Healthcare Finance News / February 2, 2015

Tomorrow's 340B: Accountability, growth and transparency for the

covered entity

Reducing or eliminating 340B could cripple safety net providers across

the country.

By Jeffrey Lewis, Institute for Healthcare Innovation

Over the last two decades, Republicans and Democrats jointly supported legislation to

expand 340B, the federal program that provides significant discounts on high cost,

life-sustaining outpatient drugs to hospitals that serve a disproportionate share of low-

income patients.

As Congress re-examines the Medicare Disproportionate Share Hospital (DSH)

payment program, which in many ways keeps lights on and doors open for safety net

hospitals and clinics that provide free or low cost care, lawmakers have a chance to

strengthen these providers’ ability to serve disadvantaged communities. At a time

when Medicaid and Medicare reimbursement rates continue to shrink, reducing or

eliminating 340B could cripple safety net providers across the U.S.

[Also: Providers score in DSH challenge]

Without a strong and vibrant 340B program, safety net providers may not be able to

afford high-priced medications developed by pharmaceutical manufacturers to address

the growing needs of chronically ill Americans. Many patients with hepatitis C,

HIV/AIDS, COPD, multiple sclerosis and asthma, for example, would have to go

without lifesaving medications. The challenge, indeed the opportunity, is to create a

solution that modernizes the existing 340B infrastructure.

Hospitals and clinics benefiting from 340B deliver high quality care to patients who

often represent truly complex medical cases. These patients are increasingly served in

outpatient settings, where 340B drug discounts offset costs that support safety net

providers. Some researchers argue this change has been a deliberate attempt to

generate revenue. The truth is that smart business practices and wise clinical strategies

continue to move more specialty care to lower cost outpatient settings.

Follow Healthcare Finance on Twitter and LinkedIn.

The 340B program will continue to attract scrutiny because both political parties are

asking questions about its value and viability. Even though the program does not

utilize taxpayer dollars to provide its deep discounts, federal and state elected officials

require assurance that covered entities meet or exceed compliance and audit

requirements.

Covered entities should do their best to implement more transparent community

benefit programs that explain how 340B program savings are used and whom it

benefits. As more and more elected officials begin asking to see the 340B program’s

return on investment, covered entities must be in a position to respond.

The challenge is to use Congressional oversight to explore the value of the program

and explain in public hearings and on the floor of the House and Senate that the

program needs to be bolstered. Town Hall Meetings should be held all across

America, where Federally Qualified Health Centers, Disproportionate Share Hospitals

(that often reside in America’s toughest neighborhoods) and rural clinics have helped

keep communities alive by providing needed medical care.

Because the Health Resources and Services Administration (HRSA) has increased and

intensified 340B oversight by mounting onsite audits, covered entities face further

challenges. In an effort to protect these entities, and presuming that Congress will

continue to have great interest in these matters, the following questions should be

considered and addressed:

What tools should a covered entity have to audit as well as to optimize its 340B

program?

How does a covered entity ensure it is capturing all possible “locked away”

specialty prescriptions?

How are covered entities ensuring their 340B strategies include sophisticated

claims administration for maximum 340B prescription identification, specialty

pharmacy dispensing capability and coordination with health plans?

What steps should covered entities take to emphasize the impact of the

community benefit they provide as a direct result of 340B?

What are some best practices for providers, health plans and pharmacies in

working together to help themselves and the patients they serve?

What else should covered entities do to ensure appropriate utilization and

management relative to 340B?

Many covered entities are at the forefront of change. To maintain that leadership

position, greater transparency, improved methodologies for identifying and capturing

340B prescriptions, partnering with lawmakers to ensure laws and regulations that

effectively address everyone’s concerns make sense.

Covered entities have led the health care revolution. Most importantly, covered

entities must sustain and grow their services to help more Americans in need. When

Congress finally recognizes and values this, and decides to work with them to increase

access for every person living in the United States, real progress will be made.

The road less traveled to a strong 340B program goes in both directions.

Congressional leaders with real courage and commitment, will walk this road with

covered entities; not alone.

Jeffrey Lewis is the president of the Institute for Healthcare Innovation

(jeffrey@institute.bz)