by admin | August 7, 2009 3:09 pm
August 7, 2009 – For more than 15 years, safety-net providers have benefitted from 340B drug discounts that help them serve millions of uninsured patients who show up seeking care every year. Such institutions have grown the federal 340B program into a $5-billion market that now affects 14,000-plus health care facilities and more than 800 manufacturers and wholesalers.
But will safety-net providers still need the 340B discount if Congress manages to extend health insurance coverage to all Americans in the next several years? Will there even be a future need for federal health programs such as 340B in a reformed environment? These are some of the questions that are starting to emerge as lawmakers labor to overhaul the nation’s health care system, causing angst among providers and manufacturers alike.
“The answer is unequivocally ‘yes.’ There may be as many as 17 million Americans who are not insured under the most optimistic scenarios,” former HRSA Administrator Claude Earl Fox told the 340B Coalition Conference in Washington, D.C., last month. “One of the beauties of the 340B program is the relative simplicity of accessing the program. Quite frankly, I think it should be a template for how to think about reframing the pharmaceutical dispensing and cost structure within this country.”
Wyoming Senator Mike Enzi, ranking Republican on the powerful Senate Health, Education, Labor & Pensions Committee (HELP), apparently feels differently. He filed an amendment in July to terminate the 340B program in 2015, adding a “hardship exception” for providers that serve 8 percent or more uninsured patients. Sen. Enzi eventually withdrew his amendment, but continued to express concern about the program during his committee’s health reform bill markup.
The question over whether 340B will be justified long-term will likely resurface as the debate over health care reform continues – even if the Democrat-controlled Congress appears unlikely to scrap the program any time soon.
Leveling the playing field
In Palm Beach County, Fla., where Dr. Fox is now a professor at the University of Miami School of Medicine, a large number of undocumented immigrants seek care from safety-net providers – and the same holds true at clinics and hospitals nationwide, he noted. “The need will not go away, so the discount needs to be preserved,” Dr. Fox said.
According to the Pew Hispanic Center, a nonpartisan research group in Washington, D.C., the United States was home to nearly 12 million undocumented immigrants in 2008.
But Donna Yesner, a partner at McKenna Long & Aldridge, a Washington, D.C. law firm representing pharmaceutical manufacturers, predicted that the need for the 340B program will be greatly diminished over time as Congress shifts costs to health plans and away from providers.
“If providers are receiving their full reimbursement rate from 97 percent of their patients, there’s little need for the revenue stream from the re-sales to the insured to pay the uninsured. It just becomes a windfall for the safety-net providers who are really in no different position than other non-profit institutions at that point,” she told the 340B Coalition Conference.
Noting that she was not speaking on behalf of her clients, Yesner said she welcomes a Government Accountability Office study to explore the future of the 340B program. The study was introduced in an amendment by Sen. Orrin Hatch (R-Utah) and approved by the Senate Committee on Health, Education, Labor & Pensions (HELP).
“There’s going to be a group of people who are in need of assistance and the program needs to go on to take care of those folks, but we need to study it, and now is not the time to expand the program,” Yesner said, referring to pending legislation that would extend 340B drug discounts to the hospital inpatient setting and to groups of new providers. (See Monitor July 2009.)
Yesner also noted that manufacturers entered into a contract with the federal government to serve only outpatients under the 340B program. Imposing new rules mid-game may be akin to breach of contract, similar to what led to years of litigation against the federal government after the savings and loans crisis of the 1980s, she cautioned.
Yesner’s comments did not yield much sympathy from the conference audience of mostly pharmacists and health care sector employees. Several took to the floor to defend their right to 340B discounts also in a reformed system.
“Do you really think that because patients are insured they’ll still be able to afford medications? There will still be a very high cost for some medications because of co-pays and benefit caps,” one conference participant bristled.
A universal coverage system doesn’t mean universal coverage, added Dr. Fox. He recalled the story of a kidney transplant patient whose anti-rejection drug wasn’t covered by Medicare. “The health center had to eat that cost,” he said.
House health reform bill wants future role for 340B
In fact, America’s Affordable Health Choices Act of 2009 now being debated in the House of Representatives specifically mentions the 340B program as being part of the public benefits plan offered by the proposed government-run Health Insurance Exchange. Section 204 of the bill says the public option plan should contract “for outpatient services with essential community providers as defined in the 340B program,” according to a bill analysis prepared by the three House committees that crafted the legislation.
But there are no guarantees the House language or the expansion of the program included in both the House and Senate health reform bills will remain intact in a final bill that lands on President Barack Obama’s desk. Such uncertainties have financially pressured safety-net hospitals and clinics on edge at a time when they likely face significant reimbursement cuts.
In early July, a number of major hospital associations announced a deal with Senate Finance Committee Chairman Max Baucus (D-Mont.) and the Obama administration to slash $155 billion from Medicare reimbursements over the next decade. Of that, $50 billion would come from a drop in so-called disproportionate-share (DSH) payments to safety-net hospitals.
The Senate has not yet announced its plans for cuts, but the House health reform bill calls for DSH being adjusted starting in fiscal 2017 “to the empirically justified level.” The Congressional Budget Office estimates that Medicare DSH payment would drop by $10.2 billion between 2010 and 2019, and Medicaid DSH payments by $6.4 billion during the same period.
Speaking at the 340B Coalition Conference in July, Rep. Jo Ann Emerson (R-Mo.) noted that health reform will require sacrifices by all camps. “Everybody who’s in this game,” she said, “is going to have to give some skin.”
Source URL: https://340bemployed.org/340b-to-be-or-not-to-be/
Copyright ©2025 340bemployed.org unless otherwise noted.