House lawmakers to discuss 340B legislation this week as tensions build
Big Pharma and hospitals are coming head-to-head over the 340B drug reimbursement program with substantial changes at stake.
Capitol Hill lawmakers who want to enact a moratorium on CMS' imminent Medicare payment cuts to 340B hospitals face mounting pressure to include reporting and transparency measures; the pressure comes from inside their ranks and from the drug industry.
According to a document obtained by Modern Healthcare, the measures being floated on Capitol Hill drastically alter reporting requirements for 340B hospitals.
Per the policy outline, each covered entity would have to report the percentage of people who receive 340B-discounted drugs sorted and totaled by insurance status, such as those on Medicaid, with private insurance and uninsured. The costs incurred for charity care would also be required.
Covered entities would have to report their total reimbursements for drugs purchased under 340B together with the sum of what they paid for the drugs.
And a disproportionate-share hospital eligible for 340B would have to submit its contract to the Health Resources and Services Administration for review and for inclusion in the public database.
A hospital lobbyist said she is worried these policies could quickly become law and fundamentally change the 340B program.
Tom Nickels, executive vice president of the American Hospital Association, said the group would oppose "any effort to implement a moratorium on 340B hospitals" in exchange for a delay to the CMS rule's Medicare cuts.
"Many small rural hospitals fluctuate in and out of the program based on changes to their patient mix," Nickels said. "These hospitals and the communities they serve could lose access to vital services."
A hospital lobbyist said in an interview that the Pharmaceutical Research and Manufacturers of America and the Biotechnology Innovation Organization are advocating these proposals. PhRMA has come out in strong support of the CMS' 340B cuts mandated by the hospital outpatient prospective payment rule.
A spokeswoman for the drug industry lobbying group declined to comment on the requirements.
U.S. Rep. Kathy Castor (D-Fla.), who has signed on to House legislation to block the cuts, says the push has caused sharp division on a program that has long had bipartisan support and warns that it may topple congressional efforts to act before the cuts take effect.
"Folks are going to be hesitant to re-open things legislatively with this new force out there—this new (organized effort) that I think wants to gut 340B," Castor said.
Separately, hospital industry representatives are seeking more information about the program from the CMS.
House lawmakers with strong feelings on both sides of the issue are meeting tomorrow to discuss a possible path forward, U.S. Reps. David McKinley (R-W.Va.) and Buddy Carter (R-Ga.) told Modern Healthcare.
McKinley, with California Democratic Rep. Mike Thompson, authored the House bill that would block the estimated $1.6 billion in annual Medicare cuts and new reporting requirements that would hit 340B hospitals once the outpatient prospective payment rule goes into effect in January.
Hospitals affected by the rule are lobbying hard against the changes. The American Hospital Association has filed for an injunction against the rule. Its case gets a hearing Thursday.
McKinley said he wants to make sure Congress takes action if the ruling doesn't favor hospitals, but time is running out as Congress races against the clock this week to avert a government shutdown while funding key programs. Congress is slated to leave for recess on Friday—although that may change depending on how the final spending package comes together. If the court rejects the injunction, lawmakers theoretically would have just one day to agree on a bill.
More than 140 House Democrats and Republicans have signed onto the McKinley-Thompson bill, and a powerhouse, bipartisan group of senators including Republicans John Thune of South Dakota, Rob Portman of Ohio and Shelley Moore Capito of West Virginia have also urged their leadership to make sure Congress at least acts to delay the cuts before the end of the year.
But underlying the bipartisan effort to stall the rule's impact on 340B hospitals is a mounting push for greater transparency of the 340B program as a whole. This has followed oversight hearings by the House Energy and Commerce Committee that led to lawmakers from both sides saying they want to take a deeper look at the program. But they disagree about where that deeper look should lead.
On the Senate side, Capito told Modern Healthcare she would be in favor of including new transparency measures as part of the moratorium to the outpatient prospective payment changes that she supports.
On the House side, the transparency talking points are raising alarm bells among some representatives of districts that rely on 340B hospitals. Castor said the tone of the discussion on 340B has been altered by those talking points.
"Something changed this year with the changing administration, the change in Congress," she told Modern Healthcare.
Castor adds that the Energy and Commerce Committee's 340B hearings earlier this year yielded productive ideas, but then "those bipartisan, commonsense discussions went out the window, and it's much more us versus them." (Castor excepted the lawmakers who support the McKinley-Thompson legislation.)
Castor attributes the mounting opposition to PhRMA.
"I think PhRMA has ramped up its opposition to 340B and kind of put a kibosh on a lot of the more commonsense, moderate reforms" to 340B, Castor says.
A PhRMA spokeperson told Modern Healthcare that the group is urging "fundamental change" to 340B that "helps get the program back on track and ensures patients are in fact the ones benefiting."
The changes PhRMA wants include reporting requirements.
"Before taking steps regarding this part of (the outpatient prospective payment) rule, Congress should consider how delaying implementation of the rule would increase out-of-pocket costs for many beneficiaries and whether the program is achieving its true intent," the spokesperson said.
Lawmakers' disagreements over 340B are substantial enough that Castor doesn't expect a legislative fix to the outpatient prospective payment rule.
"I'm afraid it's going to go to litigation," Castor says. "It will be challenged administratively and in the courts."
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.