340B Insight

We often receive listener questions about 340B issues and developments that affect professionals in the 340B world. In this episode, we open the listener virtual mailbag and answer some of your questions with help from our 340B Health staff experts. Some of the questions we tackle include queries about mitigating 340B contract pharmacy restrictions, understanding 340B patient definition, analyzing current 340B hospital audit trends, and examining Medicare Advantage payment rates for 340B drugs.

Show Notes

We often receive listener questions about 340B issues and developments that affect professionals in the 340B world. In this episode, we open the listener virtual mailbag and answer some of your questions with help from our 340B Health staff experts. Some of the questions we tackle include queries about mitigating 340B contract pharmacy restrictions, understanding 340B patient definition, analyzing current 340B hospital audit trends, and examining Medicare Advantage payment rates for 340B drugs. 

Mitigating Contract Pharmacy Restrictions 
In response to a listener's question, we discuss ways 340B hospitals can access program savings despite contract pharmacy restrictions. We share data about the amount of 340B savings restored to 340B hospitals when they apply for drug company exceptions.

Hospital 340B Audit Trends 
For one listener question, we recap the most recent data on hospital 340B audit results and identify the most common audit finding.

The Impact of Medicare 340B Payment Policy on Medicare Advantage Rates
A listener asks how Medicare Advantage plans are responding to the restoration of full Medicare Part B payment rates for 340B drugs. We discuss what we know and what remains uncertain.

Check out all our episodes on the 340B Insight podcast website. You also can stay updated on all 340B Health news and information by visiting our homepage. If you have any questions you would like us to cover in this podcast, email us at podcast@340bhealth.org.

Resources

  1. 340B Hospitals Report Receiving Full Payments for 2022 Part B Drug Claims After Adjustment Requests 
  2. 340B Coalition Winter Conference 2023 

Creators & Guests

Host
Myles Goldman
Writer
Cassidy Butler
Editor
Ismael Balderas Wong
Producer
Laura Krebs

What is 340B Insight?

340B Insight provides members and supporters of 340B Health with timely updates and discussions about the 340B drug pricing program. The podcast helps listeners stay current with and learn more about 340B to help them serve their patients and communities and remain compliant. We publish new episodes twice a month, with news reports and in-depth interviews with leading health care practitioners, policy and legal experts, public policymakers, and our expert staff.

Speaker 1:
Welcome to 340B Insight from 340B Health.

David Glendinning:
Hello, from Washington D.C. And welcome back to 340B Insight, the podcast about the 340B Drug Pricing program. I'm David Glendinning with 340B Health. We have heard from scorers of guests on the podcast since we launched it in May 2020, and today we're going to hear from you, the listeners. We diligently review all the comments and ideas that you emailed to us, and several of our episodes have been the result of you bringing us topics that we have not yet considered, and amid all that mail we also receive questions from listeners about 340B issues and about other developments that might affect those in the 340B world. Today, we're going to answer several of those questions for you, but before we go to the listener virtual mail bag, let's take a minute to cover some of the latest news about 340B.
Earlier this month, a federal judge in Washington DC rejected a motion from hospital associations seeking immediate repayment of Medicare outpatient drug payment cuts to many 340B hospitals that first took effect in 2018. As you know, the US Supreme Court unanimously ruled last June that those payment reductions were unlawful, and the Lower D.C. Court subsequently ordered the immediate restoration of full payment rates to 340B hospitals, a change that took effect in late September. But that development did not settle the issue of remedies for hospitals that sustained cuts in prior years, and now it is clear those hospitals will be waiting longer to find out how the government plans to repay them.
The D.C. judge said ordering immediate repayment would be, quote, "highly disruptive," end quote, to the Medicare payment system. He also noted that Medicare officials have said they will issue a proposed rule in the coming months that will lay out their planned remedies for hospitals. 340B Health members can read more analysis by visiting the show notes. And now for our answers to some of the listener questions that we have received recently, the staff on the 340B Health government relations, and legal and policy teams bring a wealth of expertise to the table on all things 340B, so we had our own Miles Goldman speak with some of these staff members for the answers to your questions, and he joins us now. Miles, I know you've said this to many of guests since we started the podcast and now it's your turn to hear it. Welcome to 340B Insight.

Miles Goldman:
Thanks, David. It's good to be in a direct conversation with you after doing this for 65 episodes.

