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The new non-hospital 340B covered entity group 340B Grantees says its work will include outreach, education, lobbying, and litigation.

Non-Hospital 340B Entities Form Group to Fight on Their Own Behalf at National and State Levels

Non-hospital 340B covered entities have formed a group called 340B Grantees to fight on their own behalf on legislation, in courts, and perhaps in politics at the federal and state levels.

340B Grantees hasn’t formally announced itself yet and is just getting off the ground. It will be a 501(c)(4) nonprofit social welfare organization for federal tax purposes, according to one of its founders. Donations to it will not be tax-deductible. But 340B Grantees, if it wishes, will be able to engage in partisan politics, unlike charities or foundations set up under section 501(c)(3) of the federal tax code. AARP and the National Rifle Association are two of the best-known 501(c)(4)s.

The National Association of Community Health Centers is a 501(c)(3) organization, which limits how much lobbying and political activity it can engage in. 340B Health and PhRMA are 501(c)(6) trade groups. 501(c)(6)s have no lobbying restrictions. However, members may not deduct their dues payments attributable to lobbying.

“Advocacy for the 340B program directly impacts public health, especially in communities that have had historic healthcare disparities,” the new group says on its website. It says its advocacy on its members’ behalf “can be specific to the 340B program or any tangential matters that hinder members from full access to the benefits of the program.” It said its work will include “outreach, education, and lobbying of federal and state legislatures bodies, as well as individuals and agencies of the executive branches of federal and state governments. Additionally, when warranted, advocacy can include litigation through federal or state courts.”

According to the U.S. Internal Revenue Service, 501(c)(4) groups can lobby on legislation as their primary activity. They also can engage in political campaigns for or against candidates or ballot measures provided that such activity is not the group’s primary activity. 501(c)(4)s can make independent expenditures supporting or opposing federal and state candidates. They also can create connected political action committees (PACs) that conduct all their political activities out of a separate segregated fund.

340B Grantees sprouted from another non-hospital covered entity group, Ryan White Clinics for 340B Access (RWC-340B). Its three founding board members—Shannon Stephenson, Mark Malahosky, and Rob Renzi—are all RWC-340B executive committee members. All three are leaders of community health care providers with multiple types of 340B entities. Stephenson is president and CEO of Cempa Community Care in Tennessee, which includes federally qualified health center look-alikes, HIV/AIDS clinics, and sexually transmitted disease clinics enrolled in 340B. Malahosky is vice president of pharmacy services at Trillium Health, a Rochester, N.Y.-based organization with both an HIV/AIDS clinic and FQHC look-alikes in 340B. Renzi is CEO of Big Bend Cares, a Tallahassee, Fla., organization with a Ryan White clinic and STD clinic in 340B.

“Almost four years ago, I dreamed about a 340B focused organization for all grantees, that held training conferences and other opportunities for collaboration,” said Stephenson, who also is president of RWC-340B. “Thankfully, I work alongside some great leaders from various organizations who came together to start making this dream a reality.”

“We started to come together about a year ago to have a place where all non-hospital grantee types could come together for advocacy specific to 340B under one roof,” Malahosky said. He cited Trillium’s current work with other New York State grantee covered entities in opposition to the state’s transfer of Medicaid managed care drug benefits to Medicaid fee for service, “which will have a profound impact on all grantee types, not just Ryan White clinics.”

Stephenson and Malahosky both said 340B Grantees is meant to supplement, not replace, the work on 340B being done by others. Membership is open to “organizations that participate directly in the federal 340B drug pricing program as a non-hospital covered entity type,” according to its website. Stephenson said, “Hospitals that also participate in 340B as another grantee type may also join.”

The new group will be subdivided into regional chapters. There are three for now. Stephenson heads the Southeast chapter, Renzi the Gulf Coast/Caribbean chapter, and Malahosky the New York/New England chapter.

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