Health Center Federal Policy

Congress Increasing Scrutiny, Oversight of 340B

The 340B Drug Discount Program might sound like an obscure health policy issue to most people, but those in the Health Center movement know that it is an essential source of support, allowing Health Centers to stretch increasingly scare federal resources and reinvest in patient care.

Over the years, 340B has received increased scrutiny from policymakers who believe the program may have experienced inappropriate or rapid growth in a way that diverges from its original intent. While Health Center use of the program has not been the focus of this scrutiny, any potential legislative changes could have a sweeping impact on Health Centers.

The possibility of new legislation regarding the 340B program appears to be gaining momentum. On Tuesday, March 24, the House Energy and Commerce Subcommittee on Health held a hearing entitled “Examining the 340B Drug Pricing Program,” receiving testimony from the Health Resources and Services Administration (HRSA), the Government Accountability Office (GAO), and the Department of Health and Human Services Office of the Inspector General (OIG). Fourteen Members of Congress participated in the hearing, many of whom expressed broad support for the 340B program, and specifically for Health Center participation in the program. But several of those Members also emphasized the need for improved transparency and accountability.

In an effort to be responsive to those Members, Republican and Democratic Energy and Commerce Committee staff drafted a proposal to add a number of 340B provisions to H.R. 6, the 21st Century Cures Act, as it was marked up by the full Committee several weeks ago. NACHC learned of this effort when we were called to meet with the committee staff late on a Friday afternoon, a few days before the bill was to be considered by the committee, after which we were given the weekend to put together constructive feedback on ways the proposal could be modified and improved.

With roughly 48 hours to carefully analyze every word in the draft legislation, and to make well-thought out recommendations for change, NACHC staff got to work pouring through each provision. Among other provisions, the draft proposal would have given HRSA greater authority to regulate certain aspects of the program and would also have created a user fee program to help fund oversight, instituted more stringent penalties for fraud and abuse, and added additional reporting requirements for hospitals (but not Health Centers). Due in large part to concerns expressed by some stakeholders over the tight timeframe on which the bill was considered, ultimately the Committee could not find consensus for moving forward and the language was dropped from the bill entirely.

Given the importance of the 340B program to most Health Centers, some may be relieved that no 340B provisions were ultimately included in this particular legislative package. Some may see it as a missed opportunity to strengthen the program and give HRSA the authority it needs in order to better regulate and maintain program integrity. For our part, NACHC staff saw this experience as a clear signal that the Committee understands the important role of 340B for Health Centers, and is committed to working with us to protect this critical program moving forward. We will be keeping a close eye on all of these developments, and are in regular touch with key Congressional offices about the program.

We don’t know what the next steps for 340B on the Hill will be. But one thing is clear – with Members of Congress continuing to examine this program carefully, and the Senate poised to take up similar companion legislation to the 21st Century Cures Act sometime in the next year, it behooves every Health Center to continue to ensure that they use this program appropriately and effectively.