David Glendinning:
Absolutely, so let's get right to it. So first question for you, and it will be about a topic that we've both discussed many times since the podcast started. With the continued rise in contract pharmacy restrictions, are there ways 340B hospitals still can access the 340B savings we need for patient care?

Miles Goldman:
Well, David, for this first question I spoke with Gilda Yeboah, who's a Senior Manager of Pharmacy Services here at 340B Health. Hospitals have several options they can potentially consider, and Gilda wanted to highlight a few of them for us. To start with, hospitals can apply for exceptions from the drug companies that offer them, and there's a couple of different examples here I'm going to walk through based on what Gilda told me. The first is that some manufacturers have allowed designating a pharmacy that is wholly owned by a covered entity or where the pharmacy is under common ownership. Another example of an exemption is hospitals without an in-house pharmacy are dispensing 340B drugs, can sometimes designate a single contract pharmacy to continue receiving shipments of 340B discounted drugs, and 340B Health has some interesting data on hospitals' effort to request exemptions that I think is really interesting when hospitals are thinking about this.
The amount restored through exemptions varies considerably by hospital with some smaller hospitals reporting as much as three quarters of their revenue restored for a single manufacturer, but others are receiving no more than 10% restored for any manufacturer. And some of the reasons we think there are differences might relate to the size of the contract pharmacy network, the portion of revenue related to specialty drugs which may be dispensed by a smaller number of contract pharmacies and other facility and market factors, so we've covered the exemptions, but another option Gilda wanted to point out is that some drug companies require hospitals to submit claims data for drugs dispense at contract pharmacies as a condition of receiving 340B pricing.
And of course, as we've discussed, David, on this podcast many times at this point, 340B Health and the Department of Health and Human Services agree these restrictions and conditions are unlawful, and the claims submissions process is also problematic. For instance, 340B Health has heard of hospitals who have been submitting data, but the drug companies have not fully restored the 340B pricing, and they found that very frustrating. The bottom line to this conversation about finding ways to sell access to 340B savings despite the restrictions is that these are just a couple of options. What Gilda has shared with me here, 340B Health recommends hospitals consult legal counsel to evaluate these options including before determining whether to apply for exceptions or to submit claims data.

David Glendinning:
Well, thank you, Miles. And I know from working on our weekly member bulletin that we frequently recommend that hospitals consult legal counsel before making decisions like that, always a good idea. Next question comes from a listener who says, "I'm new to working on 340B. Can you explain 340B patient definition for me?"

Miles Goldman:
Well David, there's a couple of sources that we really have to think about with this question, and in terms of our staff expertise, I went to Eliza Bangit who is our Senior Vice President of Legal and Policy. Eliza first pointed me to the 340 statute, which says that covered entities cannot resell or transfer a 340B drug to a person that is not a patient of the entity, but the statute after that is silent. It doesn't say anything else other than that point, so then we have to look to HRSA's 1996 Patient Definition Guidance for compliance. HRSA still uses this guidance in audits, and so the guidance lists three items to look at when determining if a patient is 340B eligible. First, it defines an individual as a patient of a 340B covered entity if the entity has established a relationship with the individual by having records of the individual's healthcare. Second, to be considered a patient, the individual receives healthcare services from a healthcare professional who is either employed by the covered entity or provides healthcare under contractual or other arrangements so that the responsibility for the care provided remains with the covered entity.
And then third, an individual's not considered a patient if the only healthcare service received is the dispensing of a drug for subsequent self-administration or if administration is done in the home setting. So this question about patient definition is really a big question within when we're talking about 340B operations and compliance, and one of the biggest takeaways that Eliza wanted to emphasize here is that there are many nuances to patient definition, and that HRSA is enforcing patient definition as I mentioned before, through audits using the 1996 Guidelines.

David Glendinning:
Yes, and I know when it comes to nuance, our staff are always here to help our member hospitals and health systems sort out all those nuances. So the next question is about federal audits which you just mentioned. What are the three 40 hospital audit findings looking like for 2022, and did the results tell us anything about what the auditors are focusing on?

Miles Goldman:
So I walked down the hall from my office, David, and I spoke with Rebecca Swartz, who's our Senior Manager of Policy and Compliance. And Rebecca does a great job for us tracking audit results that are coming in, and so she told me that both diversion and Medicaid duplicate discount audit findings continue to decline in fiscal year 2022. Diversion was found in only 7% of hospital audit results, and duplicate discounts were found in only 11% of hospital audit results. And this continues the trend of diversion findings falling since fiscal year 2015, and duplicate discount findings falling since fiscal year 2019. The most common findings in audit results are errors in the information hospitals have listed for themselves in HRSA's Office of Pharmacy Affairs Information System or as it's known OPAIS.

