The 340B Drug Discount Program Faces New Regulations

New Health Resources and Services Administration (HRSA) regulations could limit certain hospitals from participating in the 340B drug discount program. If adopted, hospitals that treat disproportionally poor or uninsured patient populations are likely to suffer most.

“Of the issues to be addressed in the proposed regulation that is pending final review, the definition of who qualifies as a covered entity’s ‘patient’ (and thus is eligible for 340B-discounted drugs) is probably the most significant,” said Billy Wynne, JD, a partner at the Washington policy and lobbying firm Thorn Run Partners. “That draft guidance also carved out certain encounters as not constituting a close enough relationship between patient and provider to qualify for 340B discounts, such as certain case management services.”

The 340B program was designed to help safety-net hospitals cover the costs of treating large percentages of low-income individuals. However, pharmaceutical companies argue that the influx of health systems participating in the program have not resulted in improved care despite the cost savings. 340B offers hospitals and clinics up to 50% off certain outpatient medications.

Safety-net hospitals also recently received a 30% pay boost from CMS. The change in reimbursement was due to a mandate under the Affordable Care Act.

“The new payment system helps increase the ability and capacity of federally qualified health centers (FQHCs) to provide essential and affordable services for even more patients who need care,” said CMS Administrator Marilyn Tavenner. “These FQHCs are essential to countless patients in local communities who depend on them for getting their primary and preventive care.”

Around the Web

Expected 340B Drug Discount Rule May Tighten Program [Modern Healthcare]

The Coming Storm Over The 340B Rx Drug Discount Program [Health Affairs]

Medicare Finalizes 30% Pay Raise For Safety Net Clinics [Law360]