The American Hospital Association (AHA) told pharmacy benefit manager Express Scripts (ESI) this week its new 340B claims identification requirement for covered entities and their contract pharmacies “is a major overreach” and should be withdrawn immediately.
An ESI spokesperson was not immediately available for comment regarding AHA’s June 15 letter.
The 340B Coalition, an umbrella group of 13 associations whose members include covered entities, sent its own letter to ESI in March asking it to rescind the policy. ESI told the coalition its new policy “was thoroughly evaluated” to ensure that it does not impede providers’ ability “to receive the advantages of the 340B program.” It said it has “already granted numerous pharmacies extensions for their operational compliance.”
Most 340B contract pharmacy arrangements use a virtual inventory model in which pharmacies fill prescriptions with their own purchased stock, which when it runs out is replenished with the entity’s 340B-purchased stock.
ESI now requires, when a claim is determined post-adjudication to be 340B-eligible, that pharmacies resubmit the claim using a claims-transaction protocol called N1, with codes showing the claim was filled with 340B-purchased drugs. Entities say that they and their contract pharmacies are not equipped to use the N1 transaction. They also worry that their contract pharmacies, to remain in good standing with ESI, will stop filling the entities’ 340B-eligible prescriptions with 340B-purchased drugs for claims submitted to ESI for reimbursement.
“Compliance with this policy is not as simple as adding a new code to a claim,” AHA told ESI in its June 15 letter. “It will require significant investments in information system upgrades, additional staffing, and other resources to implement at a time when such resources are limited due to the ongoing COVID-19 pandemic.”
The AHA also said the policy does not adhere to an advisory issued by the National Council for Prescription Drug Programs stating that the use of 340B identifiers should not be used if participating parties lack the infrastructure to do so. It also concluded that ESI has no authority to demand the use of a special code.
“(ESI) has no official role in the 340B billing or oversight processes,” the AHA said in its letter. “The roles and responsibilities of each key stakeholder in the 340B billing process—the 340B covered entity, the drug manufacturer, and the state Medicaid agency—are clearly spelled out in federal 340B contract pharmacy guidance. Nowhere in this guidance does it identify any role for a PBM.”
AHA represents nearly 2,000 hospitals that are 340B covered entities. ESI, the nation’s second-largest PBM, handles nearly a quarter of all prescriptions in the U.S.