David Glendinning:
Yes. OPAIS, just one of the many acronyms that 340B hospitals and all of us have to be aware of. The next question is a legislative one. So one of our listeners asks, "I've read that many states have enacted 340B non-discrimination laws. What else can be done to fight discriminatory reimbursement?"

Miles Goldman:
Well, for this question, David, I turned to a 340B Health staff expert who should be very familiar to listeners of this podcast because she's been on a couple of times, and that would be Amanda Sellers Smith, who is our Legal Counsel. And Amanda told me that more than 20 states have passed 340B anti-discrimination laws to stop PBMs and payers from reimbursing providers less or putting other restrictions in place because of their 340B status, and that's been really great to see. The federal government does have the ability to prohibit 340B payment discrimination across the nation. In the previous Congress, the Bipartisan Protect 340 Act was introduced and gained more than a hundred co-sponsors from both sides of the political aisle, and 340B Health will be working with the new Congress, Amanda says, to reintroduce the Protect 340B Act, and then work with Congress to pass it.
And then as we work at the federal level, we simultaneously encourage 340B Health members in states that have not enacted non-discrimination legislation to share model legislation with your lawmakers that 340B Health worked on with the National Association of Community Health Centers to draft this model legislation. And Amanda says that members can use the model legislation to improve and strengthen existing state non-discrimination laws as well, so this model is really something you should take a look at if you haven't already, even if your state has already passed a non-discrimination law. And then it's important that members closely monitor how states implement and enforce non-discrimination laws to ensure their effectiveness, Amanda says.

David Glendinning:
Well, we are certainly glad to see that the number of states with non-discrimination laws is now well into the twenties, approaching that halfway mark, I suppose. We have more of an operations and compliance question next from one of our listeners. A listener asks, "My hospital wants to start a discount card program for patients with our 340B savings. Do you have any suggestions for how we can start this process?"

Miles Goldman:
It's a really interesting question, David, and I went to one of our staff experts who's deeply familiar with just on the ground operations in a hospital pharmacy, that would be Steve Miller who's our Vice President of Pharmacy Services. And Steve is hearing about many different approaches hospitals are taking to setting up a discount card program for patients using the hospital's 340B savings. He says it's important to partner with not only your pharmacy team, but also your IT operations team and legal team because it's critical to establish compliant and efficient processes early on so the discount card program works well for patients, which that's the point of these discount card programs, it is to provide assistance to patients.
And then Steve says that your 340B third party administrator TPA service provider may have a discount card program you can use, you should check to see what is already available, and ask if you can tweak it to accommodate your organization and patient needs. You're going to want to bring these teams to the table from the start, so that organization and coordination's really key here. One initial step to consider Steve says, is starting with implementing your discount card program with a single clinic because once a compliant and efficient processes in place at one clinic, it could be easier to establish the discount card for the patients at additional clinics.

David Glendinning:
Okay, thank you. So back to legislation with the next question. The question is, how does the delay in electing a speaker of the US House of Representatives affect 340B advocacy moving forward in this Congress?

Miles Goldman:
Well, David, the speaker vote here in D.C. certainly had everyone here in D.C. keeping an eye on that. I spoke to 340B Health's expert on all things Capitol Hill, that would be our Senior Vice President of Government Relations, Tom O'Donnell. And Tom noted that the speaker election took a few days longer than normal, which you obviously certainly may have also seen from the news, and there were moments of TV drama as we saw, but a 118th Congress has started working on legislation across the overall big picture policy spectrum. New committee chairs have been named in both the House and Senate that are important for 340B policy debates, and Tom says, now is the time for hospitals to be ramping up 340B advocacy for this Congress, and he goes into specifics here. He says that hospitals should complete or update their 340B impact profile, and this impact profile serves as the foundation for all of your 340B advocacy work, he emphasizes.
You also should be working with your hospital's Government Relations team to schedule meetings with your members of Congress and their staff. Tom says that members of Congress also are scheduled to be working in their districts for periods in February, March and April, so in addition to being here in D.C. they're spending plenty of time back home doing important policy work as well, and Tom recommends using these opportunities when they're back home in your district to invite members of Congress and their staff to tour your 340B hospitals. These site visits are some of the most effective ways to engage in 340B advocacy because members of Congress can see for themselves how 340B benefits their constituents. And Tom wanted to note that 340B Health has a step-by-step guide on how to organize in-district visits. He encourages all of our 340B Health member listeners to refer to this. You can always of course, reach out to him with questions as well.

