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340B Déjà Vu: CMS Seeks to Collect Data From Hospitals

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For the second time in four months, the federal government has announced its intention to collect data from hospitals and other providers on what they pay for the prescription drugs they purchase through the section 340B prescription drug discount program.

Last week the Centers for Medicare & Medicaid Services published a notice announcing its intention to collect this data.  Previously, health care interests sued CMS when it attempted in 2018 to reduce payments to providers for drugs purchased through the 340B program and the court ruled against CMS, maintaining that the agency did not have enough data on hospitals’ acquisition costs for the drugs to justify the proposed payment reduction.  The newly announced data collection effort seeks to rectify that shortcoming as the court considers CMS’s appeal of a similar decision in a lawsuit filed after CMS again proposed reducing 340B payments and was again rebuffed by the courts in 2019.

Under federal law, CMS must publish a notice declaring its intention to collect such data and seek input from stakeholders.  For this particular notice, stakeholders have until March 9 to respond.

CMS published a similar notice in September of 2019 announcing its intention to collect similar data.  That data collection never took place.  NASH opposed that data collection proposal in a formal comment letter to CMS, writing on behalf of private safety-net hospitals that

NASH and the nation’s private safety-net hospitals oppose the proposed collection of data involving the section 340B prescription drug discount program for three reasons:

  • we oppose CMS’s continued efforts to reduce 340B reimbursement to eligible hospitals;
  • the proposed data collection would be exceptionally burdensome; and
  • we disagree with attempting to address a matter still being litigated.

Most private safety-net hospitals participate in the 340B program and consider it a vital tool in serving the many low-income residents of the communities in which they are located.

See NASH’s complete comment letter here.

To learn more about CMS’s 340B data collection effort, see the notice it published in the Federal Register and read the Becker’s Hospital Review article “CMS ready to survey 340B hospitals about drug acquisition costs.”

NASH Unveils 2020 Advocacy Agenda

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The National Alliance of Safety-Net Hospitals has published its 2020 advocacy agenda.

To advance the interests of private safety-net hospitals, in the coming year NASH will:

  • Continue to address the major policy challenges of 2019 that had not been resolved as that year ended:  an extended delay of Medicaid disproportionate share (Medicaid DSH) cuts, surprise medical bills, and prescription drug prices.
  • Respond to administration-driven policies such as the calculation of Medicare disproportionate share (Medicare DSH) payments, reduced payments for prescription drugs under the 340B prescription drug discount program, and efforts to reduce Medicaid eligibility and benefits and to limit the means through which states may finance their share of Medicaid payments.
  • Respond to expected judicial decisions addressing the extension of site-neutral Medicare outpatient payments to additional outpatient settings and the implementation of a new public charge regulation.

For a more detailed look at NASH’s advocacy plans for the coming year, see its complete 2020 advocacy agenda.

340B Doesn’t Drive Up Hospital Drug Spending, MedPAC Says

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Hospitals do not prescribe more expensive drugs because they know the 340B program will help pay for them.

That is the conclusion drawn in a recent analysis by the Medicare Payment Advisory Commission.

Prescription drug spending has risen markedly in recent years and the pharmaceutical industry maintains that part of that increase can be attributed to hospitals that participate in the section 340B prescription drug discount program, which requires pharmaceutical companies to give discounts to hospitals and other selected providers that care for especially large numbers of low-income patients.

A new analysis by the Medicare Payment Advisory Commission, however, concludes that any such effect is minimal.

340B discounts are available for qualified patients receiving drugs on an outpatient basis, and the program’s greatest costs are associated with drugs to treat cancer.  MedPAC found that prescribing decisions “appears to be specific to the type of cancer” and concluded that “…we are unable to attribute these findings to incentives created by 340B discounts” and that “Overall effects on cost sharing for cancer patients is likely to be small, if any, depending on cancer and the patient’s supplemental coverage.”

MedPAC warns that the empirical evidence underlying its analysis was limited.

Most private safety-net hospitals participate in the 340B program and consider it a vital resource in helping them serve their many low-income patients.

Learn more about the impact of the 340B program on the drugs prescribed by participating hospitals in the Becker’s Hospital Review article “340B has minimal effect on health spending, study finds” and the MedPAC presentation “Congressional request on health care provider consolidation: Does the 340B program create incentives for participating hospitals to use more expensive drugs?”

GAO: Feds Need Better Oversight of 340B Eligibility

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The federal government needs to do a better job of ensuring that non-government hospital participants in the 340B prescription drug discount program are eligible for that program, the U.S. Government Accountability Office concluded in a recent report.

With growing numbers of non-government hospitals now participating in the 340B program, the GAO found that the federal Health Resources and Services Administration, which oversees the program, is not doing enough to ensure that these hospitals meet the criteria for inclusion in the program.  In particular, the GAO found, HRSA needs to do more to ensure that such hospitals have valid contracts with state or local governments to care for low-income patients who qualify for 340B assistance with the cost of prescription drugs.  In particular, the GAO believes HRSA relies too much on hospitals’ own attestations that they have such contracts.

