Posts

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.

New 340B Bill Proposed

A new bill introduced in the House seeks to bring greater transparency to the controversial 340B prescription drug discount program.

Under H.R.5598, proposed by Rep. Earl “Buddy” Carter (R-GA), hospitals would be required to report the outpatient care they provide to low-income patients in both their main hospital and at pediatric care sites.  Hospitals already separately report the inpatient care they provide to such patients.

According to Representative Carter,

I introduced this legislation today because I believe the 340B program is very important, but it needs to be improved.  340B is an outpatient program and currently hospitals do not have to report low-income utilization in outpatient settings. This legislation adds an additional layer of transparency to allow us to better understand the patient makeup of DSH hospitals to improve the program and ensure it is truly being used in the most effective way for our nation’s most vulnerable patients.

The 340B program provides discounts to qualified hospitals when they dispense drugs on an outpatient basis to low-income patients.  All Medicare disproportionate share (Medicare DSH) hospitals, along with other providers that meet formal criteria, qualify to participate in the program.  All NAUH members participate in the 340B program.

Learn more about the bill from this news release from Representative Carter or see the bill itself.

 

340B Program Getting the Job Done

The oft-scrutinized section 340B prescription drug discount program is doing what the program is supposed to do, according to a new analysis published on the Health Affairs Blog.

According to the report,

340B DSHs treat significantly more low-income patients than non-340B hospitals, provide a disproportionate amount of the nation’s uncompensated and unreimbursed care, and are more likely to provide specialized services that are critical to low-income patients but which are often underpaid.

In addition, 340B

…has saved billions in drug costs while providing free or discounted care to millions of patients who might otherwise be unable to get needed care. This is accomplished at no cost to taxpayers.

In addition, the report concludes that 340B-eligible hospitals:

  • care for significantly more low-income patients
  • provide the majority of uncompensated care unreimbursed care
  • are more likely to offer specialized and community services

NAUH has long been a staunch supporter of the 340B program, including in this January 2018 letter to members of Congress and this fall 2017 letter to the administration expressing opposition to proposed changes in the program.

Learn more about the facts and the data underlying these assertions in the Health Affairs Blog post “The 340B Drug Discount Program Is Fulfilling Its Original Purpose,” which can be found here.

New Bill Proposes Greater 340B Accountability

A new bill proposed last week by Senator Chuck Grassley (R-IA) seeks to foster greater accountability among participants in the federal government’s section 340B prescription drug discount program.

The three-page bill is called the Ensuring the Value of the 340B Program Act of 2018, and according to a news release from the senator, its purpose is to require

…participating hospitals to report the total acquisition costs for drugs collected through the 340B program, as well as revenues received from all third party papers for those same drugs.

The 340B program provides discounts on prescription drugs dispensed on an outpatient basis to hospitals that qualify for participation based on how many low-income patients they serve.

Grassley’s proposal is the fourth 340B bill introduced in Congress in recent months as the program continues to draw attention from lawmakers.

Virtually all private safety-net hospitals participate in the 340B program and consider it an essential tool in serving the large numbers of low-income patients in the communities in which they are located.

Go here to see Grassley’s news release about his proposal and here to see the bill itself.

340B on the Move?

Consider moving the section 340B prescription drug discount program from the Health Resources and Services Administration to the Centers for Medicare & Medicaid Services.

That was the message in a recent letter from Senate Finance Committee chairman Orrin Hatch to new Secretary of Health and Human Services Alex Azar.

In his letter, Senate Hatch observes that

HRSA lacks the necessary regulatory authority to oversee the 340B program. The agency only has the authority to regulate in three areas, which include establishing an alternative dispute resolution process, imposing civil monetary penalties against manufacturers who knowingly overcharge covered entities, and calculating the 340B ceiling price. Even so, it has not fully implemented these regulations. HRSA audits covered entities for program eligibility, duplicate discounts, and diversion. However, HRSA rarely audits manufacturers to ensure compliance with the ceiling price and conducts fewer than 200 audits of covered entities each year. The limited audits HRSA did conduct reveal high-levels of non-compliance by covered entities. This is disconcerting, given that, with relatively few dedicated staff, by 2021 HRSA will be responsible for providing oversight for over $20 billion in drug sales.

To address this challenge, Senator Hatch suggests that

With the limited statutory authority and concern that HRSA lacks adequate resources, HHS should consider whether CMS is better suited for 340B program administration, all or in part. Many determinants of 340B eligibility and other operational program details are linked to Medicare and Medicaid program components. CMS has extensive experience directly interacting with hospitals and drug manufacturers, including ensuring they meet participation requirements and conduct audits. Additionally, HHS already works with the Internal Revenue Service (IRS) to report charity care to Congress. This makes HHS more capable of tracking how covered entities use 340B savings.

In his letter, Senator Hatch also posed a number of 340B-related questions to Secretary Azar and requested a response to the Senate Finance Committee by February 26.

The 340B program has become controversial in recent years and has been the subject of considerable congressional scrutiny.  Currently, Congress is considering several bills to alter the program in different ways.

Virtually all private safety-net hospitals participate in the 340B program and consider it an essential tool in their efforts to serve their predominantly low-income communities.

Read Senator Hatch’s entire 340B letter to HHS Secretary Azar here.

 

Safety-Net Hospitals Under the Gun

Safety-net hospitals across the country – including private safety-net hospitals – face a new challenge:  adjusting to several cuts in the supplemental payments they receive from the federal government to help them serve the low-income residents of the communities in which they are located.

First there is a $2 billion cut in Medicaid disproportionate share hospital payments (Medicaid DSH).  These are payments made to hospitals that serve especially large numbers of low-income patients.  These payments help safety-net hospitals with the unreimbursed expenses they incur caring for such patients.  This cut, mandated by the Affordable Care Act but twice delayed by Congress, took effect on January 1.  In many states the value of Medicaid DSH cuts will exceed the reductions in uninsured care that hospitals have experienced since the Affordable Care Act made health insurance more widely available.

Second there is a 28 percent cut in Medicare payments for prescription drugs dispensed through the section 340B prescription drug discount program.  This cut, too, took effect on January 1.

Finally, federal funding has lapsed for the Children’s Health Insurance Program (CHIP) and for community health centers.

Safety-net hospitals are considering a number of moves to offset these losses.  Among them:  reducing or eliminating services, laying off staff, discontinuing the provision of transportation assistance, and eliminating post-discharge assistance to patients.  One safety-net hospital is even considering discontinuing providing chemotherapy to cancer patients because such drugs are especially expensive and often reimbursed through the 340B program.

These cuts have serious implications both for private safety-net hospitals and for the communities they serve.

Learn more about the cuts private safety-net hospitals face, their implications, and how they might respond to them in this Stateline article.