340B program likely to face significant changes in coming years

The 340B drug program for safety-net hospitals will likely undergo significant changes in the coming months as the result of a new "mega-guidance" soon to-be-published by the Health Resources Services Administration (HSRA), which oversees the program.

However, the contents of the guidance remained a little bit of a mystery, according to officials with 340B Health, the program's primary lobbying group, who spoke at this week's Healthcare Financial Management Association's annual national institute in Orlando, Florida.

Meanwhile, the lobbying group has had to fend off potential legislative changes to the program, as criticism of 340B has been mounting in recent years, according to Ted Slafsky, 340B Health's chief executive officer. 

Congress held its first hearing on the program in more than a decade earlier this year, he added, noting that lawmakers may want to make significant changes to the law. The group was able to lobby to get some changes to the program dropped from a bill that would have limited how much low-income patients could be charged for drugs and increased audits of hospitals, according to Maureen Testoni, 340B Health's general counsel. That language was originally included in a bill known as 21st Century Cures, which was intended to streamline the drug approval process in the U.S.

The 340B program, which was created in the early 1990s, came under scrutiny two years ago when media reports surfaced of hospitals in North Carolina reaping substantial profits by reselling the drugs at full price after purchasing them at a discount.

"We're asking Congress to let HRSA move forward with their...mega-guidance," Slafsky said, noting that it would cover "all the hot button issues." He added that his organization had to work to get the Tennessee General Assembly from adopting a resolution that would have asked the U.S. Congress to investigate potential abuses in program.

HRSA last week did propose a price ceiling for drugs, and that civil penalties be imposed on manufacturers that overcharge for drugs. That rule has yet to be formalized.

The new guidance from HRSA is expected to be published in the Federal Register by this September, with a comment period likely to take several months after its publication, according to Slafsky. Final adoption is not expected until early 2016.

Testoni observed that some of the guidance "will be formalizing old stuff," but it may also make key changes, such as determining who is eligible to participate in the program.

She noted that the mega guidance from HRSA will likely spell out minimal charity care requirements for participating hospitals, and some narrowing of the drugs that could qualify for 340B coverage.

"The bottom line is even regulations that are informal could have a big impact on your hospital," she said. 

Slafsky is concerned that there could be changes to the program that would allow only the "uninsured indigent" to participate, which would put a big burden on hospitals to make case-by-case eligibility determinations.