20181019 October 340Buzz - The 340Buzz: American Hospital Association leads the charge to preserve the 340B program

The 340Buzz: American Hospital Association leads the charge to preserve the 340B program

The American Hospital Association (AHA) has been very active in recent weeks, refiling old lawsuits, filing new lawsuits, and drafting principles for good stewardship for the 340B program, all in an effort to make sure safety net hospitals can still provide for vulnerable patients.

Lawsuits continue

On the legal front, the lawsuit that AHA and others had filed against HHS to reverse the 340B reimbursement cuts that went into effect at the beginning of this year—which was denied—was refiled on September 5. “In July, an appeals court delayed a ruling on the merits of the case because no claims had been filed when the case was originally brought to prevent the rule from going into effect,” AHA said in a statement. “Having filed claims that have progressed through the appeals process, the hospital plaintiffs have now addressed the court’s procedural concern, and with the hospital associations, have refiled the lawsuit asking for expedited relief.”

Additionally, as mentioned in last month’s 340Buzz, the AHA has filed an additional suit against HHS alleging that HHS violated the Administrative Procedures Act (APA) by delaying implementation of the Civil Monetary Penalties Regulation, which would penalize drug manufacturers for intentionally overcharging participating safety net hospitals for 340B drugs. The mandate for this regulation was created in 2010, through the 340B provisions of the Affordable Care Act. The pricing regulation has now been delayed a total of five times, most recently in June of this year. AHA and other groups (the plaintiffs) asked last month that the judge order HHS to make the final rule effective within 30 days.

On October 15, HHS “asked the judged to put the entire proceeding on hold, saying that they planned to issue a rule “that could moot this case or narrow the issues to be resolved,” reports HealthLeaders.

“HHS intends to issue a notice of proposed rulemaking by November 1, 2018, which will propose that the 340B Drug Pricing Rule take effect January 1, 2019, rather than July 1, 2019,” HHS wrote in the October 15 letter to the courts. “This is the earliest that the 340B Drug Pricing Rule could take effect as a practical matter. Implementing the 340B Pricing Rule by January 1 would effectively provide plaintiffs with all of the relief they have sought in their Complaint.”

On October 18, AHA responded. “If the stay is granted, there is a significant, and potentially high, risk that plaintiffs will receive none of the relief they seek,” they wrote. Defendants’ delay of the final 340B rule is arbitrary and capricious, an abuse of discretion, and is contrary to law … there is no assurance that Defendants will succeed in their goal of issuing a final rule with an effective date of January 1, 2019.” The courts had not responded as of the time of this publication.

AHA announces good stewardship program

On September 18, AHA leaders, in collaboration with individual hospitals participating in 340B, announced good stewardship principles. “The voluntary principles aim to improve transparency within drug-pricing programs and help hospitals improve communication about the effects of the program on their patients and the communities they serve,” Becker’s Hospital Review reports.

“To ensure good stewardship of the 340B program, hospitals participating in the program should structure hospital policies and practices to demonstrate their commitment,” AHA said in its release. “That demonstration of commitment includes sharing publicly how 340B savings are used to benefit the community, by, for example reaching more eligible patients and providing more comprehensive services for those in the community.”

The principles the AHA is calling for safety-net hospitals to embrace include:

  • Communicate the value of the 340B program
  • Disclose hospitals’ 340B estimated savings
  • Continue rigorous internal oversight

Hospitals can sign up to commit to these principles through the AHA website.

While the good stewardship program calls for voluntary disclosure of estimated 340B savings, Medicaid programs in Colorado and Mississippi have said this month that they will soon be requiring hospitals to report which medications they receive 340B discounts for,” reports Modern Healthcare. The requirement will take effect November 1.

“Currently, many states don’t know what hospitals are paying for drugs after rebates, which may inflate state government drug spending under Medicaid. The information would allow them to adjust reimbursements or determine which drugs weren’t discounted so the state can seek drugmaker rebates … At least 26 other states including California, Texas and Florida have drafted and submitted state plan amendments to the CMS that will allow them to better gauge which medications hospitals are purchasing under the 340B program and their acquisition costs,” Modern Healthcare notes.

Hospital CEOs speak out to Congress

On October 2, CEOs from more than 700 hospitals and health systems participating in the 340B drug pricing program signed a letter addressed to House and Senate leaders, urging Congress to protect the program.

“We are concerned about recent regulatory actions that have reduced the reach of this vital program and by legislative proposals that would undo more than two decades of bipartisan work to preserve the health care safety net,” the letter reads. “Efforts to reduce the scope of the 340B program would not reduce the cost of prescription drugs in the US and would weaken nonprofit hospitals’ ability to serve patients who often have nowhere else to turn.”

Sentry echoes the perspective expressed by the safety-net hospitals. We urge hospitals to continue speaking out and sharing their concerns with Congress, and to sign up and commit to the AHA good stewardship practices. It is only by continuing to have a voice and remain actively involved that we can make a difference in the future of the 340B program.