At this time of year, many of us are looking back at 2019 and looking forward to 2020. As far as the 340B Program goes, although there was a lot of sabre rattling there were very few changes heading into 2020.
2019 Year in Review
Specific to FQHC’s, although 340B was mentioned in numerous pieces of legislation throughout the year no major 340B legislation materialized. Because drug pricing is such a high priority, the program remains a talking point however the legislative focus has shifted from 340B to the PBM’s
One of the biggest threats to 340B was not government related at all but rather the Pharmacy Benefit Industry (PBM) who has seen 340B as a threat to their rebate revenue stream. In late 2018, CVS Caremark, one of the country’s largest PBMs, sent notices to 340B providers and contract pharmacies notifying them of significant reductions in reimbursement rates. In essence they were attempting to recharacterize 340B pharmacy as non-retail pharmacies, which would allow CVS to reimburse these pharmacies at a much lower rate. After a considerable outcry from a large number of 340B stakeholders and court rulings related to the reduce Medicare payments to 340B Hospitals, CVS Caremark backtracked and announced that it was reversing its decision.
Also, in late 2018, a federal district judge struck down HHS’ proposed cuts of almost 30% to Medicare Part B reimbursements for 340B providers stating CMS overreached its legal authority. This decision, however, was appealed and cuts remain in place.
A final hearing was held on November 8th with a decision expected soon. If the government prevails, we may see Caremark (and other PBM’s) attempt to lower reimbursement for 340B providers.
340B Drug Pricing Website
April 1st, HRSA finally launched its 340B Drug Pricing website, which provides additional transparency and assists safety-net providers in determining the maximum price manufacturers can charge under the program. This implementation was driven by a 2010 law authorizing civil penalties for manufacturers who “knowingly and intentionally” overcharge covered entities. This should be accessible through the Covered Entity’s 340B PVP account.
On the audit front, HRSA suspended uploads of audit outcomes to its website during 2019. The audits continued but between June 21st and October 10th no audit outcomes were posted on HRSA’s website. HRSA states that it was reevaluating its level of authority and oversight of the program.
Looking Ahead to 2020
Focus of Attention
Drug pricing remains a focus of the Trump Administration as we enter the new year and most presidential candidates. This will keep a focus on the entire industry including 340B.
Rebates and Duplicate Discounts
The definition of “Medicaid” as it relates to 340B remains murky. At this time, HRSA only regulates Medicaid Fee-for-Service claims through the Medicaid Exclusion File located on the OPAIS. That said, it remains the covered entities responsibility to coordinate rebates/discounts with the state (which many states have not shown interest in doing).
Apexus provides a Medicaid profiles per State tool to assist entities in accurately billing Medicaid Fee-For-Service. The tool can be found at https://www.340bpvp.com/resource-center/medicaid.
Individual states have recently begun to get explore various forms of 340B legislation. Some of these initiatives are advantageous to covered entities while others have the potential to be very detrimental. Examples of these bills include:
- Prohibition of discriminatory 340B reimbursements while others are considering the adoption of
- Enhanced Medicaid billing procedures
- Mandatory 340B reporting regulations
Changes to HRSA policy and areas of focus can affect a covered entity’s policies and procedures, contracts, and many other areas of program oversight. RPh Innovations strives to keep up to date with what is happening with 340B, legislative and/or state involvement, HRSA changes, and other governmental and non-governmental organizations, to ensure covered entities are too. We suggest covered entities keep up to date on what is happening with proposed 340B legislation and sharing information gained with peers.
RPh Innovations offers many services to both its clients and to organizations such as HCAN and other state primary care associations such as:
- 340B Program support
- Independent, external audits
- Contract pharmacy processing services
- Summit and other educational presentations