Hospitals fear they’ll lose if Congress limits 340B-eligible patients

GOP lawmakers are poised to make their most significant moves yet toward overhauling the 340B drug discount program. Up to eight different bills aimed at limiting the number of patients who qualify for the program are slated to make their way through Congress.

Rep. Chris Collins, a New York Republican and ardent critic of the recent 340B expansion, is spearheading part of the legislative push, saying he plans to sponsor a crucial piece of the package known as “patient definition.” This ties the drug manufacturer discounts to uninsured patients only.

“We’re going to move this very quickly,” Collins said last week.

The prospect worries executives at 340B hospitals, who say patient definition amounts to a direct hit on their ledgers. Such providers often funnel the savings generated by the drug discounts into safety-net care and outreach programs. “If the Energy and Commerce Committee 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.

“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 in 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.

Collins’ specific legislation hasn’t been released yet, but Prewitt argued the recurring idea of patient definition, which represents the core of the proposal, would lead to a drastic scale-back of her clinic’s assistance efforts. “As the program is limited to very specific patients, if we narrow down who we serve, we would have to narrow down the programs we actually offer,” she said.

A scaling-back of the program has been at the heart of a debate over 340B that has gone on for several years. Critics, led by drug companies, argue it has expanded well beyond its intended scope, which has led to abuse and a lack of oversight.

Chatter about potential program reforms last summer and in November translated into executive action when the Trump administration proposed $1.6 billion in cuts to Medicare reimbursements for 340B hospitals that went into effect Jan. 1.

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

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

Meanwhile, House GOP leadership has pointedly steered the conversation toward curbing the program. A report released this month week by Republicans on an Energy and Commerce subcommittee called for fixes in what it cited as weaknesses in HRSA’s regulatory authority under the current law.

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.

A nascent effort to curb 340B expansion has started in the Senate. Sen. Bill Cassidy (R-La.) introduced a bill to impose a moratorium on enrolling any new hospitals 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 Cassidy legislative aide 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 doesn’t yet have a clear path through

● the upper chamber.

Legislation worries executives at 340B hospitals, who say patient definition amounts to a direct hit on their ledgers.