July 20, 2012—Two influential members of the House Energy and Commerce Subcommittee on Health have asked the Health Resources and Services Administration (HRSA) to issue an updated 340B definition of patient “that ensures the program’s eligibility is for those truly in need and curbs any misuse of the program.”
In a July 18 letter to HRSA Administrator Mary Wakefield, Subcommittee Chairman Joe Pitts (R-Pa.) and Rep. Bill Cassidy (R-La.) described 340B as “a program that has diverted from its original intent,” which they described as serving patients who are “medically uninsured, on marginal incomes, and have no other source to turn to for preventive and primary care services.”[ms-protect-content id=”2799”]
They observed that “while the program has grown dramatically, oversight of the program has been mostly dependent on a self-policing model with little guidance from HRSA on them program’s intent.”
“We believe the definition of a patient must not only be clear in its direction but protective of the beneficiaries we hope the program will serve in the future,” they wrote.
A HRSA spokesperson said the agency “is aware of this correspondence and will be responding back to Reps. Pitts and Cassidy.”
Safety Net Hospitals for Pharmaceutical Access (SNHPA), which represents hospitals enrolled in 340B, issued a statement saying it agreed that “a clearer, more specific definition of patient is needed.” However, it pointed out that the 340B law does not in any way limit 340B to patients based on their insurance status.
The hospital group said the Government Accountability Office (GAO) described the problem well in its comprehensive report on the 340B program last September. In that study, the watchdog agency explained that the current definition “is sometimes not specific enough to define the situations under which an individual is considered a patient of a covered entity for the purposes of 340B and thus, covered entities could interpret it either too broadly or too narrowly.‘”
SNHPA cited the GAO’s finding that covered entities “are permitted to use drugs purchased at the 340B price for all individuals who meet the definition of patient, whether or not they are low income, uninsured, or underinsured.”
SNHPA urged HRSA to clarify the definition of patient in a way “that enhances the program’s integrity and continues to provide covered entities with reduced costs enabling them to expand access and offer more services to indigent, uninsured, and underinsured patients.”
“Congress intended to reduce drug costs for eligible covered entities in recognition of their service to vulnerable populations, including the uninsured and underinsured,” SNHPA said. “If the definition of patient were to be limited based on insurance status, 340B savings would be reduced and administrative costs would increase to such a degree that providers would be forced to scale back or terminate important programs benefiting indigent and other needy populations.”
The patient definition “must be consistent with the statutory framework of the 340B program,” the hospital group said. “If Congress had intended to limit the definition of patient based on insurance status, it would have done so.”
In a news release announcing his and Rep. Pitts’ letter to HRSA, Rep. Cassidy reiterated his concern that the 340B program “is not working well and may indeed be contributing to drug shortages.” SNHPA pointed out in its statement that while numerous explanations for drug shortage causes have been offered, particularly manufacturer production challenges, no evidence has suggested that the 340B drug discount program contributes to drug shortages.
In January 2011, HRSA sent the White House Office of Management and Budget (OMB) a redrafted patient definition for review prior to its publication in the Federal Register. OMB returned it to HRSA with unspecified changes in May 2011. It has not been issued since then and its contents are unknown.
SNHPA and a number of other organizations, including the National Association of Community Health Centers, submitted a detailed proposed new definition in 2008. “The time is now for the Administration to act,” SNHPA said.[/ms-protect-content]