340B Spotlight: New pieces of legislation continue momentum to fix 340B program

In case you missed it, two new pieces of legislation have been introduced to increase oversight of and fix the 340B program. Before the holidays, Representatives Larry Bucshon and Scott Peters introduced the 340B PAUSE Act, and just this week, Senator Bill Cassidy introduced the HELP ACT. These pieces of legislation would pause the enrollment of new disproportionate share hospitals (DSH hospitals) and their new offsite outpatient facilities and put much needed reporting requirements in place for many hospitals participating in the program.

Specifically, the 340B PAUSE Act and the HELP ACT would:

• Pause the enrollment of new DSH hospitals and registration of any new offsite outpatient facilities of these hospitals for two years from the date of enactment (exempting hospitals with rural designations and grantees like Ryan White clinics and hemophilia treatment centers).
  
  
• Impose reporting requirements on DSH, cancer and children’s hospitals that will increase transparency on how the program is used. For example, hospitals will report the insurance status of patients who receive 340B medicines and will report how much charity care is provided at outpatient clinics that participate in 340B.
  
  
• Increase transparency of the newly reported data by making most data publicly available.
  
  
• Strengthen government oversight with Government Accountability Office (GAO) and Office of Inspector General (OIG) reports on key areas in need of reform, including the government contracts that certain private DSH hospitals use to help qualify for 340B.

In addition to the above, the HELP ACT would:

• Implement clear eligibility standards for private DSH, children’s and cancer hospitals and their offsite outpatient facilities.
  
  
• Create a claims modifier to make it easier to identify and prevent duplicate discounts.

By freezing the new addition of some 340B entities, the bills would give Congress and the Health Resources and Services Administration an opportunity to thoroughly review the program to determine whether it is meeting its original intent – and there is a lot of evidence out there that 340B isn’t. 

Each year, the program continues to expand despite declining rates of uncompensated care. Analysis of government data shows that 340B hospitals now account for about one-third of all Medicare Part B sales of certain types of cancer treatments. Researchers have also found that “Since 2010, the program has expanded at an average annual growth rate of 21 percent and has grown by 125 percent in the last three years alone” – meaning the program has been growing faster than overall outpatient pharmaceutical sales. This growth comes at the same time that GAO and independent economists have suggested 340B is increasing out-of-pocket costs for patients, exacerbating trends in health care consolidation and shifting care to more expensive settings, which costs taxpayers more money.

340B is an important program for uninsured, vulnerable patients and the providers dedicated to treating them, but there is a lot of data demonstrating how the program has gone off course. Congress should pass the 340B PAUSE Act and the HELP ACT so that policymakers can work to fix 340B and ensure patients are benefiting from the program.

Learn more at PhRMA.org/340B.