March 2018 340Buzz

The 340Buzz: Legal battle for the 340B Drug Pricing Program continues

Senate and House bill updates

In a previous edition of 340Buzz, we summarized the two House bills calling for oversight and/or reform of 340B in the works:

  • H.R. 4710: Introduced by Republican Rep. Larry Bucshon, H.R. 4710, the “340B Protecting Access for the Underserved and Safety-net Entities Act” (340B PAUSE Act), would implement a two-year moratorium on most new 340B hospital participants, including both hospitals new to 340B and new locations of existing hospital participants. The bill still sits with three cosponsors. (Peters, D-CA, Collins, R-NY, and Barton, R-TX). Opponents of the bill have actively protested in Peters’ district.
  • S-2312: Republican Rep. Bill Cassidy introduced the ‘‘Helping Ensure Low-income Patients have Access to Care and Treatment’’ or HELP Act. Much like the PAUSE Act, supporters of the bill are spinning it as a win for patients and a way to increase transparency in the 340B program, but because the Act would place a two-year moratorium on new, non-rural participants in the 340B program, it would actually be keeping patients from access to care and treatment. The bill still has no designated cosponsors.

In the interim since the last 340Buzz, yet another Senate bill has been introduced. On February 27, Republican Rep. Chuck Grassley introduced S. 2453, the “Ensuring Value of the 340B Program Act of 2018.” The bill would require hospital reporting of 340B aggregate acquisition costs of the hospital for drugs acquired during the period covered by a cost report, and the aggregate revenues the hospital received from all payers for 340B drugs, disaggregated by insurance status: specifically Medicare, Medicaid, CHIP, private insurance and the uninsured. The bill currently has no cosponsors. The 340B community has expressed concern over S. 2453 for presenting an incomplete picture of how 340B actually works.

In addition to these bills that look to overhaul the 340B program, there is one bill looking to protect it. In November of last year, Reps. David McKinley (R-WV) and Mike Thompson (D-CA) introduced House bill H.R. 4392. The bill, which currently has 189 cosponsors, asks HHS to maintain current 340B rates, rather than implement the recently announced ruling, but does not seek to change the claim modifier requirement to track which drugs are obtained under the 340B program. However, the bill has no chance of moving without some offsets to increase transparency and reporting.

Appeals and hearings

As the House continues to push the above-mentioned bills, it was reported on March 2 that the Senate health committee is now planning an oversight hearing for the 340B program, which Modern Healthcare calls “the first significant move in the upper chamber to follow the US House of Representatives’ push for 340B reform.” The hearing is planned for March 15.

Additionally, Modern Healthcare reports, the House Energy & Commerce Committee is expected to hold hearings later this month “on a packet of bills that would significantly change 340B operations.”

Meanwhile, the American Hospital Association and other hospitals and groups are still working to appeal the U.S. District Court for the District of Columbia’s December 29 decision to dismiss the AHA lawsuit that had been filed against CMS to prevent the 340B program reimbursement cuts from taking effect. The AHA group filed to appeal that decision on January 9.

A February 29 brief indicated that AHA was still pushing for reversal of that court decision. “In evaluating the district court’s denial of a preliminary injunction, this Court must consider the extent to which an injunction is necessary to avert irreparable harm, the balance of the equities, and whether an injunction will serve the public interest,” the association said in a friend-of-the-court brief. “It is difficult to imagine a case that more obviously satisfies those criteria.”

HHS arguments in the case are due March 19, with the hospitals’ counterarguments due April 2. Arguments will be heard on May 4 through the federal appellate court.

2019 fiscal year budget – 340B implications

The 2019 FY budget from the White House, released February 12, requests $26 million for the 340B Drug Pricing Program, which represents an additional $16 million from the previous four years through a user fee on drug purchases by covered entities. The administration says the new user fee will help improve the program’s operations and oversight (the money would support the OPAIS system and audits). This proposal has been sought for the past three administrations, both Republican and Democrat, with no traction. This fee would be paid by covered entities to participate in 340B—an additional cost to offset HRSA’s need for resources.

The administration proposes “to improve 340B program integrity and ensure that the benefits of the program are used to help low-income and uninsured patients.” It is calling for “broad regulatory authority” for the 340B program to “set enforceable standards of program participation and require all covered entities to report on use of program savings.” This will require Congressional legislation, a request that has been made by HRSA/OPA through hearings with Congressional committees over the last three years; such “broad” authority is unlikely.

“The President’s proposal to alter Medicare payment policies for hospitals participating in the 340B Drug Pricing Program raises serious concerns about the future of this vital program and the patient care it supports,” 340B Health said in a statement. “In the guise of lowering drug prices, the administration is seeking to continue its misguided policy of reducing Part B payments to 340B hospitals, a policy that violates Medicare law and undermines the 340B program enacted by Congress.”

More to come

In the absence of any workable alternatives to the bills calling for program oversight coming from the 340B community as a whole, Sentry is working closely with our customers to understand their perspectives on transparency.

On the heels of the 2018 340B Coalition Winter Conference that wrapped up at the end of February, and as these legal developments crawl forward, Sentry continues to encourage its customers—and all 340B-eligible entities—to stay abreast of the changing landscape. We remain committed to providing our 340B customers with the tools and information needed to continue their invaluable work in serving their communities. Sentry will remain diligent in monitoring the environment and be prepared for any shifts or new trends to support our customers continue to strengthen compliance.

As the first quarter of 2018 closes, we are prepared for second quarter enhanced solutions to help hospitals implement the Medicare Part B requirements in light of an unknown determination by the court system and/or legislation.  Sentry is focused on you to provide more knowledge and experience to navigate today in preparation for tomorrow.