November 10, 2014—Medicare Payments Advisory Commission staff members briefed the panel last week about a commission paper on the 340B program requested by congressional Medicare oversight committees. [ms-protect-content id=”2799″]
The commission is making no recommendations about 340B to Congress, MedPAC Chairman Glen Hackbarth explained during the panel’s monthly meeting. Congressional committees with jurisdiction over Medicare asked the commission to do some “fact-finding,” he explained, and the paper is “more of a descriptive work to assist those committees.”
The Government Accountability Office and the Health and Human Services Office of Inspector General both are on tap to issue reports about 340B and Medicare Part B spending next year.
After its Nov. 6 meeting, MedPAC released a slide presentation about its 340B paper, but not the actual paper itself. Hackbarth indicated that the paper’s findings would not be included in MedPAC’s next report to Congress, slated for March 2015.
Key points from the slide presentation include:
- The total number of 340B sites grew from 12,353 in 2005 to 28,272 in 2014. In response to questions from several commissioners, MedPAC staff noted that a 2012 Health Resources and Services Administration policy change required 340B locations formerly listed only once in HRSA’s 340B database to be broken out and relisted multiple time, so this comparison overstates actual growth.
- Recent growth in the number of 340B parent hospitals (described in the slides as “hospital organizations”) is entirely due to non-disproportionate share hospitals. There were 1,365 parent hospitals in 340B in 2010: 1,001 DSH hospitals, 292 critical access hospitals, and 72 children’s, cancer, and other rural hospitals. In 2014, there were 2,140 parent hospitals in 340B: 966 DSH (down 35), 940 CAH (up 648), and 234 other (up 171). During their discussion of the paper, commissioners observed that while the number of CAHs in 340B is large, their drug purchase volume is relatively small.
- The slide presentation notes that the conference report on the 1992 legislation that established 340B states that, in creating the program, Congress intended “to enable these entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”
- The 340B statute does not define key terms, including the definition of patient.
- Medicare reimbursement for Part B drugs administered at 340B DSH hospitals rose from $0.5 billion in 2004 to $3.4 billion in 2013. That compares with $2.5 billion in 2004 and $7.2 billion in 2013 for all hospitals.
- Hospitals can use revenue generated from 340B drugs “for any purpose, e.g. expand services, serve more patients, invest in capital, cover overhead costs.”
- HRSA is working on rules to clarify key terms in the 340B statute.
- 18 percent of 340B entities use contract pharmacies. Concerns have been raised that some pharmacies provide 340B drugs to ineligible patients, and about a lack of consistency in how entities identify eligible patients.
- If Medicare and beneficiaries paid less for Part B drugs provided by 340B hospitals, this would reduce hospitals’ 340B revenue. [/ms-protect-content]