340B Policy Landscape
Providence 2015 340B Summit
Presented by Steve Brennan,
Director, Public Policy
Providence Health & Services
Today’s
topics
Backdrop of debate over 340B program
Legislative Activity in Washington, DC
Providence engagement
HRSA Omnibus Guidance
Discussion
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Legislation, policy and regulations |relationships, engagement, memberships
The current landscape
9/27/2015
Backdrop: Increasing Drug Prices
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Concern Growing Regarding High Drug Costs
• High cost of Hepatitis C drugs burden state Medicaid programs;
legislatures in California, Oregon, other states look to respond
• Exponential price increases for certain drugs following acquisitions
(5,000 % increase for Daraprim)
• Congress is considering drug reimportation, allowing CMS to negotiate
with drug companies, barring “pay for delay” agreements, requiring
rebates for Medicaid when generic prices increase, other responses to
lower drug costs
• Presidential candidates Hillary Clinton, Bernie Sanders raising the issue
on the campaign trail
• MedPAC studying options for Medicare program, including adding drug
costs to ACO accountability
340B Policy Debate
Program established in 1992 in the Veterans Health Service Act to
establish
an upper limit on the prices of covered outpatient drugs
sold to particular covered entities to improve access for underserved
populations.
The Affordable Care Act expanded the program types of entities
eligible to participate in this program to include children’s
hospitals, critical access hospitals, free standing cancer hospitals,
rural referral centers, and sole community hospitals. HRSA has
estimated that this expansion enables up to 1,500 new facilities to
become eligible to participate in the 340B program.
Expansion of 340B prompted concerns, criticism over lack of
regulatory oversight and moved beyond Congressional intent
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Pharma, “AIR 340B” (includes oncology groups and others)
spearheading advocacy campaign to tighten 340B program and
reduce the number and types of facilities and providers eligible for
340B discounts
for underserved populations.
Pharma, “AIR 340B” (includes oncology groups and
others) spearheading advocacy campaign to
tighten 340B program and reduce the number and
types of facilities and providers eligible for 340B
discounts
for underserved populations.
340B Policy Debate, cont.
• Critics have garnered support from several key Members of Congress, most
notably Senate Finance Committee Chairman Orrin Hatch (R-UT)
• Congressional pressure resulted in a GAO study that showed Medicare Part B
drug spending is higher at 340B-eligible hospitals – disputed by AHA, 340B
Health, others
• House Energy & Commerce Health Subcommittee held a hearing in May to
consider legislation to address criticism – bill not introduced
HRSA 340B “Mega Guidance”
340B PROGRAM
Key Elements of the Proposed Guidance
Category
Proposed Changes
Program Eligibility and Registration
• Use of 340B in connection with most services
furnished outside the hospital would be prohibited;
• 340B only used for drugs that are ordered with a
service that is billed as an outpatient – not available
upon discharge from an inpatient stay
• Limits physician-administered drugs to only orders
written by a hospital provider – affiliated providers
not considered eligible.
Drugs Eligible for Purchase Under
340B
• Excludes Medicaid drugs paid as part of a bundled rate
from 340B eligibility; separately paid drugs remain
eligible
• Hospitals subject to GPO exclusion have to ensure that
any drugs are purchased on the correct accounts in
order to comply with the prohibition.
Key Elements, Cont.
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Category
Proposed Changes
Individuals Eligible to Receive
340B Drugs
Changes the definition of a “Patient of a Covered Entity” to include: • Patient receives services at a facility or clinic site that is
registered with the program and listed in the 340B database; • Patient must receive services provided by a CE provider who is
“either employed by the CE or who is an independent contractor for the CE, such that the CE may bill for services on behalf of the provider;”
• An individual would not be considered a patient of the CE whose only relationship is the dispensing or infusion of a drug
• An individual is considered a patient if his or her health care services is billed as an outpatient to the patient’s insurance or 3rd
party payor;
• The individual patient’s records are accessible to the CE and demonstrate that the CE is responsible for care. Demonstrates that the CE has a relationship for the services that result in the order or prescription and the CE retains responsibility for the care provided to the individual
• CE’s must maintain records that “demonstrate that all of the criteria above were met for every prescription or order.”
Category
Proposed Changes
Covered Entity
Requirements; Prohibition
of Duplicate Discounts
• HRSA proposes to allow CEs to elect to “carve in” by having their Medicaid billing number, NPI or both listed on the 340B Medicaid Exclusion File. Also new guidance on Medicaid managed care, indicating that CEs can make different determinations regarding MCO patients than they do for FFS patients – by either covered entity site and MCO.
• Where a contract pharmacy is listed on the 340B database, it will be presumed that the contract pharmacy will not dispense 340B drugs to Medicaid MCO or FFS patients, unless a written contract with the state is in place.
• Maintenance of Auditable Records: HRSA proposes a new standard of not less than five years for all 340B records, including those pertaining to child sites and contract pharmacies.
Contract Pharmacy
Arrangements
• A single CE can contract with a pharmacy only on its own behalf as an individual covered entity – groups or networks of covered entities may not register or contract for pharmacy services on behalf of their individual covered entity members.
• HRSA warns that a CE contracting with a contract pharmacy should be aware of the federal anti-kickback statute and how such
provisions could apply to arrangements with contract pharmacies. No further clarity is provided.
Next Steps
Advocacy work going forward through the end of 2015
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