A Note from 340B Report CEO and Publisher Ted Slafsky
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The COVID-19 Pandemic Is No Time for a 340B Drug Cost Survey, Hospitals Say
Hospitals are upset with the Centers for Medicare & Medicaid Services (CMS) for forging ahead Friday with a controversial survey of their costs for 340B-purchased drugs. They say it is inappropriate to impose a survey on them—especially one aimed at lowering their Medicare reimbursement—in the middle of a deadly pandemic, and they want the data collection stopped. Completed surveys are due in 17 days, on May 15.
“We are extremely disappointed CMS chose to move forward with this requirement, which can only serve to limit the value of this important program,” Erin O’Malley, Senior Director of Policy, America’s Essential Hospitals, told 340B Report. “This requirement will burden hospitals at the worst possible time—as they struggle to cope with the COVID-19 pandemic. We urge the agency to reconsider its decision.”
“At a time when these hospitals are focused on the enormous impact of the COVID-19 pandemic, they should not be burdened with participating in a survey that will consume precious time and resources in the name of cutting Medicare payments,” hospital group 340B Health said in an April 24 statement. It said flaws in the survey “require that the survey be withdrawn.”
“It is a horrible game CMS is playing, and what a terrible sense of timing,” an attorney who advises clients on Medicare and drug pricing matters said.
CMS’s survey instructions say all hospitals other than critical access hospitals that were enrolled in 340B during the fourth quarter of 2018 and the first quarter of 2019 must take the survey. CMS projects that it will take hospitals only 48 hours to find and collect data and complete the survey. Hospital groups say that’s a gross underestimate. Possibly in response, and in a major change from the survey instructions CMS posted for public comment in February, the final instructions issued last Friday let hospitals pick between two options:
- take the “Detailed Survey,” in which they have 22 days to provide acquisition costs for an estimated 1,100 national drug codes and 400 Healthcare Common Procedure Coding System codes for 340B-purchased drugs reimbursed by Medicare Part B during a half-year period
- take a “Quick Survey,” in which they indicate that they prefer to let CMS use 340B ceiling prices obtained from the Health Resources and Services Administration (HRSA) “as reflective of your hospital acquisition costs. After selecting this option, the survey is complete.”
On their firm’s website, McDermott Will & Emery health care attorneys say hospitals picking the quick survey option also must “make an affirmative representation to CMS that it acquires all 340B drugs at the 340B ceiling price. Such a statement may not be accurate for some hospitals.”
Other attorneys whose practices include 340B say CMS’s motives for giving hospitals the quick survey option are opaque.
In a client health care alert yesterday, attorneys at K&L Gates said the quick survey option could be CMS’s way of answering hospitals’ criticism about the difficulty of completing the survey during the pandemic. One attorney we reached out to observed that CMS might boost the survey response rate by giving hospitals a relatively easy choice. In public comments on CMS’s survey proposal, hospital groups said they doubted that CMS’s survey methodology, as proposed in February, would obtain a response rate adequate to yield statistically valid results. Another attorney we reached out to said CMS might be trying to set the stage for using 340B ceiling prices as an alternative to acquisition cost survey data as a reimbursement methodology.
It is unclear if CMS can make hospitals take the survey. The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) conceivably could threaten to exclude providers who do not take the survey from Medicare, one of the attorneys we contacted pointed out. Withholding hospitals’ Medicare Part B drug reimbursements “is not a remedy that CMS has in its tool chest,” the attorney said.
Specialty Pharmacy: Sustaining Patient Engagement and 340B Savings During COVID-19
340B health systems that have created specialty pharmacy services continue to provide high-touch, personalized support to their patients and generate 340B savings even in the midst of the COVID-19 pandemic.
Embedded pharmacists and liaisons excel at maintaining patient engagement remotely based on their long-standing patient relationships. Though specialty pharmacy teams cannot see patients in the clinic right now, they can still conduct clinical assessments, provide clinical input, coordinate refills, secure financial assistance, provide counseling, and ensure medication adherence.
As an integrated part of the care team, with access to the EHR, these clinicians can also coordinate with health system physicians to ensure continuity of patient therapy and treatment even through this unforeseen disruption.
Enhancing Patient Care & Outcomes During the Covid-19 Pandemic
There are significant benefits of offering embedded specialty pharmacy service during this crisis says Brandon Hardin, Clinical Services Manager at Trellis Rx. “A health system’s specialty pharmacy team ensures continuity of care. In addition to addressing patients’ concerns about COVID-19, clinical pharmacists can help navigate drug access challenges.”
Hardin shared recommendations on how health system specialty pharmacy teams can support patients and providers in a recent article. One suggestion: “take responsibility for sharing patient care guidelines published by medical associations, such as the American College of Rheumatology.”
Brandon Newman, Vice President of Clinical Affairs at Trellis Rx, identified the ability to monitor if patients are responding to their therapy regimen as another benefit of offering specialty pharmacy services. “Clinical pharmacists can collect patient-reported outcomes measures over the phone using tools like the RAPID-3 assessment for rheumatoid arthritis,” he explained. “This data indicates if a patient’s condition is under control and allows the care team to quickly intervene if it isn’t.” Newman discussed measuring disease-specific outcomes in a recent article and will address the topic in a webinar on May 12.
A Much-Needed Revenue Source for Health Systems
340B covered entities that have an on-site specialty pharmacy service also face less financial uncertainty as they navigate the impact of the COVID-19 pandemic. Health systems throughout the nation face significant budget shortfalls due to postponed elective procedures and temporary closures of specialty practices, but those with an established specialty pharmacy can rely on its revenue stream.
