare rates.
“Health care providers who have conducted COVID-19 testing or provided treatment for uninsured COVID-19 individuals on or after February 4, 2020 can request claims reimbursement through the program electronically and will be reimbursed generally at Medicare rates, subject to available funding,” according to HRSA’s website.
This policy is particularly important for hospitals participating in the 340B program, as they serve a disproportionate amount of the nation’s uninsured.
Allocation for rural providers
Additionally, $10 billion of the new funds “will be allocated for rural health clinics and hospitals, most of which operate on especially thin margins and are far less likely to be profitable than their urban counterparts,” according to HHS. “This money will be distributed … on the basis of operating expenses, using a methodology that distributes payments proportionately to each facility and clinic. This method recognizes the precarious financial position of many rural hospitals, a significant number of which are unprofitable.”
Sentry applauds the government’s focus on hospitals that treat the uninsured and rural providers and recognizes the positive impact this move will have on covered entities and their patients.
HHS authorizes pharmacists to administer COVID-19 tests
HHS’ Office of the Assistant Secretary for Health (OASH) issued a guidance allowing licensed pharmacists to order and administer FDA-approved COVID-19 tests. The guidance was issued under the Public Readiness and Emergency Preparedness Act by the Office of the Assistant Secretary for Health, Brett Giroir.
“Giving pharmacists the authorization to order and administer COVID-19 tests to their patients means easier access to testing for Americans who need it. Pharmacists play a vital role in delivering convenient access to important public health services and information,” said HHS secretary Alex Azar. “The Trump administration is pleased to give pharmacists the chance to play a bigger role in the COVID-19 response, alongside all of America’s heroic healthcare workers.”
Will COVID-19 affect 340B program eligibility?
Hospitals and lawmakers alike continue to have concerns that the shifting patient populations due to COVID-19 could affect covered entities’ eligibility for the 340B program. Essentially, hospitals must treat a disproportionate number or share of vulnerable patients (Medicaid and Medicare) in order to stay enrolled in the program. However, many hospitals have been designated COVID hospitals by their city or state and are therefore currently treating more patients with commercial insurance, or patients who have recent lost jobs and no longer have commercial insurance but do not qualify at this time for Medicare or Medicaid. This imbalance of patients may impact hospitals’ disproportionate share (DSH) calculation, and therefore impact 340B eligibility.
As we reported last month, U.S. Senator Ben Sasse attempted to address this issue at a state level in Nebraska with the introduction of an amendment to relief legislation that would help Nebraska’s health care providers combat coronavirus. His proposed amendment would ensure that covered entities 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 public health emergency. The bill was introduced on May 6 and referred to the Senate Finance Committee.
Echoing Sasse’s concerns, Reps. Doris Matsui, D-California, and Chris Stewart, R-Utah, wrote a letter to House leadership on April 28 “outlining concerns that hospitals will be cut off from the program because they have to expand capacity to fight COVID-19,” FierceHealthcare reports.
“To support our safety net hospitals through this crisis, we write to ask that any future supplemental relief bill include policies to temporarily protect these hospitals from losing 340B eligibility,” the letter said.
As of the time of this publication, there has been no response from the government regarding this concern.
HEROES Act offers more potential COVID-19 relief
On May 15, the House passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act (H.R. 6800). “The HEROES Act was introduced earlier this week by House Democratic Leadership in an effort to start negotiations on the next relief effort to the COVID-19 pandemic,” according to The National Law Review. “The HEROES Act is primarily intended as a statement of priorities for House Democrats in upcoming negotiations with the Senate and the White House on the next iteration of COVID-19 relief legislation. The Republican-led Senate is not expected to consider the bill.”
If passed, the HEROES Act “would provide over $3 trillion in federal relief and institute new programs to combat COVID-19,” greatly expanding funding under the CARES Act and the Paycheck Protection Program and Health Care Enhancement Act, The National Law Review says.
Notably, the bill does not address – or even mention – the 340B eligibility concerns raised in the letter from Matsui and Stewart.
As of the time of this publication, it was not expected that the bill would reach the Senate before the Memorial Day recess (if at all).
Summer is around the corner
As the industry continues to make slow and steady progress in the battle against COVID-19 and the search for treatments and vaccines, summer isn’t far away. Usually, for Sentry, that means full speed ahead in planning for the 340B Coalition Summer Conference. 340B Coalition recently announced that this year’s event, originally scheduled to take place in Washington, D.C., from July 20-22, will become a virtual event held over five days between July 20-29.
While we regret the missed opportunity to gather with colleagues, customers and peers for this important event, Sentry applauds the decision to put the health and safety of the nation’s healthcare professionals first. Stay tuned for more from us in the coming weeks about how we plan to engage virtually and continue to represent the best interest of covered entities as well all adjust to this “new normal.”