Some safety-net hospitals are concerned that delays of non-urgent procedures due to the COVID-19 pandemic could make some them ineligible for the 340B drug discount program.
The hospitals are concerned drastic changes in the number of patients coming through their doors could alter their payer mixes and temporarily change their 340B eligibility, so they are asking the Trump administration and Congress to protect them. Depending on the long-term economic impacts of the pandemic, there's also a chance that more facilities might become eligible if their Medicaid patients increase.
Hospitals don't have control over who walks through their door, and there's a chance that the volume changes could disqualify 340B disproportionate-share hospitals from discounts if the pandemic changes behaviors for long enough.
"That's the last thing they would want to worry about, making sure they meet eligibility criteria, and the resulting lost discounts and savings on top of the financial hardship of lost revenues," said Shahid Zaman, a principal policy analyst at America's Essential Hospitals.
A recent Kaiser Family Foundation analysis found that safety-net hospitals that served a higher proportion of Medicaid and uninsured patients were disadvantaged in the formula for distributing $50 billion in provider relief grants.
Eligibility for the 340B program is based on hospitals' annual cost reports, so there would likely be a delay before hospitals could be kicked out. But Zaman said HRSA could potentially claw back discounts after determinations are made later.
The demands have gained some traction with lawmakers. Sen. Ben Sasse (R-Neb.) in April introduced a bill to pause 340B redeterminations, and a bipartisan group of 121 House lawmakers asked congressional leadership to give hospitals extra flexibility in case their payer mixes change. However, the proposal was left out of House Democrats' fifth COVID-19 legislative package.
HRSA has some discretion over enforcement, Zaman said. So far, the agency has only said that hospitals concerned about their eligibility should reach out to Apexus, the 340B Prime Vendor, for technical assistance on a case-by-case basis.
The re-evaluations could come at staggered times, as hospitals operate on different fiscal year deadlines to file cost reports.
It's too early to tell, but there's also a chance the reverse could happen in the long term — higher Medicaid enrollment could make more facilities eligible. A Kaiser Family Foundation analysis released Wednesday found 12.7 million people will be eligible for Medicaid because they lost employer-sponsored insurance, and Georgetown University researchers have noted that states are beginning to see Medicaid enrollment increases in April.
"If more Medicaid patients are being treated in those units that could, in theory, make more hospitals eligible. However, given the postponement of so many inpatient procedures due to COVID-19, many 340B DSH hospitals are concerned about a different payer mix causing them to lose their 340B eligibility," said Maureen Testoni, the president and CEO of 340B Health.
But besides meeting the required disproportionate share adjustment, hospitals also have to meet a government control requirement. HRSA has not changed its eligibility criteria or amended its quarterly registration process.