The GAO recommended a number of steps to ensure that hospitals truly are eligible to participate in the 340B program, including better and more frequent review of hospitals’ contracts with state or local governments.

Most private safety-net hospitals participate in the 340B program and consider it an essential tool in serving the low-income residents of the communities in which they are located.

Learn more about the problems the GAO found with HRSA’s management of non-government hospitals’ eligibility for the 340B program and how it recommends that HRSA address those problems in the GAO report “340B Drug Discount Program:  Increased Oversight Needed to Ensure Nongovernmental Hospitals Meet Eligibility Requirements

NASH Conveys End-of-Year Priorities to Congress

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Preventing Medicaid DSH cuts, a fair approach to protecting patients from surprise medical bills, and reducing prescription drug costs are among the policy positions that the National Alliance of Safety-Net Hospitals recently shared with Congress.

In its message to Congress, NASH also asked lawmakers to protect 340B prescription drug discounts for private safety-net hospitals and to preserve dedicated funding for community health centers, the National Health Service Corps, and the Teaching Health Center Graduate Medical Education.

Learn more about NASH’s end-of-year policy priorities from the message “Protect Safety-Net Hospitals and the Communities They Serve in Upcoming Budget and Legislative Deliberations” that NASH delivered yesterday to all 535 members of Congress.

Hospital Groups Critical of CMS 340B Proposal

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The federal government should not survey providers to determine their costs for drugs covered by the section 340B prescription drug discount program, hospitals and hospital groups have told the Centers for Medicare & Medicaid Services.

Their comments came in response to a regulation CMS proposed in September that would require hospitals to report their acquisition costs for 340B-covered drugs.  CMS proposed such data collection after federal courts ruled against its attempt to reduce 340B reimbursement to hospitals that participate in the program.  Among the court’s objections were CMS’s lack of data about those drug acquisition costs.

Among the reasons hospitals conveyed in expressing their opposition were the cost of reporting the data in question; the design of the survey; the flawed premise underlying the survey; and the proposed rule’s requirement that all hospitals complete the survey and not just those that participate in the 340B program.

Among the groups criticizing the proposed regulation were the Association of American Medical Colleges, which wrote in its comment letter that

Congress did not design the 340B program to pay hospitals at acquisition costs…Congress designed the program so that eligible hospitals could purchase covered drugs at a discounted rate below the Medicare reimbursement rate and use the difference to reach more eligible patients and provide more comprehensive services.

The National Alliance of Safety-Net Hospitals was among the groups commenting on the proposed regulation.  Writing on behalf of private safety-net hospitals, NASH observed in its November 27, 2019 formal comment letter that

The 340B program was created by Congress to enable hospitals (and other providers) that serve low-income communities to maximize their resources when working to serve those communities.  The program helps improve access to high-cost prescription drugs for low-income patients and helps put additional resources into the hands of qualified providers so those providers can do more for their low-income patients:  provide more care that their patients might otherwise not be able to afford, offer more services that might otherwise be unavailable to such patients, and do more outreach into communities consisting primarily of low-income residents.  This was the purpose of the 340B program when Congress created it in 1992 and Congress has done nothing to modify that purpose since that time:  it has not directed that special assistance to qualified providers be reduced; it has not insisted that participating providers document the expenditure of their savings in service to their communities; and it most certainly has not dictated that 340B payments to eligible providers be reduced so that payments to non-340B providers could be increased.  NASH believes that through this proposed data collection CMS is seeking to exert authority it does not have to demand of providers information to which the agency is not entitled.

Learn more about hospital industry opposition to the proposed 340B regulation in the Fierce Healthcare article “Hospitals blast CMS’ proposed 340B survey.”

Back Off 340B Data Collection, NASH Tells CMS

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The federal government should not impose a new, major data reporting requirement on 340B-eligible hospitals to support the implementation of a new policy that federal courts twice have rejected, NASH told the Centers for Medicare & Medicaid Services last week.

In formal comments in response to a CMS proposal to require hospitals that participate in the section 340B prescription drug discount program to provide CMS with extensive data on their acquisition costs for 340B drugs, NASH wrote that such data collection would be burdensome; that CMS should not be reducing 340B payments to providers because such a policy decision falls solely within the purview of Congress, which created the program; and that instead of focusing on just this one aspect of the court’s rejection of its attempts to reduce 340B payments, CMS should instead focus on the court’s order that the agency develop a means of reimbursing hospitals for the lost 340B payments Medicare has withheld from providers for the past two years.

Most private safety-net hospitals participate in the 340B program and count on the resources the program generates to help them provide additional services to the low-income residents of the communities in which they are located.

Learn more about why NASH objects to CMS’s planned data reporting requirement in NASH’s formal comment letter to CMS.

NASH Comments on Proposed Medicare Outpatient Payment Regulation (part 2 of 4)

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The National Alliance of Safety-Net Hospitals has submitted extensive comments to the Centers for Medicare & Medicaid Services about its proposed changes in the Medicare outpatient prospective payment system for 2020.

