House to consider bills that would define 340B-eligible patients

The odds in Congress' big-money fight over 340B drug discounts are shifting against hospitals with a soon-to-be-introduced package of bills that would limit the patients qualifying for the discount and expand reporting requirements for how hospitals use the dollars.

Rep. Chris Collins, a New York Republican and ardent critic of the recent 340B expansion, spearheaded the legislation that is now getting split up into six or eight different bills all geared toward an overhaul of the 340B program, and supported by his party's leadership on the key House committee of jurisdiction.

"We're going to move this very quickly," Collins said Wednesday. "This is not going to stall out for six months or something."

Collins described the parceling out of the legislation as the "the final crunch" for legislation that would impose user fees on hospitals that participate in the program and increase reporting requirements.

Collins said he plans to sponsor a crucial piece of the package, which is known as "patient definition." This ties the drug manufacturer discounts to uninsured patients only.

The prospect has 340B hospitals on edge because patient definition amounts to a direct hit on their ledgers, whose spread of the drug discounts often funnels into safety-net care and outreach programs.

House Energy and Commerce Committee Chair Greg Walden (R-Ore.) praised Collins as an important player in 340B reforms.

"We're trying to find where the sweet spot is, going forward with legislation," Walden said as he noted not all Republicans on the committee agree with how Congress should move forward with statutory changes.

The Energy and Commerce Committee will bring the 340B-related bills up for consideration as soon as February, Walden said, and a senior GOP aide said Republicans want to tackle 340B reforms as part of their unfinished healthcare business they plan to wrap up the first half of this year.

Hospitals that use the 340B money to run their safety-net programs are blasting the congressional effort as premature and argue that Congress needs to tread more cautiously and slowly before writing law that would drastically change how the program is currently used to fund efforts to expand healthcare outreach and options for poor patients.

"If Energy & Commerce believes 340B should be about the uninsured, that's a rewrite of the program," one hospital lobbyist said.

Hospital officials argue that lawmakers should leverage their existing oversight authority to enforce the rules already put in place by the Health Resources and Services Administration , which has jurisdiction over 340B. HRSA, hospitals argue, can stop misuse of 340B dollars already.

"There's good documentation on the program and what you have to do to support how you're spending the dollars," said Connie Prewitt, chief financial officer of the Billings (Mont.) Clinic, an integrated health system that draws patients from a vast geographic area and directs 340B dollars to assistance programs for about 8,700 underinsured and uninsured patients.

"Our stance has been, it's helpful to enforce program rules instead of just taking it away from everyone," Prewitt said. "Hold some health systems accountable for how they're using the dollars. What about the reinforcement of how the 340B program is being used before cutting the dollars?"

If Congress narrows the scope of the discounts, hospitals warn the programs largely funded through the 340B discount dollars will also shrink.

Collins' specific legislation hasn't been released yet, but Prewitt argues the recurring idea of patient definition, which represents the core of his proposal, would lead to a drastic scale-back of the clinic's assistance efforts.

"As the program is limited to very specific patients, if you narrow down who we serve, we would have to narrow down the programs we actually offer," Prewitt said.

Leadership support for Collins' pending bill notches another victory for drug companies in their escalating conflict with 340B hospitals.

Chatter about potential program reforms picked up last summer and in November translated into executive action when the Trump administration released its proposed Medicare payment rule. This CMS rule took aim at the program with $1.6 billion in cuts to Medicare reimbursements for 340B hospitals that went into effect Jan. 1.

A federal judge in late December tossed the lawsuit spearheaded by the American Hospital Association that sought an injunction against HHS' implementation of the cuts—a decision the AHA has appealed.

As pharmaceutical companies launched advertising campaigns and a big lobbying effort on Capitol Hill to push program oversight measurements, more than 160 House lawmakers from both sides of the aisle scrambled to block HHS' cuts legislatively before Christmas—an effort backed by hospital groups.

Rep. David McKinley (R-W.Va.) led the effort and likened it at the time to "stirring a hornets' nest."

Meanwhile House GOP leadership has pointedly steered the conversation toward curbing the program with a report released last week by the House Energy and Commerce Republicans out of the Oversight and Investigations Subcommittee.

The report state that HRSA needs to step up its regulation of the program as much as it has the authority to do. Weaknesses in HRSA's regulatory authority under current law need to be fixed, the report adds.

Its authors say Congress never adequately defined its intent for the program, and they recommend clarifying the regulations to designate how the discount dollars should be used.

This latter argument hits on the core argument from pharmaceutical manufacturers and some lawmakers that the scope of 340B has expanded far beyond what Congress designed it to look like 25 years ago.

A nascent effort to curb 340B expansion has started in the Senate.

On Wednesday, Sen. Bill Cassidy (R-La.) introduced a bill that would impose a moratorium on enrolling any new hospitals in 340B that aren't in rural areas.

The bill would also launch federal rulemaking and regulations to define hospital reporting requirements and mandate clear chronicling of where the dollars go. The bill would not prescribe how hospitals should spend the money, a legislative aide for Cassidy said.

Federal 340B grantee hospitals and rural and critical-access hospitals wouldn't need to follow the proposed new reporting requirements. The moratorium also wouldn't apply to critical-access hospitals, rural referral centers, sole community hospitals, grantees and other exempt clinics.

Unlike the Collins legislation, the bill—reported Wednesday to the Senate health committee—doesn't yet have a clear path through the upper chamber.

An edited version of this story can also be found in Modern Healthcare's Jan. 22 print edition.