Maine state capitol
The Maine legislature has passed and Gov. Janet Mills (D) has signed a bill requiring 340B hospitals to report their 340B savings and how they use them.

Maine Enacts Nation’s Second 340B Provider Transparency Law

Maine Gov. Janet Mills (D) signed bipartisan legislation late last week requiring 340B hospitals to submit annual reports consistent with the American Hospital Association’s voluntary 340B good stewardship principles.

The new law made Maine the second state to impose reporting requirements on 340B covered entities and the first one to base them on AHA’s principles. Minnesota was the first state in the country to imposed reporting requirements late last month. Its requirements are more comprehensive and apply to all 340B covered entities. Maine’s apply to hospitals only.

Connecticut lawmakers early this month stripped language from a comprehensive health care cost control bill that would have required all 340B entities to file reports on their 340B program savings and how they use them. In January, a Virginia House subcommittee killed a bill that would have made 340B hospitals follow the AHA’s principles.

At the federal level, the House Energy & Commerce Committee voted late last month on largely a party line vote to impose tough reporting requirements on 340B hospitals and give the Secretary of Health and Human Services discretion to apply them to other providers.

Mills signed the Maine bill, LD 1395, on June 23. The state House and Senate each passed it on June 14. Democrats are the majority party in both chambers. The bill was sponsored by Sen. Michael Tipping (D) and cosponsored by Sen. Donna Bailey (D) and Reps. Kristi Mathieson (D), Joshua Morris (R), and Charles Skold (D).

The new law requires 340B hospitals beginning Jan. 1, 2024, to give the Maine Health Data Organization an annual report

  • describing how the hospital uses 340B program savings to “benefit its community through programs and services funded in whole or in part by savings from the 340B program”
  • estimating annual savings from the 340B program by comparing acquisition price of 340B drugs to group purchasing organization pricing
  • comparing the hospital’s 340B program savings to its total drug expenditure
  • describing the hospital’s “internal review and oversight of the 340B program.”

The Maine reporting requirements apply to hospitals and their subsidiaries and affiliates. They define hospital affiliates as entities that “provide medical services or medically related diagnostic and laboratory services or engage in ancillary activities supporting those services.”

The original version of the bill, introduced in the Senate on March 28, was much more stringent, Maine hospitals say. It required detailed reporting for each drug dispensed through the 340B program—including acquisition cost, date of prescription and administration, payer source, and compensation for the drug including ingredient cost and dispensing fee. It also mandated “contracting and vendor data separated by the hospital and each off-site clinic facility associated with the hospital,” including the names of all third-party vendors and a list of “self-negotiated contracts for individual entities and integrated delivery networks.”

State hospitals groups, health systems, and individual hospitals opposed the bill during an April 27 hearing of the legislature’s Joint Standing Committee on Health Coverage, Insurance and Financial Services. Supporters included the state Department of Health and Human Services, the state-appointed Maine Prescription Drug Affordability Board, the Maine Association of Health Plans, Healthcare Purchaser Alliance of Maine, and the National Academy for State Health Policy.

Testifying in support of the original bill, Peter Hayes, CEO of Healthcare Purchaser Alliance ofMaine, wrote: “We support LD 1395, as it would provide policy makers, employers, and other stakeholders with a better understanding of the revenue that 340B hospitals in Maine generate from prescription drug sales to Maine employers, and how those dollars are used to support low-income patients and other hospital operations. “

Maine hospitals say they were relieved that the legislature removed the harsher requirements that they strongly opposed, leaving a leaner bill consistent with the AHA’s voluntary reporting practices that many Maine hospitals already follow. The AHA website lists 20 Maine 340B hospitals that have committed to its good stewardship principles.

Maine health system Northern Light Health “testified that the information requested in this bill includes proprietary business information, such as rates negotiated with contracted pharmacies and third party administrator software vendors that would put our organizations in breach of contract and would likely violate state and federal antitrust laws,” said Lisa Harvey-McPherson, the system’s vice president of government relations.

“During the work session on the bill, [committee] members discussed the AHA voluntary program and agreed to the value of the information posted,” Harvey-McPherson said. “Requiring hospitals to report the information to the Maine Health Data Organization engages all 340B participating hospitals in this best practice.”

“We appreciate that the legislature changed the reporting requirements that were originally proposed in the bill to the data called for by the AHA good stewardship principles,” said Jeffrey Austin, vice president of government affairs and communications at the Maine Hospital Association. “Maine hospitals are reliant on 340B discounts and we will continue to oppose any attempts to undermine the program.”

Mount Desert Island Hospital, a critical access hospital in Bar Harbor, “adopted the AHA’s commitment to good stewardship principles of communicating the value of the 340B program, disclose the 340B estimated savings, and continue rigorous internal oversight,” hospital president and CEO Chrissi Maguire said. “LD 1395 mirrors these stated commitments made by many Maine Hospitals already. Protecting these precious and essential dollars is paramount to preserving access to services in our rural communities.”

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