by admin | September 23, 2011 8:03 pm
September 23, 2011—All of the health care providers interviewed for an important new study of the 340B drug discount program[1] say that the substantial savings they get by participating allow them to maintain services and reduce medication costs for patients, just as Congress intended when it created the program nearly 20 years ago.
In a much-anticipated report mandated by last year’s health care reform law, the Government Accountability Office (GAO) observed that many covered entities pass their 340B savings on to uninsured patients in the form of lower drug costs, while others use them to provide care for more patients and offer services that otherwise would have been unaffordable, including “additional service locations, patient education programs, and case management.”
The congressional watchdog agency also found, however, that the Health Resources and Services Administration’s (HRSA) oversight of the program is inadequate to ensure both drug manufacturers’ and covered entities’ compliance with program requirements.
“The agency largely relies on participants’ self-policing to ensure compliance with program requirements, and has never conducted an audit of covered entities or drug manufacturers,” GAO said. “As a result, HRSA may not know when participants are engaging in practices that are not in compliance.”
GAO investigators also found “that HRSA has not always provided covered entities and drug manufacturers with guidance that includes the necessary specificity on how to comply with program requirements.”
“With the program’s expansion,” GAO said, “program integrity issues may take on even greater significance unless effective mechanisms to monitor and address program violations, as well as more specific guidance are put in place.”
The study recommended that the Secretary of Health and Human Services direct HRSA to:
Safety Net Hospitals for Pharmaceutical Access (SNHPA), which represents nearly 800 hospitals enrolled in 340B, issued a statement saying it was “pleased to see that the report highlights the numerous ways in which 340B providers use program savings to reduce costs for indigent patients and increase access to care for this vulnerable population.”
With respect to GAO’s recommendation that HRSA issue clarifying guidance on the definition of an eligible patient, SNHPA noted that “manufacturers and covered entities often disagree on which individuals may receive discounted drugs due to misperceptions on how hospitals dispense and administer outpatient drugs.”
“These misperceptions,” it continued, “can result in the incorrect belief that covered entities are diverting 340B drugs to ineligible patients.” SNHPA and other 340B provider organizations have urged HRSA to adopt a revised patient definition that they say would would clarify the rules without placing unreasonable and unnecessary burdens on safety-net providers.
SNHPA said that while it agrees that there should be clearer eligibility criteria for private nonprofit hospitals, it “is confident that a significant majority of private nonprofit hospitals in the program are providing substantial levels of indigent care.”
The hospital group also said it was pleased that the GAO report “documents the difficulties 340B covered entities face due to discriminatory reimbursement rates from third party payers.”
“For covered entities to fulfill Congress’ intent that the 340B program help safety-net providers and their indigent patients, pharmacy benefit managers and other third party payers should not be able to reimburse 340B covered entities less than non-340B providers,” it said “SNHPA looks forward to working with policymakers to address this and other problems faced by safety-net providers in a way that maximizes the program’s potential and continues to improve this critical program.”
The Monitor will report on reactions to the GAO report by drug manufacturers and other 340B stakeholders in future articles.
Source URL: https://340bemployed.org/gao-340b-yields-benefits-as-intended-but-needs-more-oversight/
Copyright ©2025 340bemployed.org unless otherwise noted.