On January 10, 2020, the Government Accountability Office (GAO) released a report which “found weaknesses in the Health Resources and Services Administration’s (HRSA) oversight [of the 340B Program] that may result in some hospitals receiving discounts for which they are not eligible.” The GAO report primarily focused on the extent to which HRSA is monitoring and reviewing nongovernmental hospitals’ contracts with state or local governments. These contracts, required by statute as a condition of participation in the 340B Program, must be between the nongovernmental hospital and a unit of state or local government, and must indicate that the hospital will provide health care services to low-income individuals not eligible for Medicaid or Medicare.
While much attention has been paid to the ongoing litigation related to the ongoing 340B Medicare Part B payment reduction litigation (which is now pending before the US Court of Appeals for the DC Circuit), new legislation at the state level may also have a significant impact on covered entity reimbursement for 340B drugs.
The Centers for Medicare & Medicaid Services (CMS) “respectfully disagreed” with a recent federal district court’s “understanding of the scope of CMS’ adjustment authority” in making cuts to Medicare Part B reimbursement for drugs purchased through the 340B program, saying it plans to continue its 28.5 percent reduction in reimbursement while it pursues an appeal in federal court.
340B Medicare Part B Adjustment Litigation Update
In the latest development of the ongoing 340B Medicare Part B payment reduction controversy, US District Judge Rudolph Contreras again concluded that the Department of Health and Human Services (HHS) exceeded its statutory authority in implementing a reduced Medicare reimbursement rate for 340B Program drugs for 2019. In issuing the opinion, the court relied upon the same analysis it employed to declare the same 2018 reimbursement reductions unlawful. As such, the court has enjoined HHS’ proposed Medicare reimbursement reductions for both 2018 and 2019. Continue Reading
On March 11, 2019, the President delivered his proposed 2020 budget to Congress. While a President’s budget proposal is the beginning of a lengthy budget process, this proposed budget nonetheless keeps the 340B Program in the national focus and delineates the President’s position on desired 340B Program changes.
CVS Caremark has decided not to implement reimbursement reductions which may have had adverse effects on Covered Entities and their retail pharmacies (including contract pharmacies). This decision, coupled with the recent court decision invalidating certain aspects of the proposed Medicare Part B payment reductions for 340B drugs, provides some positive news for these Covered Entities after years of uncertainty over the future of the 340B Program.
It’s been a roller coaster two years for the 340B Program, and we are now back to review some of the major developments and program changes during this time. On the highest level, despite a flurry of proposed legislative action, the 340B Program remains largely unchanged from where it stood prior to 2017. As covered in more detail below, the notable exception to this is the significant Medicare Part B reimbursement reductions for certain categories of 340B covered entities. Of course, in typical 340B Program “see saw” fashion, the future of these reimbursement reductions remains uncertain after a surprising recent court decision striking down the legality of these reductions for 2018. The 340B Program has also seen changes in the audit process for covered entities, which we discuss below.
The proposed 340B Drug Pricing Program Omnibus Guidance that was issued in August 2015 and promised to turn the 340B world on its head was withdrawn on January 30, 2017.
Not that most covered entities are upset. The proposed 340B Drug Pricing Program Omnibus Guidance proposed a host of changes to the 340B Drug Pricing Program, a law that requires drug manufacturers to provide discounts on “covered outpatient drugs” to “covered entities,” when those “covered entities” provide the drug to “eligible patients.” As we’ve covered in multiple posts, these changes ran the gamut–and most of the time, to the detriment of covered entities. Probably the most significant proposed change was the overhaul of the patient definition, which, among other things, tightened the nexus between a patient, a prescriber, and the covered entity registered site. Continue Reading
Yep. Audits. They are happening. And, chances are, if your covered entity (“CE”) hasn’t experienced one yet, it is coming to you sometime soon. At both 340B University (hosted by Apexus, the prime vendor for the 340B Drug Pricing Program) and the 340B Coalition Conference (hosted by 340B Health) many CEs we interacted with had already experienced the Health Resources and Services Administration (“HRSA”) audit process. Continue Reading
Maybe it is just us, but we wanted to know whether we would get a different experience at 340B University versus the 340B Coalition Conference. In some ways, these conferences could not have been more different. But, at the heart of it all, each had the same underlying education of stakeholders so that covered entities (“CEs”) can continue stretching “scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”
The 340B Prime Vendor, Apexus, puts on this educational program. Apexus is the “exclusive contractor” for the 340B Drug Pricing Program (“340B Program”). As the 340B Prime Vendor, Apexus works closely with the Health Resources and Services Administration (“HRSA”) to provide education to providers. Continue Reading