Washington Update, February 2020

Washington Update

Governmental Food Fight: GAO and CMS Sling 340B Related Publications Back-and-Forth
By Elizabeth Karan

For policy wonks watching the 340B Program, 2020 began with an exciting series of reports released from the federal government. Although often long and boring, publications like these can alter policy and provide insight into future changes.

First, on January 8, 2020, the Center for Medicaid and CHIP Services (CMCS), within the Centers for Medicare and Medicaid Services (CMS), released an informational bulletin identifying best practices for states for the prevention of duplicate discounts in Medicaid (the “Informational Bulletin”). Mostly, the Informational Bulletin reiterates things that we know which are established in law. The Informational Bulletin also describes seven best practices for avoiding duplicate discounts in Medicaid. Again, these best practices are not new and commonly used practices for the prevention of duplicate discounts in the 340B Program. Likely, the Informational Bulletin was a preemptive rebuttal to another government report discussed below.

On January 10, 2020, the Government Accountability Office (GAO) released a report targeting 340B hospitals, indicating that increased oversight is needed of 340B eligibility requirements for hospitals. (The GAO functions as a “congressional watchdog” and monitors how taxpayer dollars are spent.) The GAO stated that approximately 1700 hospitals participate in the 340B Program as nongovernmental hospitals, which qualify for the program, in part, by having contracts with state or local governments to provide health care services to specified low-income populations. The GAO’s review of 258 contracts from nongovernmental hospitals found that most contracts contained this requirement but few details, such as the amount or type of care to be provided. The GAO made six recommendations to increase oversight of contracts by Health Resources and Services Administration (HRSA), including: requiring submission and review of appropriate contract documentation; reviewing validity of contracts and terms; and increasing training and oversight of the requirement in Office of Pharmacy Affairs (OPA) audits. At the 340B Coalition Winter Conference earlier this month, Admiral Pedley of OPA announced that OPA would begin reviewing these contract terms more closely.

On January 27, 2020, GAO released a second report examining oversight of duplicate discounts in the 340B Program. GAO reviewed documentation on preventing duplicate discounts, including federal policies and those from all 50 states and Washington, D.C. GAO also interviewed officials from CMS, HRSA, and 16 covered entities from four states. GAO found that CMS conducted limited oversight of state Medicaid programs’ efforts to prevent duplicate discounts. Additionally, GAO stated that CMS does not have the information needed to effectively ensure that states exclude 340B drugs from Medicaid rebate requests. GAO indicated that HRSA: (1) does not review states’ policies and procedures for the use and identification of 340B drugs; and (2) had not issued guidance on, and did not audit for, duplicate discounts in Medicaid managed care. Additionally, GAO noted that, in Medicaid managed care, HRSA does not require covered entities to address duplicate discounts or work with manufacturers to repay them. As a result, GAO recommended that CMS ensure that state Medicaid programs have written policies and procedures that are designed to prevent duplicate discounts and forgone rebates. GAO also stated that HRSA should incorporate covered entities’ compliance with state policies into its audits, and require covered entities to work with manufacturers regarding repayment of identified duplicate discounts in Medicaid managed care.

Reports are not binding. However, as Admiral Pedley’s announcement at the 340B Conference makes clear, they can impact policy. We expect that this is not the end of 340B Program oversight activities by CMS, GAO, or OPA and encourage you to stay informed, even when it involves getting messy.

Also in this Issue…

Notes from Joe
· How Did We Get Here and Where Are We Going?

Alliance Update
· The More the Merrier: HTCs and Patients Wanted For Hill Day
· May Meeting for NEW HTC Staff
· Join us for an Informative Meeting at HTRS/THSNA in April
· 2020 Meeting Schedule

Payer Update

Notes from the Community
· University of Michigan Launches Infusion U Program