The changing composition of payers puts 340 billion hospitals at risk of losing their eligibility


Dive brief:

  • Hospitals enrolled in the 340B Drug Rebate Program may no longer be eligible after the pandemic changed their payroll lineup, according to a Wednesday letter the American Hospital Association sent to HHS Secretary Xavier Becerra.
  • Depleted patient volumes and canceled elective surgeries reduced the proportion of inpatients who are Medicaid and Medicare SSI patients in 2020, according to the AHA. When hospitals file their Medicare cost reports reflecting these changes, they may no longer meet the program’s criteria and lose access.
  • The AHA wants the HHS to waive certain eligibility requirements for program hospitals to allow them continued access during the public health emergency, according to the letter.

Dive overview:

Throughout the pandemic, the HHS has issued a number of regulatory flexibilities to help providers, and the hospital lobby is asking it to do so again by waiving current eligibility requirements for the drug rebate program. 340B before providers experiencing a temporary change in the composition of payers are expelled. .

The program requires pharmaceutical companies to give discounts on outpatient drugs to providers serving a large proportion of low-income patients, especially those in rural areas.

Discounts may 25% to 50% range the cost of drugs, according to the HRSA, which manages the program.

But many of those patients did not seek treatment last year, hampering hospital finances and shifting the makeup of payers.

Hospitals are currently eligible for the program based on their Medicaid and Medicare SSI inpatient volume, shown in their latest Medicare cost reports.

Losing access to $ 340 billion in discounted medicines and program savings could jeopardize the ability of these hospitals to deliver essential services to their communities, which would be particularly catastrophic at a time when they remain on the front lines of health care. the ongoing pandemic, ”the AHA said in its letter. .

This latest issue comes after several years of clashes around the 340B program.

Last year, a federal appeals court ruled against the hospital lobby, ruling that the significant reduction in HHS rates for certain 340B drugs could remain in place. The HHS reduced reimbursements by arguing that hospitals had already received large discounts for drugs and could be encouraged to abuse it.

At the time, AHA said it was weighing its options on whether to appeal to the Supreme Court.

To avoid further problems, the HRSA finalized a rule late last year that created a dispute resolution process when hospitals believed they were overcharged for 340B drugs. Drugmakers have a similar mechanism for raising concerns about whether hospitals have received duplicate rebates.


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