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    340B Drug Update

    We are sending this to you on behalf of Amy Mitchell, CRCE-I, AAHAM 2nd Vice President. Our Legislative Day topic this year was 340B and as you know, our work on it has just begun. 340B Health shared this with us and we wanted to share it with you.  

    Rep. Carter Introduces Bill to Impose New Reporting Requirement on 340B DSH Hospitals

    Rep. Buddy Carter (R-Ga.) has introduced legislation to require 340B disproportionate share (DSH) hospitals to submit outpatient charity care and outpatient revenue data to the federal government for the parent hospital and all of its 340B-registered child sites. The data would be part of hospitals' annual recertification of eligibility for the drug discount program by the Health Resources and Services Administration (HRSA). HRSA would submit an annual report about the data to Congress.

    Rep. Carter, a member of the House Energy & Commerce Committee, announced his 340B Optimization Act (H.R. 5598) in a press release. He said his bill would add "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 release also included support for the bill from the Community Oncology Alliance, AIR 340B, the Biotechnology Innovation Organization (BIO), and the U.S. Oncology Network.

    340B Health Interim President and Chief Executive Officer Maureen Testoni said, in a statement, that while we welcome discussing transparency in 340B, we are concerned that H.R. 5598's narrow focus on outpatient care "would paint an incomplete picture of the role 340B hospitals play in caring for low-income and rural patients and communities."

    "Hospitals already report a significant amount of data and information to the federal government that speaks to both the inpatient and outpatient services they provide to low-income patients," Testoni said. As our March 12 analysis of 340B DSH hospital services to low-income patients shows, "340B hospitals provide 60 percent of all uncompensated care in the U.S. but only represent 38 percent of acute care hospitals in the country. Uncompensated care is provided across inpatient and outpatient areas of the hospital. Low-income patients make up 42 percent of 340B hospitals' patient load compared with 27 percent for non-340B hospitals. These hospitals are much more likely to provide vital services including HIV/AIDS care, trauma care, and treatment for opioid addiction and other substance abuse conditions."

    "The bill's focus on charity care would ignore significant amounts of uncompensated and under-reimbursed care that 340B hospitals provide to low-income patients," Testoni continued. "And some of the requirements would also impose a heavy, unnecessary burden on 340B hospitals without providing useful data to understand the scope of the program."

    "Congress created the 340B drug pricing program to help safety net providers that serve low-income patients," she concluded. "We look forward to discussing this proposal, and others, with members of Congress, as we look for ways to ensure the 340B program continues to meet its critical mission."

    These are some of our concerns about H.R. 5598:

    • Eligibility for participation in 340B is currently based on a hospital's inpatient DSH percentage. The bill's focus on outpatient measures could signal a complete overhaul of current 340B hospital eligibility requirements.

    • The bill would require data from only 340B hospitals-and as such would not demonstrate how 340B hospitals compare with non-340B hospitals.

    • The bill would determine a 340B hospital's low-income utilization rate by looking at Medicaid outpatient revenue and outpatient charity care. Charity care is a problematic metric and not indicative of a hospital's level of care to low-income patients.

    • It would be difficult for hospitals to collect this information on an individual child-site basis. Moreover, child sites themselves are considered to be an integral part of the covered entity.

    H.R. 5598 is the fourth bill to be introduced during the current Congress that would make changes to the 340B program statute enacted in 1992. Other bills include:

    • S. 2453 - Sen. Chuck Grassley's (R-Iowa) Ensuring the Value of the 340B Program Act of 2018

    • S. 2312 - Sen. Bill Cassidy's (R-La.) Helping Ensure Low-Income Patients have Access to Care and Treatment (HELP) Act

    • H.R. 4710 - Rep. Larry Bucshon's (R-Ind.) 340B Protecting Access for Underserved and Safety-Net Entities Act (PAUSE)

    Rep. Carter's bill may not be the final word on the 340B program this year. Additional hearings are expected this year in both the House and Senate.