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NASH Opposes Proposed 340B Data Collection

The federal government should not require hospitals to submit new data on their acquisition costs for prescription drugs they dispense to low-income patients through the section 340B prescription drug discount program, NASH has told the Centers for Medicare & Medicaid Services.

In a formal comment letter in response to new data collection requirements proposed by CMS last month, the National Alliance of Safety-Net Hospitals wrote on behalf of private safety-net hospitals 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 not modified that purpose since that time. 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.

In the letter, NASH also objected that the proposed data collection would be costly and burdensome for hospitals and is premature because the courts are still considering challenges to CMS’s authority to reduce 340B payments to providers; the latter is why CMS seeks this data.

Go here to see NASH’s formal comment letter to CMS.

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

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

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

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

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

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

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.”

Hospitals Ask Congress to Protect 340B Program

The leaders of more than 700 hospitals and health systems have written to congressional leaders to ask them to protect the section 340B prescription drug discount program.

The letter states that

 We are concerned about recent regulatory actions that have reduced the reach of this vital program and by legislative proposals that would undo more than two decades of bipartisan work to preserve the health care safety net.

The letter explains that

 In 2015, 340B hospitals provided $26 billion in uncompensated and unreimbursed care to low-income and rural patients in need. That represented 60 percent of all such care delivered in the U.S. even though our hospitals comprise only 38 percent of all acute care hospitals operating in our country. Because of the savings from 340B, we are able to offer vital but often money-losing services including obstetrics, trauma care, opioid addiction treatment, and HIV/AIDS care. In many rural communities, 340B savings are the difference between hospitals staying open and closing. We do all of this without using taxpayer dollars.

And

Efforts to reduce the scope of the 340B program would not reduce the cost of prescription drugs in the U.S. and would weaken nonprofit hospitals’ ability to serve patients who often have nowhere else to turn.

NAUH has long advocated protecting the 340B program, writing to Congress to express this view on many occasions, and most recently, earlier this year.

Go here to see the complete letter from the more than 700 hospitals and health systems.

HHS Chief Says 340B Changes are Coming

Health care providers and drug manufacturers should expect changes in the section 340B prescription drug discount program in the near future.

That was the message conveyed by Health and Human Services Secretary Alex Azar during a recent conference held by the 340B Coalition.

The 340B program, which provides discounts on the prescription drugs dispensed on an outpatient basis by eligible providers to their low-income patients, has become increasing controversial in recent years as it has expanded and pharmaceutical companies have objected to the discounts they must provide.

Among the changes Azar suggested are coming are greater accountability among participating hospitals for how they use the savings they derive from the discounts and a narrowing of the difference between the prices hospitals pay for the drugs and their average sales price, which Azar said is currently too great.  CMS recently imposed a 28 percent reduction of Medicare payments to participating providers for drugs dispensed to 340B-qualified patients.

To qualify for participation in the program, providers must serve especially high proportions of low-income patients.  Most private safety-net hospitals participate in the program.

Learn more about Secretary Azar’s comments from this Healthcare Dive article.

 

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.

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

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