A COVID-19 patient in an ambulance with two emergency technicians
Congress as soon as Friday could pass legislation addressing hospitals’ loss of eligibility for 340B drug discounts due to COVID-19-related changes in payer mix.

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Congress Is Close to Passing a Spending Bill that Likely Will Address Hospitals’ Loss of 340B Eligibility During Pandemic

Legislation addressing hospitals’ loss of eligibility for 340B drug discounts due to COVID-19-related changes in payer mix could reach President Biden before Friday at midnight. The language would not be as beneficial to such hospitals as standalone bipartisan bills in the House and Senate.

The 340B legislation is expected be included in a fiscal year 2022 omnibus appropriations bill that Congress is hammering out. Lawmakers have not passed any of the 12 appropriations bills for the year that began Oct. 1. Spending has been continued under a series of stopgap bills. The last of these expires at the end of the day March 11.

House and Senate leaders reportedly are close to reaching an agreement on a single bill to fund the entire government through Sept. 30. The House could vote on it later today or tomorrow morning. The Senate would vote in time to get the bill to the president for his signature before Saturday, March 12. The bill also includes emergency funding for Ukraine and is likely to include more COVID-19 aid.

A draft of the health section of the omnibus spending bill dated yesterday and time-stamped at 8:43 p.m. included language to help disproportionate share (DSH) hospitals, children’s hospitals, free-standing cancer hospitals, rural referral centers, and sole community hospitals forced out of 340B for reasons related to the pandemic.

Hospitals that already have lost their eligibility would become eligible again on the date the bill becomes law, not retroactive to the date on which they became ineligible. This apparently would preclude them from obtaining retroactive 340B pricing for purchases during the time they were ineligible. To regain eligibility prospectively under the law, hospitals would have to provide an attestation to HHS about how the COVID-19 emergency affected their ability to meet the DSH adjustment percentage eligibility requirement.

If the 340B provision remains in the bill and it is signed into law by President Biden, it will be the first 340B legislation since December 2010, when Congress passed a technical correction to the Affordable Care Act pertaining to children’s hospitals eligibility for 340B pricing on drugs designated for orphan diseases or conditions.

Standalone bipartisan bills have been introduced in the House and Senate to waive the DSH minimum percentage requirement for hospitals that began participating in the program during or prior to the COVID-19 emergency. Neither bill has advanced, though.

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