September 20, 2010—The Health Resources and Services Administration (HRSA) formally invited 340B stakeholders today to begin providing their best advice on forthcoming regulations to create an administrative dispute resolution process for the outpatient drug discount program and for fines against drug companies that deliberately overcharge providers for drugs.
The announcements, known as advance notices of proposed rulemaking, were published in the Sept. 20 Federal Register. Cmdr. Krista Pedley, who took over as director of HRSA’s Office of Pharmacy Affairs (OPA) this summer, broke the news of their release in Chicago late last week during a major drug industry annual conference on Medicaid rebates, 340B and other government drug pricing programs.
Implementation Hinges on Funding
Pedley said that while HRSA and OPA will promulgate rules to create the dispute resolution and civil monetary penalty processes, it will not actually implement either one until OPA secures more funding from the government. She noted that her office now spends about $15 million per year, or about three times the amount of the $5.2 million appropriation it would get under President Obama’s budget request for the fiscal year that starts Oct. 1.
The Department of Health and Human Services (HHS) currently covers OPA’s over-budget spending by shifting money to it from other accounts. If Congress fails to pass a regular appropriations bill for HHS before the new fiscal year begins, OPA’s budget will likely remain at its current $2.2 million level, and it is anyone’s guess whether the funds will be there to allow the office to get the two new program integrity initiatives up and running.
First-ever 340B Regulations
The pair of regulations, Pedley noted, will be the first in the 340B program’s history. The national health care reform law enacted in March established both program integrity initiatives and gave HHS a 180-day deadline to begin rule-making for them.
Pedley candidly acknowledged during the Chicago gathering that OPA is in uncharted waters when it comes to drafting formal regulations, as compared with less stringent guidance, and strongly urged the industry representatives in attendance to submit comments by the Nov. 19 deadline.
Focus Areas
With respect to the dispute resolution process, HRSA and OPA are “expressly” seeking input on:
- administrative procedures,
- existing models,
- threshold requirements,
- hearings,
- decision-making official or body,
- appropriate appeals procedures,
- deadlines,
- discovery procedures,
- manufacturer audits of 340B covered entities,
- consolidation of manufacturer claims against covered entities,
- consolidation of covered entity claims against manufacturers,
- claims by third parties representing covered entities, and
- integration of dispute resolutions with other Affordable Care Act (ACA) provisions.
With respect to civil monetary penalties for manufacturer overcharging, HRSA and OPA are seeking comments specifically on:
- existing models,
- threshold determinations,
- administrative process elements,
- hearings,
- appeals processes,
- definitions,
- penalty computation,
- penalty payment, and
- integration with other ACA provisions.
The Monitor will be taking a closer look in coming days at what specific sorts of advice HRSA and OPA are seeking in these issue areas.
Comments in response to the notice on the dispute resolution process should be marked “Comments on Administrative Dispute Resolution Process” and sent to Dorcas Ann Taylor, Public Health Analyst, Office of Pharmacy Affairs (OPA), Health Systems Bureau (HSB), Health Resources and Services Administration (HRSA), 5600 Fishers Lane, Parklawn Building, Room 10C-03, Rockville, MD 20857. Comments may also be emailed to: opadrp@hrsa.gov.
Comments in response to the notice on civil monetary penalties should be marked “Comments on the Civil Monetary Penalties” and sent to Bradford R. Lang, Public Health Analyst, Office of Pharmacy Affairs (OPA), Health Systems Bureau (HSB), Health Resources and Services Administration (HRSA), 5600 Fishers Lane, Parklawn Building, Room 10C-03, Rockville, MD 20857. OPA is also accepting comments on this notice via email at: opacmp@hrsa.gov.