Two Bills Potentially Impacting the 340B Program

27 Apr 2018

This month, two new bills that would impact the 340B program were introduced in Congress – one that would expand 340B eligibility to certain hospitals and another that would impose reporting requirements on 340B hospitals.

On April 12, 2018, Representatives Collin Peterson (D-MN) and Scott Tipton (R-CO) introduced the bipartisan Rural Hospital Frontier Fairness Act to provide automatic 340B eligibility to Sole Community Hospitals that were designated as such before October 5, 2015 and are located within 75 miles of the border of a frontier state.  These sole community hospitals would be permitted to participate in the 340B program without having to comply with the eligibility or other requirements applicable to other sole community hospitals, including the restriction on purchasing orphan drugs with 340B discounts.  States currently designated as frontier states are Montana, Nevada, North Dakota, South Dakota, and Wyoming.  The legislation also provides these hospitals with some added reimbursement benefits under the Medicare program.  Rep. Peterson stated in a press release that the legislation “will help maintain the continuum of care in rural communities across the country….  It will also allow rural facilities to direct resources at patients rather than overpriced medications.”  Representatives Peterson’s and Tipton’s bill marks the first piece of legislation introduced in the current Congress that would expand 340B eligibility.

On April 25, 2018, Rep. Earl “Buddy” Carter (R-GA) introduced the 340B Optimization Act, which would require 340B hospitals to report their low-income utilization rate (“LIUR”) for outpatient services.  The bill requires 340B hospitals to report a LIUR for outpatient services based on Medicaid revenues and charity care provided by hospitals and their registered outpatient sites to the Health Resources and Services Administration (“HRSA”).  HRSA would then be required to submit an annual report to Congress based on the information submitted by 340B hospitals.  The reporting requirement is modeled after the current Medicaid inpatient LIUR reporting requirement for disproportionate share hospitals.  Hospital groups expressed concern that such reporting requirements would impose undue administrative burdens on hospitals while not providing meaningful transparency or oversight.  Rep. Carter’s  bill marks the fourth piece of 340B legislation introduced in Congress to date that would impose new reporting requirements on 340B hospitals.

Category: Congress

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