I asked Stuart Deal, who leads the Summa Health Specialty Pharmacy in Akron, Ohio, to elaborate. He shared: “As a specialty pharmacy service sustains patient engagement through this period, the resulting financial savings will also support the mission even as other areas of the health system suffer temporary setbacks. It’s a win-win for the community, patients, and the health system.”
Is Now the Right Time to Start a Specialty Pharmacy?
The COVID-19 pandemic underscores strategic reasons 340B health systems should offer specialty pharmacy services: to enhance patient care, improve clinical outcomes, and boost financial results.
As such, the pandemic provides an excellent opportunity to gain support for starting or enhancing a health system specialty pharmacy service. Pharmacy leaders can learn about key factors required to successfully launch a program at their organization by watching a Trellis Rx webinar on the topic or by contacting Trellis Rx. They can also utilize a third party such as Trellis Rx to review their current specialty pharmacy program, evaluate its effectiveness and determine whether there is an opportunity for growth. Trellis Rx conducts these analyses free of charge.
Health Centers and Hospitals Want Changes in CARES Act Relief Distribution
The $100 billion in COVID-19 health care relief under the CARES Act “is largely out of reach for health centers serving the populations who are disproportionately suffering higher rates of illness and mortality from the virus,” the National Association of Community Health Centers (NACHC) warns.
The American Hospital Association, meanwhile, says the way HHS is distributing CARES Act health care relief “has left many hospitals and health systems on the front lines with limited resources to serve their communities.”
HHS last week announced it is allocating $50 billion of the CARES Act money to providers proportional to their share of 2018 net patient revenue, $10 billion to hospitals in COVID-19 hot spots, $10 billion to rural hospitals and health clinics, and $400 million to Indian Health Service facilities. Skilled nursing facilities, dentists, and providers that solely take Medicaid will get further, separate funding, HHS said. It is believed HHS is reserving the remaining money to reimburse providers for delivering COVID-19 care to the uninsured.
Designating half of the $100 billion based on each provider’s share of total patient revenue in 2018 largely penalizes the cost-effective approach of health centers, which care for 30 million people across the country, including many uninsured and underinsured patients, but account for only around 0.6 percent of patient revenue nationally, NACHC President and CEO Tom Van Coverden noted on April 23. Almost half of the nation’s health centers are located in rural areas that include COVID-19 hot zones, but they will largely be ineligible for the $10 billion set aside for providers in COVID-19 hotspots and the $10 billion for rural providers, NACHC said. Health centers have also been left off the list of provider groups that care for Medicaid patients and were targeted for additional funding, the group added.
“Health centers are already paying a heavy price in this pandemic,” said Van Coverden. “So far, over 1,380 health center workers have tested positive for the virus. They include doctors, nurses, and frontline staff who are working tirelessly to reduce the spread and the burden on our nation’s hospitals. We are not asking for a blank check in this fight, but their sacrifice and hard work should not get lost in the fine print when it comes to dividing the resources. More needs to be done to help these vital community health center safety net providers.”
Health centers did get $600 million in additional funding this fiscal year under the follow-up COVID-19 stimulus bill President Trump signed on Thursday. Due to the way the bill was structured, it was unclear last week whether centers would be able to use the money for COVID-19 response generally or whether they would have to use it more narrowly for testing-related purposes. NACHC told 340B Report it appears that centers may use the aid more broadly.
In a letter yesterday to HHS Secretary Alex Azar, AHA President and CEO Richard Pollack said AHA estimates that hospitals and health systems will get only $22 billion of the $50 billion in CARES Act relief HHS has made available to date. “In other words, hospitals and health systems that are supporting the nurses and physicians to care for patients, building new sites of care to minimize the spread of the virus, and purchasing the ventilators, drugs, and supplies to care for the critically ill, received less than a fair share given their role,” he said. “We would appreciate that HHS better target funding for hospitals and health systems, which serve as the nation’s primary source of COVID-19 testing and treatment.”
Most Community-Owned Rural Hospitals Will Qualify for Paycheck Protection Act Loans
The Small Business Administration published an interim final rule today clarifying that most community-owned rural hospitals will be eligible for forgivable loans under the Paycheck Protection Program.
The rule states that hospitals that would otherwise be eligible for the loans will not be deemed ineligible “due to ownership by a state or local government if the hospital receives less than 50% of its funding from state or local government sources, exclusive of Medicaid.” The National Rural Health Association sent an April 6 letter to congressional leaders asking them to ensure that small rural public hospitals “can access this important program.” The American Hospital Association made a similar appeal to the SBA on April 8.
The National Association of Community Health Centers on April 8 asked congressional leaders to ensure that any future COVID-19 relief bill would let about 100 health centers with more than 500 employees qualify for the loan program. Its request did not make it into the relief bill that Congress approved and President Trump signed last week. The bill injected another $300 billion into the Paycheck Protection Program. The initial $349 billion in program funding under the CARES Act was exhausted in about a week.
Drug Manufacturer AkaRx Posts Limited Distribution Notice on HRSA Website
The manufacturer of a drug for adults with chronic liver disease who are prone to easy or excessive bruising and bleeding has posted a limited distribution notice to 340B providers on the Health Resources and Services Administration (HRSA) website. AkaRx’s notice explains how 340B covered entities can buy Doptelet through the manufacturer’s network of specialty drug distributors or from one of its specialty pharmacy partners.
Tweets of Note
Good actors within the program put and provide much needed care to vulnerable or uninsured patients. is bringing to light the strain critical access hospitals and other front-line providers have been facing for years.
Another skirmish in ongoing battle of government vs. providers to capture manufacturers’ deep #drug discounts! 💰💰