340B Patient Definition Guidance Is Back Under Review

by admin | July 19, 2011 8:22 pm

 

July 19, 2011—The Health Resources and Services Administration’s (HRSA) proposed redefinition of the term “patient” for purposes of 340B discounts is “still under review” and could remain so for quite some time, Office of Pharmacy Affairs Director Krista Pedley announced last week during the 340B Coalition annual conference in Washington.

Noting that she is expecting a child by year’s end, Cmdr. Pedley quipped that “we’ll see which comes first — the baby or patient definition.”

Pedley did not elaborate on the reasons for the delay. The White House Office of Management and Budget (OMB) finished its review of the proposed guidance[1] in early May and sent it back to HRSA with unspecified changes. Many stakeholders had expected that it would appear in theFederal Register soon thereafter. Some now think that HRSA is holding off on publication pending the release of the Government Accountability Office’s (GAO) congressionally mandated study of 340B, which is due in September.

How HRSA defines “patient” is crucial because it directly affects the amount of savings that hospitals, health centers, and other providers derive from the 340B program.

National organizations representing 340B providers have argued that the 2007 proposed definition would have been so burdensome that many providers would have been unable to continue to serve their indigent and uninsured patients. The drug industry, meanwhile, has long contended that 340B providers have stretched the current guidelines, which were issued in 1996, much too broadly, leading to impermissible drug diversion.

“A Long Year”

While the patient-definition guidelines appear to have been put on hold, Pedley pointed to other areas where progress has been made in her address to more than 800 health care providers, manufacturers, service companies and others attending the conference.

“This has been a long year for the office with new challenges and new authority and tremendous pressure to meet and implement the goals of health care reform,” Pedley said.

OPA, she said, enrolled 1,900 covered entity sites in 340B since July 2010, the program’s largest year-to-year enrollment increase since 2004. Of those, 1,365 were from rural and freestanding cancer hospitals that became eligible for the discounts under health care reform.

The office, she added, also approved 4,300 contract pharmacy arrangements since April 2010, when OPA issued long-awaited guidelines allowing covered entities with an in-house pharmacy to contract with multiple pharmacies. That brings the total number of 340B contract pharmacy arrangements to 7,300.

$4.4 Million for Fiscal 2011

In news that surprised many, Pedley revealed that Congress provided OPA with a $4.4 million line-item appropriation for the current fiscal year in the government-wide spending bill that President Obama signed in mid-April. That’s double the $2.2 million that OPA received in fiscal 2010 and the most that the office has ever received since securing its own line item in the Health and Human Services (HHS) budget.

Despite that increase, Pedley said OPA still lacks the money it needs to implement a mandatory dispute resolution process for 340B and a related system of civil monetary penalties for manufacturers that violate 340B pricing agreements, as required under health care reform. “We were not funded to implement them so it will be very slow going for us to take this to the next level,” she said.

Pedley also noted that due to a hiring freeze that was lifted only recently, her staff has shrunk from 19 members a year ago to 15 today. She also observed that funding constraints had prompted the decision in March to significantly scale back OPA’s technical assistance program.

The Obama administration had these problems in mind, Pedley said, when it proposed assessing a 0.1 percent fee on all 340B drug purchases in its fiscal 2012 budget request to Congress.

The proposed user fee is “the only way to make this program financially sustainable moving forward,” she said. “It will assist us in full implementation of the program and improving integrity and compliance. We truly believe it’s the right way to move.”

Pedley also addressed the proposed regulation that OPA issued in late May defining the scope of the restriction on orphan drug discounts for hospitals that gained eligibility for 340B under health care reform. Under the proposed rule, rural and freestanding cancer hospitals would be allowed to buy orphan drugs at 340B-discounted prices when they use the medicines to treat non-orphan diseases or conditions.

“We really worked to strike a balance in this regulation,” Pedley said. “The marketplace really needs this guidance.” Comments on the proposal are due today, July 19.

Patient Safety Initiative

Pedley also announced that the Centers for Medicare and Medicaid Services’ (CMS) Quality Improvement Organization (QIO) initiative is making “a multi-million dollar investment in” OPA’s Patient Safety and Clinical Pharmacy Services Collaborative (PSPC).

Under the QIO initiative, CMS contracts with a nonprofit group in each state and territory to spearhead local efforts to improve health-care outcomes. Beginning August 1, Pedley said, every state will have to recruit and support PSPC teams. “It’s a true showing of CMS seeing the value of this work,” she said.

Pedley strongly encouraged 340B stakeholders to follow CMS’s example and become more involved with the patient-safety initiative.

“340B has created a strong vehicle for access to medications,” she said. “But it’s not enough anymore to make medications accessible. It’s not enough to give patients medications that they cannot manage or to have processes that generate errors that we can’t see.”

“We’ve created an innovative and effective medication distribution channel that saves the nation $6 billion in costs,” she concluded. “We can make it much more.”

Source URL: https://340bemployed.org/340b-patient-definition-guidance-is-back-under-review/

---