March 12, 2014—Requiring Oregon health centers to give the state all of their 340B savings on drugs for Medicaid beneficiaries, whose care is mainly managed and paid for by the state’s new Medicaid coordinated care organizations, “may not actually be effective and could adversely impact patient care,” a new study concludes. [ms-protect-content id=”2799″]
The study was commissioned by the Oregon Primary Care Association, which represents the state’s 32 federally qualified health centers. It evaluates the potential impact of requiring the FQHCs and their contract pharmacies to bill the state’s 16 CCOs for the actual acquisition cost of 340B drugs. It also describes how the FQHCs use their 340B savings to stretch resources, serve more patients, and improve services.
In 2012, the federal Centers for Medicare and Medicaid Services gave Oregon a Medicaid policy waiver and a $1.9 billion grant to see if it could improve care at lower cost by coordinating patient care and focusing on disease management. Under the five-year demonstration project, Oregon created 16 regional CCOs, which are basically accountable care organizations by another name. The CCOs comprise their regions’ counties, hospitals, FQHCs, other providers, and most of their health plans. Each CCO receives a capitated payment from the state to cover patients’ acute and behavioral care costs. Many Oregon Medicaid acute and behavioral health services previously had been delivered by separate managed care plans under separate contracts. The OPCA study notes that the CCOs now cover approximately 90 percent of the state’s Medicaid beneficiaries.
For Medicaid fee for service, current Oregon Health Authority rules require 340B providers or their contracted agents to bill Medicaid at actual acquisition cost for 340B-discounted drugs provided to Medicaid patients. The study notes that OHA “has published provider notices in support of applying the FFS reimbursement rate to MCOs/CCOs.” Providers, it says, “have disputed the legality of this policy and have raised several questions about the practicality of this requirement and its impact on entity operations.”
Requiring the state’s FQHCs to hand over all of their 340B savings to the new CCOs, “or other additional regulations and restrictions on drug purchasing and/or billing, could lead to reduced access to pharmacies and services for Oregonians,” the study states. Such policies also might undermine 340B contract pharmacy arrangements between FQHCs and retail pharmacy partners, it adds.
The study found that Oregon’s FQHCs use their 340B savings to carry out the drug discount program’s federal intent in a variety of ways. “All are designed to increase access and provide additional services for the vulnerable and underserved,” the study stated. “The type and extent of assistance is dictated largely by the needs of the FQHC’s community.”
Examples cited in the study include:
- Financial assistance to patients unable to afford their prescriptions
- Clinical pharmacy services, such as disease management programs or medication therapy management
- Student residencies and/or internships to provide additional pharmacy services to patients
- Outreach programs
- Additional health care services, such as dental or behavioral health services
- Registration of patients for manufacturer patient assistance programs
“FQHCs rely on the 340B funding to offset the costs of providing these and other important (yet unreimbursed) services,” the study stated. “And as safety-net community providers, FQHCs use the funding to benefit all patients of the community, indirectly passing savings to the state as a whole.”
“Savings from the 340B program are used optimally when they are retained by the FQHC,” the study states. “Any policy that shifts 340B savings away from an FQHC will dilute the savings and compromise patient services.”
The study, which was conducted by Madeline Wallack and Suzanne Herzog of RxX Consultants, is available here. [/ms-protect-content]