David Glendinning:
Well, Miles, I know many of us here in D.C. were glued to C-SPAN during the speaker drama, and those of us in the advocacy world are glad Congress is getting down to the business of legislating again. Final question for us, now that Medicare has restored the full reimbursement rate for 340B drugs in 2023, are Medicare Advantage plans doing the same? And just in addition to that question, what recourse do hospitals have for repayment from Medicare private plans that have cut their payments in the past?

Miles Goldman:
We've been hearing that question not just from listeners, but just overall from members reaching out to us in other ways as well, and for this one, I went to another Amanda in our office. As many may know, we have two members of our team on our Legal and Policy team, both named Amanda for this one I spoke with Amanda Nagrotsky who's our Senior Counsel. And Amanda says the answer to this question can depend on whether there's a contractual relationship between the plan and the provider, and by law, payments by Medicare Advantage plans to non-contracted providers are tied to the amounts that traditional Medicare pays. CMS, the Centers for Medicare and Medicaid services in a series of FAQs published in 2018 an FAQ, specifically clarifying how the traditional Medicare cuts would apply to payments by Medicare Advantage plans, and within that CMS it said, it couldn't interfere with payments to contracted providers, but that payments to non-contracted providers would be reduced under the law at that time.
Some Medicare Advantage plans also have ridden on their own payment reductions for 340B drug claims into their contracts with hospitals. 340B Health has opposed these payment reductions by Medicare Advantage plans and the negative precedent established by CMS's payment reductions that have resulted in payer policies that redirect the benefit of 340B to for-profit insurers instead of the safety net hospitals for which it's intended. And now of course, we fast forward to current day and CMS's paying 340B hospitals again at ASP plus 6% for fee for service Part B drugs. Non-contracted Medicare Advantage plans must pay the same rate here in 2023. So David 340B Health and hospitals are looking into whether Medicare Advantage plans are legally required to implement adjustments for payments to non-contracted providers for 2022 Medicare Part B claims. We've already seen Medicare administrative contractors have been doing this for fee for service claims following a district court's decision to vacate the 2022 Part B cuts.
And David, as you noted in the news update segment, we are also awaiting guidance from CMS that the agency says it will publish this spring regarding repayments for Part B drug payment reductions to 340B hospitals following last year's Supreme Court ruling that the 2018 and 2019 cuts were unlawful, so that's a lot to think about right there. And Amanda says that in the meantime, as we're waiting a little bit to continue to analyze this and wait for more information, Amanda recommends hospitals consult with their legal counsel and payer contracting teams to assess whether and how to pursue adjustments for past Medicare Advantage claims. David, members are definitely going to want to stay tuned not only to our podcast, but to the weekly bulletin as well for more information as this issue continues to develop.

David Glendinning:
Good advice all. Well Miles, it is nice to be sitting across from you in the podcast booth at long last, and I enjoyed the conversation and I know our listeners did too. So thank you again for all your work collecting these questions and chasing down all the experts.

Miles Goldman:
Well, thanks for having me, David.

David Glendinning:
And we thank Gilda, Eliza, Rebecca, Amanda Sellers Smith, Steve, Tom and Amanda Nagrotsky for taking the time to provide us and all our listeners with their expertise. Do you have additional questions about 340B or episode ideas of your own? As always, we welcome your emails at podcast@340bhealth.org, so please keep them coming. And please plan to attend the 340B Coalition Winter Conference in San Diego from March 27th through March 29th. The conference is crucial for keeping up to date on all the latest in the 340B world with more than 40 sessions and eight hours of networking, and by attending you also will have the chance to see us in action in our podcast booth in the conference exhibit hall. The early bird registration deadline for the conference is January 30th, so if you've not already registered, please visit the link in the show notes to sign up today, and we will be back in a few weeks with our next episode. In the meantime, as always, thanks for listening and to be well.

Speaker 1:
Thanks for listening to 340B Insight. Subscribe and rate us on Apple Podcasts, Google Play, Spotify or wherever you listen to podcasts. For more information, visit our website at 340bpodcast.org. You can also follow us on Twitter @340BHealth and submit a question or idea to the show by emailing us at podcast@340bhealth.org.