Distressed Rural Hospitals that Downgrade into Emergency Centers Could Gain 340B Eligibility

Editor’s Note: The 340B Report team is working hard on a special report on key developments from the 340B Coalition Winter Conference Feb. 10-12 in San Diego. We do not plan to publish this Thursday’s edition. Expect to see a detailed look at the conference next week. If there is breaking news in the meantime, we will be in touch. Please spread the word about 340B Report!

Distressed Rural Hospitals that Downgrade into Emergency Centers Could Gain 340B Eligibility

A new bill in the U.S. House to let rural hospitals at risk of closure survive by scaling down into outpatient-only, 24-hour emergency care centers would make these new centers eligible for 340B drug discounts.

Rep. Jodey Arrington (R-Texas), a Ways & Means Committee member, announced his Save Rural Communities Act, H.R. 5808, during last week’s National Rural Health Association (NRHA) policy institute in Washington. His bill would let financially distressed critical access hospitals (CAHs) and so-called rural Prospective Payment System (PPS) hospitals scale back into a new provider classification—Rural Emergency Access Centers (REAC). According to Maggie Elehwany, NRHA Vice President of Government Affairs and Policy, there are about 800 rural PPS hospitals (rural hospitals that are not CAHs, Rural Referral Centers, or Sole Community Hospitals). About 200 of the rural PPS hospitals are rural Medicare Dependent Hospitals (MDHs)—the least profitable and most vulnerable of all rural hospitals, Elehwany says.

CAHs have been eligible for the 340B program since 2010, and those becoming REACs would remain eligible. MDHs and other rural PPS hospitals currently are ineligible for 340B.

The Chartis Center for Rural Health just released a study finding that 453 rural hospitals are vulnerable to closure based on performance levels similar to shuttered rural hospitals at the time of their closure. It said 216 are “most vulnerable” to closure. Of these 97 are CAHs and 119 are categorized as “rural and community hospitals.”

H.R. 5808’s best chance of enactment is as a rider to a higher-profile healthcare bill on a fast track in Congress.

HRSA Audits Finds Two More Drug Manufacturers Overcharged 340B Providers

Lupin Pharmaceuticals and its Gavis Pharmaceuticals subsidiary charged 340B covered entities more than the 340B ceiling price for their covered outpatient drugs and must make repayments to affected entities, according to new fiscal year 2019 drug manufacturer audit results posted on the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) website. HRSA auditors also found that both companies did not submit quarterly pricing data to OPA as required and had incorrect records in the OPA Information System (OPAIS) 340B program database. Lupin bought Gavis in 2015. At the time, Lupin described itself as the fifth largest generic drug company in the United States.

Acadia Pharmaceutical Posts Limited Distribution Notice on OPA Website

Acadia Pharmaceuticals recently announced on the OPA website it is limiting distribution of Nuplazid, which is prescribed to treat hallucinations and delusions associated with Parkinson’s disease. The notice tells 340B covered entities what channels to use to obtain the medicine at its 340B discounted price.

Tweets of Note

@ProtectKYHealth: SB50 supporters tout that it “protects the 340B program.”  However, it isn’t operationally feasible. https://cknj.com/content/senate-bill-would-hurt-healthcare-access

@KyPharmAssoc: While some have raised concerns about #SB50’s impact on 340b hospitals & facilities, bill sponsor @maxwellwise has made clear: carve out legislation does not interfere with proper use of the 340b program. #kyga20 #kyleg

@natlawreview:  CMS Advances 340B Drug Acquisition Cost Survey to OMB and Solicits Final Comments Directly to OMB https://ow.ly/hjG130qhPlI  #healthcare

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