Aerial view of Maine state capitol
A bill in Maine would impose significant 340B program reporting requirements on hospitals.

Maine Becomes Fourth State to Introduce 340B Hospital Transparency Bill

Maine state senators have introduced a bill to require 340B hospitals to file annual reports with detailed information on the savings they receive through 340B drug discounts, including annual 340B revenue the hospital generates minus 340B aggregate acquisition costs, and fees the hospital pays to its 340B contract pharmacies.

Legislative Document 1395, introduced by Sen. Michael Tipping (D) on March 28, would require 340B hospitals, starting Jan. 1, 2024, to file annual reports with the Maine Health Data Organization (MHDO). The reports would have to include data on 340B revenue generated at each hospital and off-site clinic, 340B drugs dispensed at each site, as well as each site’s 340B-related contractors and vendors. Tipping is a progressive Democrat from Orono.

MHDO would have to post on its website a summary of the reports with aggregate data collected from the hospitals and off‑site clinics.

The bill was carried over on March 30 to a special legislative session, so legislators could first pass the state’s 2023-2024 fiscal year budget. The special session convened Wednesday, but a hearing on the bill has not yet been scheduled, said a source with the state legislature. 

The bill reflects growing pressure on 340B covered entities, disproportionate share hospitals in particular, to account for the savings they generate through the discount program and how the money is spent. Hospital groups say 340B DSH hospitals care for much high numbers of Medicaid and low-income Medicare patients and that new, stringent reporting requirements would add unnecessary costs and effort without a clear benefit to patients.

The legislation would require hospitals that participate in 340B to include in the annual reports, for each separate hospital and off-site clinic:

  • Total annual revenue from purchases of 340B drugs less aggregate annual acquisition costs.
  • Dispensing fees paid to hospital’s 340B contract pharmacies.
  • Patient mix by payment source including, but not limited to, Medicare, Maine Care (the state’s Medicaid program), private insurance and uninsured.
  • Costs incurred for charity care.
  • Percentage of total revenue less discounts from infusion or injection of physician‑administered 340B drugs, including associated items or services provided as part of administering the drugs.

Each hospital would have to report drug data from each dispensing site including:

  • Drug name, national drug code (NDC), acquisition cost, and quantity.
  • Account type through which drug was purchased and the associated 340B ID number
  • Payer source.
  • Date of prescription
  • Date the drug was administered or dispensed and the location.
  • Compensation received from sale of 340B drug, including ingredient cost, dispensing fee, other compensation.

Hospitals would have to provide contracting and vendor data for themselves and offsite locations including:

  • Names of 340B third‑party vendors, including split billing vendors and contract pharmacies.
  • Split billing vendor information if used and total amounts paid for split billing services.
  • Self‑negotiated contracts for individual entities and integrated delivery networks, including pharmacy benefits manager costs, insurance carriers and employer self‑funded plans.
  • Grantee contract information and compensation paid.

MHDO would be required to submit the annual reports to the Office of Affordable Health Care, the Maine Prescription Drug Affordability Board, and the joint standing committee of the legislature with jurisdiction over health data reporting and prescription drug matters.

A wide-ranging bill introduced by Connecticut Gov. Ned Lamont (D) would require 340B hospitals starting in 2024 to report their annual 340B drug revenue and summarize how they use the money to benefit their communities. While Connecticut 340B hospitals oppose this aspect of the bill, they support other aspects including requiring drug manufacturers to offer 340B pricing at contract pharmacies and prohibiting pharmacy benefit managers from alleged discriminatory practices such as targeting 340B providers for reimbursement cuts.  The legislature’s joint public health committee passed it on March 20 and it has been placed on the House calendar for a vote.

In February, a Virginia House subcommittee tabled a bill that its Democratic sponsor said effectively would have required Virginia 340B hospitals to abide by the American Hospital Association’s voluntary 340B Hospital Commitment to Good Stewardship Principles.

Legislation in Indiana that would have required hospitals to file annual reports disclosing their median reimbursement for 340B-priced drugs, along with numerous other financial disclosures, failed to advance.

At the federal level, Health and Human Services (HHS) Secretary Xavier Becerra testified at a House Energy & Commerce health subcommittee hearing last week that the 340B program “doesn’t have the transparency we need.” HHS wants Congress to give it power to require covered entities to annually report how they use 340B savings to benefit the communities they serve. During another E&C health subcommittee hearing last week, its Republican vice chair called for legislation requiring hospitals to report what they make from 340B drug discounts versus what they spend on charity care, as a first step toward tackling comprehensive 340B program changes later. Rep. Doris Matsui (D-Calif.) pushed back against imposing new requirements on hospitals, citing concerns about unnecessary burdens and scapegoating.

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