House bill aims to add 'layer of transparency' to 340B program: 5 things to know

U.S. Rep. Earl "Buddy" Carter, R-Ga., introduced legislation April 24 that would require hospitals participating in the 340B Drug Pricing Program to report their low-income utilization rates for outpatient and inpatient services.

Here are five things to know.

1. Mr. Carter said the proposed legislation aims to increase transparency in the program, which provides front-end discounts on outpatient drugs to healthcare organizations covered under the pricing program. Entities eligible for 340B coverage include pediatric hospitals and hospitals treating a large proportion of low-income patients.

2. Certain hospitals' 340B eligibility is partially determined by their Medicaid Disproportionate Share Hospital status, which is based on the organization's low-income and uninsured patient population.

3. DSH hospitals are currently required to report their inpatient low-income utilization rate to receive DSH and 340B payments, but this formula "bases eligibility on inpatient care that is provided to individuals with some form of insurance and does not capture all uncompensated care, especially those furnished in an outpatient setting," according to a news release from Mr. Carter's office.

4. Mr. Carter's newly proposed legislation would require 340B hospitals to report their low-income utilization rates for outpatient services and inpatient services, in the main hospital and at pediatric sites.

"I believe the 340B program is very important, but it needs to be improved," Mr. Carter said. "This legislation adds an additional layer of transparency to allow us to better understand the patient makeup of DSH hospitals to improve the program and ensure it is truly being used in the most effective way for our nation's most vulnerable patients."

5. The proposed legislation has drawn some criticism. Beth Feldpush, senior vice president of policy and advocacy, America's Essential Hospitals, expressed concerns in a statement to Becker's Hospital Review.

"We support transparency, but it must be meaningful and contribute to program improvement. It's not clear to us that this bill would accomplish that," Ms. Feldpush said. "More likely, it would create administrative burdens that strain hospitals already operating with little or no margin and provide nothing relevant to HRSA [Health Resources and Services Administration] oversight. It also would widen the disparity in audits and other accountability measures for hospitals compared with those for drugmakers, which puts hospitals and their vulnerable patients at a disadvantage and weakens the program's ability to counter soaring drug prices."


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