In its letter to CMS, NASH focuses on four issues:

  • CMS’s price transparency proposal
  • Reimbursement for 340B-covered prescription drugs
  • Medicare site-neutral payment policy
  • Proposed updates of the inpatient-only list of medical procedures

Today this blog features NASH’s comments about reimbursement for 340B-covered prescription drugs.  Yesterday we presented NASH’s views on CNN’s price transparency proposal; on Friday we present NASH’s views on Medicare site-neutral payment policy; and on Monday we present NASH’s perspective on CMS’s proposal to permit Medicare to pay for certain medical services on an outpatient basis rather than limiting them to being performed only on patients admitted to a hospital.

See the complete NASH letter to CMS here.

Reimbursement for 340B-Covered Prescription Drugs

The 340B prescription drug discount program helps improve access to high-cost prescription drugs for low-income patients and helps put additional resources into the hands of qualified providers so those providers can do more for such patients:  provide more care that their patients might otherwise not be able to afford, offer more services that might otherwise by unavailable to such patients, and do more outreach into communities consisting primarily of low-income residents.  Only providers that care for especially large numbers of low-income patients qualify to participate in the 340B program.

In this year’s proposed rule, CMS calls for reimbursing 340B-eligible providers at average sale price less 22.5 percent for 340B-covered prescription drugs.  NASH strongly opposes this proposal.

For the past two years CMS also has reimbursed 340B-eligible providers at average sale price less 22.5 percent for 340B-covered prescription drugs, a break from past policy, which reimbursed eligible providers at average sale price plus six percent.  This policy change was implemented even though Congress, which created the program, did not direct CMS to reduce payments to 340B providers that serve especially large numbers of low-income patients just to save money and certainly did not direct CMS to introduce new policies that seek to reduce the federal government’s commitment to serving low-income Americans.

Shortly after implementation of the reimbursement reduction that took effect in calendar year 2018, various stakeholders sued CMS over the payment cut and the courts agreed with the stakeholders and rejected the cut.  Despite the court’s ruling, CMS did not restore payments to average sale price plus six percent but continued to pay average sale price less 22.5 percent even though the court rejected this payment.

Despite the court’s rejection, CMS proposed the same payment cut for calendar year 2019:  average sale price minus 22.5 percent.  The stakeholders again sued and the courts again sided with stakeholders and rejected the payment cut.  Despite this, CMS again did not restore payments to average sale price plus six percent but continues to pay average sale price less 22.5 percent even though the court had now twice rejected this payment.

In light of these continued rejections by the courts, NASH encourages CMS to restore 340B payments to their previous level of average sale price plus six percent.  The courts have spoken and it is time to respect their verdict.

This leaves the question of how to reimburse providers for the revenue they lost when CMS continued to make essentially illegal underpayments for two full years, refusing to adjust its payments in the face of its losses in court – a question posed in the proposed regulation.  NASH believes the best way, the only way, to repair the damage done to safety-net providers by two years of underpayments is to restore those payments retroactively through a one-time, lump-sum payment that compensates them for every underpaid claim, every under-reimbursed prescription drug during the two-year period during which CMS continued to pay eligible providers average sale price less 22.5 percent despite not one but two court rulings that it must not do so.  These lump-sum payments, NASH believes, should be made in their entirety to all affected hospitals by the end of calendar year 2020.  To do this, NASH urges CMS to identify the amount of individual hospitals’ underpayments based on data hospitals have already submitted rather than requiring additional action by the injured parties.

As explained by the web site of the Health Resources and Services Administration, which operates the 340B program,

The 340B Program enables covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.

Federal policy should enhance this program and help it achieve its objectives, not make it harder for low-income patients and the providers that serve them.  NASH urges CMS to heed the federal government’s own rationale for the program and restore 340B payments to their previous level

See the complete NASH letter to CMS here.

Tomorrow:  NASH addresses CMS’s proposed changes in site-neutral payment policy

New Web Site Shows Maximum 340B Prices

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Providers can now see the maximum prices for 340B-covered drugs on a new web site established by the federal Health Resources & Services Administration.

The web site, mandated by Congress after the U.S. Department of Health and Services’ Inspector General found that some providers are being overcharged, will enable 340B-eligible providers to identify the maximum price they can be charged for covered drugs.  This, HRSA believes, will help providers avoid being overcharged in the future.

Most private safety-net hospitals participate in the 340B program and consider it a vital tool in helping them serve their low-income communities.

Learn more in the Becker’s Hospital Review article “HRSA launches 340B ceiling price website” and visit the new web site itself (registration required).

Pressure Off 340B?

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Two key House subcommittees will not hold hearings on the controversial 340B prescription drug discount program in the near future.

The chairs of the House Energy and Commerce Committee’s Oversight and Investigations Subcommittee and its Health Committee have both suggested that House Democrats understand the importance and value of the 340B program and see other health care issues as greater priorities.

This marks a serious departure from the last session of Congress, which saw a number of hearings on the 340B program and doubts cast about the program’s objectives and future.

Most private safety-net hospitals participate in the 340B program and consider it a vital resource in their efforts to serve their communities.  NASH has long advocated for the protection of the program, including in this 2018 letter to congressional leaders.

Learn more from the Lexology article “340B Program Gets Relief from Congressional Scrutiny.”