Policy Watch

Some doubt whether Congress will pass 340B legislation during this election year.

May 10—Congress will once again examine the 340B discount drug program next week amid several judicial and regulatory developments related to the program.

The Senate Health, Education, Labor, and Pensions Committee will hold its second 340B hearing on May 15. The hearing will feature testimony from the Department of Health and Human Services (HHS) Office of Inspector General and the Government Accountability Office.

The hearing follows the introduction last month of a bill that would require 340B hospitals to disclose low-income utilization rates for outpatient and inpatient services. Sponsored by Rep. Buddy Carter (R-Ga.), the legislation was backed by the pharmaceutical trade association BIO and a physician group called the U.S. Oncology Network.

Rep. Larry Bucshon (R-Ind.) recently pushed the House Energy & Commerce Committee chairman to hold a hearing on bills to change the 340B program but doubted that any of them would pass this year, according to published reports.

Last month’s bill followed the introduction in January of legislation to change the 340B program, including implementation of a two-year moratorium on allowing certain additional hospitals and hospital outpatient departments to participate in 340B, as well as stricter 340B eligibility criteria for hospital outpatient sites.

The program still has vocal defenders, such as Rep. Joseph Crowley (D-N.Y.), chairman of the House Democratic Caucus, who told attendees at the annual meeting of the American Hospital Association (AHA) that he would stand up against proposals “to hurt programs” that hospitals depend on, like 340B.

Both of the Trump administration’s previous budgets proposed changes to the 340B program.

Regulatory Developments

Hospitals were reeling from a recent HHS proposal to delay to July 1, 2019, the effective date of its final rule on 340B drug ceiling prices and civil monetary penalties for manufacturers.

HHS said the delay was necessary because it is developing policies to address drug pricing throughout government programs, including the 340B program, and "it would be counterproductive to effectuate the final rule prior to issuance of additional or alternative rulemaking on these issues.”

“We are once again very disappointed in this proposed delay of the 340B ceiling price and civil monetary penalties rule, especially considering that HRSA [the Health Resources and Services Administration] began rulemaking on this issue more than seven years ago,” Tom Nickels, executive vice president of the American Hospital Association (AHA), said in a written statement. “While we appreciate that the administration has stated a commitment to tackling high drug prices, these multiple delays are unjustified given the exhaustive rule development process that has already occurred.”

America’s Essential Hospitals (AEH) noted that federal scrutiny of manufacturer pricing practices has found overcharges in the 340B program.

“These overcharges undermine the program’s ability to make drugs affordable for vulnerable patients and increase costs for their hospitals, which already operate with thin margins,” AEH said in a written statement. “We have waited too long for simple measures to hold drugmakers accountable in the 340B program. Hospitals and other covered entities comply with significant program oversight, including more than 800 federal audits since 2012. Manufacturers have faced only 11 audits since 2015.”

In a separate April development, the Centers for Medicare & Medicaid Services (CMS) posted new sub-regulatory guidance regarding billing modifiers for 340B drugs.

Judicial Developments

A panel of federal appellate judges is considering whether to revive the challenge by AHA, AEH, and others to 340B Medicare cuts over whether the changes were made properly, according to published reports.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit questioned during a May 4 hearing on reinstating the hospital groups’ previously dismissed legal challenge whether the HHS secretary’s authority allowed for the cuts.

The case stemmed from a November hospital lawsuit challenging the nearly 30 percent cut to Medicare Part B payments for 340B hospitals that went into effect in January 2018. Affected hospitals projected that the cut will cost them $1.6 billion annually.

Monday, May 14

National Institute for Health Care Management (NIHCM) Foundation briefing on Capitol Hill titled “Reimagining Health Care in America.” Learn more.

Seventh annual Innovation Conference hosted by the Health Technology Forum at the Stanford School of Medicine (through May 15). Learn more.

Tuesday, May 15

Deadline for physicians and teaching hospitals to review (and dispute) data reported about them by drug and medical device makers for 2017. Learn more.

CMS webinar on Hospital Inpatient Quality Reporting (IQR) Program CY17 (FY20 Payment Determination) eCQM Validation Overview for Selected Hospitals. Learn more.

American Hospital Association webinar on strategic talent practices and strategies to improve hiring speed and retention. Learn more.

Advisory Board webinar on successfully transitioning into and managing Medicaid risk. Learn more.

Deadline for nominations for the National Academy of Medicine's 2018 Gustav O. Lienhard Award for Advancement of Health Care. Learn more.

America’s Health Insurance Plans (AHIP) webinar titled “Offer a Frictionless Member Experience? It's possible!" Learn more.

Wednesday, May 16

CMS event titled “Quality Payment Program: Answering Your Frequently Asked Questions Call.” Learn more.

CMS event titled “FY 2019 IPPS Proposed Rule: eCQM Reporting Webinar.” Learn more.

HRSA webinar titled “Consultation Services for Treating Pregnant Women with Opioid Use Disorder.” Learn more.

AHIP webinar titled “Top Challenges and Opportunities of Clinical Data." Learn more.

Second National Medicare Advantage Summit, Washington, D.C. (through May 18). Learn more.

Thursday, May 17

Hotel cut-off date for HFMA’s 2018 Annual Conference. Learn more.

House Energy & Commerce Committee second vote on opioid-related legislation. Learn more.

Departments of Defense and Veterans Affairs healthcare interoperability event. Learn more.

CMS webinar titled “ IPFQR Program: FY 2019 IPF PPS Proposed Rule.” Learn more.

Nineteenth Annual Not-For-Profit Health Care Investor Conference. Learn more.

AHIP webinar titled “Maximize the Value of Your Wellness Program.” Learn more.

Friday, May 18

Deadline to apply to participate in HFMA’s Executive Connection Program for the 2018 Annual Conference. Learn more.

Webcast and meeting by SAMHSA and the Administration for Community Living, focused on the topics of mental health and aging. Learn more.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Thursday, May 10, 2018