Archive for 340b

 

GAO Recommends Changes in Oversight of 340B Program

The federal Government Accountability Office is recommending that the Department of Health and Human Services improve its oversight of the 340B prescription drug discount program.

That program was created by Congress to help safety-net providers obtain discounts on prescription drugs they dispense to low-income patients on an outpatient basis.  Those discounts are provided by pharmaceutical companies and not paid for with taxpayer money.

The 340B program has been controversial in recent years, and in response to a request from Congress for the GAO to look into the contract pharmacies that operate the 340B programs for many safety-net providers, the GAO performed an examination of the program.

Its review identified several weaknesses in the manner that HHS’s Health Resources and Services Administration oversees the program.

  • HRSA audits do not fully assess compliance with the 340B Program prohibition on duplicate discounts for drugs prescribed to Medicaid beneficiaries. Specifically, manufacturers cannot be required to provide both the 340B discount and a rebate through the Medicaid Drug Rebate Program. However, HRSA only assesses the potential for duplicate discounts in Medicaid fee-for-service and not Medicaid managed care. As a result, it cannot ensure compliance with this requirement for the majority of Medicaid prescriptions, which occur

S&P: 340B Cuts Will Hurt

Payment cuts in the 340B prescription drug program will most likely hurt hospital financial performance, and among those most likely to be hurt are DSH hospitals, small hospitals, and rural hospitals.

These are among the conclusions in a report recently issued by S&P Global Ratings.

The report concludes that

…the impact of the cuts to the 340B Drug Pricing Program on not-for-profit hospitals that rely on 340B drug savings will likely weaken their operating performance at a time of already tightening margins.

Effective the beginning of 2018, the Centers for Medicare & Medicaid Services cut the 340B program 16 percent, or $1.6 billion, reducing the reimbursement 340B-eligible hospitals receive for dispensing prescription drugs on an outpatient basis to eligible patients.

The hospitals most affected, according to S&P, are those that

…depend more on the margin they receive from 340B medications to sustain their bottom line and overall financial profiles.  In these cases, cuts to the program are likely to further stress already-constrained operating performance, adding to financial pressure and possible negative rating actions.

Learn more about the possible financial impact on hospitals of recent 340B payment cuts in this S&P Global report.

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The 340B Issue Explained

The section 340B prescription drug discount program has grown increasingly controversial in recent years.

The program, established in the 1990s to help hospitals with the cost of the prescription drugs they provide to low-income patients on an outpatient basis, has grown considerably since its inception.  Pharmaceutical companies argue that it is too large, that it contributes to the growing cost of prescription drugs, and that hospitals are not using the savings they reap from the program to serve more low-income patients, as was envisioned when Congress created the program.

Eligible providers, on the other hand, note that much of the program’s growth was mandated by Congress and that 340B continues to serve its original purpose of helping hospitals serve low-income outpatients while using the savings the program generates to provide even further assistance to low-income patients.

Recent federal efforts to address some of these issues have satisfied neither side.

The Vox news web site has published an article that describes the program and outlines both sides of the argument.  Find it here.…

HHS Unveils Spring Regulatory Agenda

The U.S. Department of Health and Human Services has published a comprehensive list of the regulatory actions it plans to take in the coming months.

Included on the list are regulations that have been proposed, that are being finalized, and that are currently under development.  They address Medicare, Medicaid, Food and Drug Administration endeavors, medical devices, the 340B prescription drug discount program, and more.

Among the policy changes contemplated through future regulations are measures to reduce regulatory burdens for hospitals, address the opioid problem, facilitate the use of non-Affordable Care Act-compliant health insurance plans, and more.

Go here to see a complete list of the areas for proposed regulatory action by HHS and for links to brief statements about the contemplated actions.…

Senate Committee Looks at 340B Program

The Senate Health, Education, Labor, and Pensions Committee (HELP) held a hearing last week on the 340B prescription drug discount program.

The hearing was prompted by complaints from pharmaceutical companies about the discounts they are required to provide to eligible providers and by concern that hospitals are insufficiently accountable for how they use the savings they derive from those discounts to serve their low-income patients.  In addition, the Centers for Medicare & Medicaid Services recently reduced its Medicare payments to participating hospitals.

During the hearing, Senate Republicans expressed support for the program but spoke of the need for greater transparency in the use of the savings the 340B program generates for hospitals and a clearer sense of how those savings benefit low-income payments.  Committee Democrats expressed similar concern but with less urgency.

Hospital industry representatives expressed concern that any new requirements could weaken the program and rejected the idea that savings are misused.  Committee members pushed back against these contentions.

The Senate HELP Committee intends to hold additional hearings about the 340B program.

Learn more about the 340B hearing and the concerns that led to in this Healthcare Dive article.

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