Ahead of HHS’ planned 340B rebate pilot program, several healthcare organizations urged congressional leaders to cancel the pilot they say would threaten care access for low-income and rural patients.
The pilot program, slated to launch Jan. 1, will allow drug manufacturers to offer rebates rather than up-front discounts for medications, changing how the 340B program has run for more than 30 years. The pilot will include most drugs on CMS’ Medicare Drug Price Negotiation Selected Drug List.
In a Dec. 11 letter to House and Senate leadership, organizations representing hundreds of U.S. hospitals said the pilot could disrupt critical care for patients.
America’s Essential Hospitals, 340B Health, the American Society of Health-System Pharmacists, the Association of American Medical Colleges, the Catholic Health Association of the United States and the Children’s Hospital Association penned the letter.
They outlined three concerns:
1. Disrupted cash flow: The rebate pilot will force hospitals to “float” millions of dollars to drugmakers. The average annual “float” per 340B-covered hospital is $8.6 million and as much as $37.2 million for hospitals with at least 500 beds, according to survey data from 340B Health.
2. Administrative complexity: The Health Resources and Services Administration, an HHS agency, estimates the pilot will add at least $200 million in costs related to submitting claims data. Hospitals say this estimate is too low, saying the program would require “additional staff and allocate more resources to prepare, submit, and track data to request rebates and reconcile payments.”
“The scope of data required by manufacturers under the Rebate Program includes categories of data never previously submitted to manufacturers,” according to the letter.
3. “Other” denials: The pilot program prevents drugmakers from denying rebates due to diversion or Medicaid duplicate discounts but allows denials under an “other” category. It is unclear what this category encompasses, the letter said, which could complicate efforts to challenge denials.
