20191022 October 340Buzz - October 340Buzz: The gears of progress are turning

October 340Buzz: The gears of progress are turning

After a summer filled with a lot of waiting to see what would happen next on many issues affecting the 340B program, the slow gears of government seemed to start turning all at once toward the end of September. Last month, a government shutdown was averted with only four days to spare and House Speaker Nancy Pelosi unveiled a new proposal to lower drug prices.

This month, we reflect further on how Pelosi’s plan could negatively impact covered entities, explore industry reactions to OPPS policies that would expand site-neutral payments to grandfathered hospital outpatient provider-based departments, and dig into CMS’ plan to collect information from covered entities about the prices they pay for eligible drugs.

Will Pelosi plan impact 340B?

On October 1, Sentry published a special report about a new proposal unveiled September 19 by House Speaker Nancy Pelosi, the “Lower Drugs Costs Now Act” (H.R.3), which aims to bring down drug prices by allowing Medicare to negotiate prices on certain high-cost drugs and capping out-of-pocket costs for Medicare beneficiaries.

It quickly came to light that there was language in the bill that could negatively impact covered entities who take part in the 340B program.

“Currently, the legislative text says that for each year a negotiated price is applied, the drug shall ‘not be considered a covered outpatient drug subject to an agreement under 340B,’” FierceHealthcare reports.

As Becker’s Hospital Review explains, “Ms. Pelosi’s provision would likely prevent hospitals from making money off the drugs because they would no longer be able to buy them at a cheaper price and be reimbursed at a higher rate to make a profit. Instead, providers currently participating in 340B would get the same negotiated price and reimbursement amount as non-participating providers.”

The House Energy and Commerce Committee passed the bill on October 17, amending it to remove the provision that would have impacted 340B entities. Rep. Doris Matsui’s (D – Calif.) remarks to the committee demonstrated her commitment to safety-net hospitals and the patients they serve. Rep. Michael Burgess (R – Texas) introduced additional amendments that could be harmful to 340B, which the committee voted against.

The legislation will need to move through other committees before it can go to the full House floor for a vote. It will be important for covered entities to continue to watch H.R.3 as it progresses through the various committees.

AHA pushes back on OPPS ruling

In a letter to CMS Administrator Seema Verma on Sept. 27, the American Hospital Association “demanded CMS abandon the OPPS policies that would expand site-neutral payments to grandfathered hospital outpatient provider-based departments (HOPDs) and reduce reimbursement to hospitals qualifying for prescription drug discounts under the 340B Drug Pricing Program,” according to an article from RevCycle Intelligence.

Last month, a federal judge ruled that CMS exceeded its authority by extending site-neutral payments in 2019 to grandfathered HOPDs for certain clinic visits.

“In light of the judge’s ruling, AHA called on CMS to restore the higher payment rates for clinic visits furnished at HOPDs rather than phase in site-neutral payments in 2020 as proposed in the OPPS rule,” RevCycle Intelligence reports. “The association also urged the agency to repay hospitals the difference between the amounts they would have received if the site-neutral payment policy never took effect.”

CMS expects to finalize changes to the OPPS later this year.

CMS seeks comment on plan to collect pricing information

As we previously reported, On September 26, CMS issued a notice that it will collect information from covered entities about the prices they pay for eligible drugs.

“Although a federal judge tossed CMS’ planned 340B reimbursement cuts in December, the agency hopes that it will win an appeal and move forward with the changes,” an article from Modern Healthcare explained. “If that happens, CMS will need information on the actual prices that hospitals pay for drugs under the 340B program to calculate average sales prices and make the cuts.”

Now, CMS is seeking comments about its proposal to collect this pricing information. The comment period began September 30 and runs through November 29.

As America’s Essential Hospitals reports, if CMS does win the appeal and the planned collecting of pricing information does, therefore, take effect, “The new information collection request would take the form of a hospital survey for specific covered outpatient drugs. If CMS proceeds with its proposal to collect this data, hospitals enrolled in the 340B program in the last quarter of 2018 or the first quarter of 2019 must complete the survey between Feb. 17 and March 16, 2020.”

Holiday hiatus for Congress

With additional Congressional recesses on the horizon in October, November and December, there’s no way to tell how much progress will be made on these and other important healthcare issues before the end of the year. As is too often the case in healthcare, much remains to be seen and we don’t yet know what we don’t know.

Sentry will continue to keep an ear to the ground, serve as advocates for our covered entity customers and share any updates as they arise. Until next month, we remind you to get your flu shot, and we recognize American Pharmacists Month and thank all pharmacists and pharmacy technicians for the support they deliver to patients in their communities.