The American Hospital Association (AHA) last week told the U.S. Centers for Medicare & Medicaid Services (CMS) that insurance company UnitedHealthcare’s (UHC) specialty pharmacy coverage policies “undermine the intent of the 340B program” and should be disallowed.
In a Feb. 4 letter, AHA told CMS that UHC “is upending the traditional system” in which hospitals buy, store, and administer specialty drugs and then bill payers for the cost and administration of such drugs. It said UHC health plans “are no longer permitting many providers (under penalty of non-payment) to acquire and store a variety of drugs needed to treat their patients.”
Instead, AHA continued, “the health plan demands that these providers accept drugs purchased and handled by the health plan, which in turn relies on” specialty pharmacies owned by or affiliated with OptumRx, UHC’s pharmacy benefit management subsidiary.
Specialty drug “white bagging” and “brown bagging” under UHC’s policies has implications not just for patient care, but also for hospitals’ ability “to provide better access to care” through the 340B program, AHA said.
“Contract or community pharmacy arrangements under the 340B program have allowed hospitals to improve access to prescription drugs for their communities,” AHA said. “White or brown bagging drugs allows the insurer to control the distribution of the drug and would eliminate the role of 340B community pharmacy arrangements as well as undermine the intent of the 340B program to allow hospitals to use savings from discounted drugs to improve access to care for the vulnerable communities they serve.”
AHA asked CMS to prohibit brown bagging—in which patients take possession of drugs and bring them to providers for administration—by UHC and all other health plans serving Medicare Advantage, Medicaid, Children’s Health Insurance Program, and federally facilitated health insurance marketplaces. It also recommended stricter limits on white bagging—in which the plan’s own or affiliated specialty pharmacy dispenses plan-purchased drugs to the provider for administration. “At no point should providers be required to accept these arrangements when they are unilaterally forced upon them by payers,” AHA said. “Providers should be permitted to decline any such arrangements based on quality of care concerns.”
Lastly, AHA said payers allowed to use white bagging “should be required to give sufficient and advance notice to providers.”
“Oftentimes, providers learn about the payer implementation of these policies with little-to-no notice,” AHA said.
340B Report reached out to UHC for its response to AHA’s letter. The company told us:
“As of October 1, 2020, outpatient hospitals in UnitedHealthcare’s commercial network are subject to an expanded requirement that requires additional specialty drugs to be sourced from indicated specialty pharmacies, unless otherwise authorized by UnitedHealthcare. Our data shows that, for some outpatient hospitals, the reimbursement rate on some specialty drugs may be over 400% of the reimbursement rate established by the Centers for Medicare & Medicaid Services (CMS) for the same drug. By requiring outpatient hospitals to source these drugs through an indicated specialty pharmacy, we are driving unnecessary costs out of the health care system to help make care more affordable. The specialty drug sourcing requirement only applies to outpatient hospitals in our commercial network.
UnitedHealthcare’s contracted specialty pharmacies include major vendors like Accredo (owned by Cigna), CVS Specialty, Rx Alliance (owned by Walgreens), and others in addition to UnitedHealthcare’s affiliated specialty pharmacy, Optum Specialty Pharmacy.”
