S. 2312: The Helping Ensure Low-income Patients have Access to Care and Treatment (HELP) Act Original Sponsors: Sen. Bill Cassidy (R-LA)

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1 S. 2312: The Helping Ensure Lw-incme Patients have Access t Care and Treatment (HELP) Act Original Spnsrs: Sen. Bill Cassidy (R-LA) SEC. 2. MORATORIUM ON REGISTRATION OF NEW NON-RURAL SECTION 340B HOSPITALS AND ASSOCIATED SITES Impact n 340B Hspitals Places a 2-year freeze n enrllment f DSH hspitals and their child sites, preventing them frm registering fr the 340B prgram unless they were identified by HRSA as participating as f Dec. 31, This includes hspitals already enrlled in 340B. Requires final regulatins t be prmulgated during 2 year mratrium creating new eligibility requirements fr private nnprfit disprprtinate share (DSH), children s, and cancer hspitals: Hspitals that qualify by being frmally granted gvernmental pwers must prvide a certificatin describing their pwer in detail; the pwer must be bna fide and nt merely t prvide services n behalf f the gvernment; the pwer must be t tax, issue gvernment bnds, r quarantine individuals; and the certificatin must be publicly available. Hspitals that qualify by having a cntract with state r lcal gvernment must submit a cpy f the cntract fr review; the Secretary must determine that the cntract creates an enfrceable bligatin t prvide direct medical care t lw-incme patients ineligible fr Medicare and Medicaid that is at least 10% f a hspital's ttal csts f care; and the cntract must be publicly available. Requires final regulatins t be prmulgated during 2 year mratrium creating new child site eligibility requirements fr DSH, children's, and cancer hspitals: Site must be listed n the hspital's mst recently filed Medicare cst reprt n a reimbursable line and the cst reprt must shw that services prvided at the site have assciated csts and charges fr Medicare utpatient services; Site must be whlly wned by the cvered entity; Secretary must have made a prvider-based determinatin fr the site; Site must prvide a full range f utpatient services, in additin t drugs; and Site must adhere t the parent hspital's charity care plicy and any sliding fee scale plicy f the hspital. Requires DSH, children s, and cancer hspitals t reprt t the Secretary annually: Aggregate revenue minus aggregate acquisitin csts fr 340B drugs brken ut by hspital and each child site; Patient mix by payer surce fr each child site; Charity care csts incurred at each child site; Percent f ttal revenue at each child site derived frm infusin r injectin f physician-administered drugs; and Names f all third-party vendrs cntracted with t prvide 340B services, brken dwn by hspital and each child site. Limits existing 340B hspitals ability t access savings and prvide patient care since it freezes child site enrllment. Prevents new hspitals that treat high levels f lw-incme ppulatins frm accessing 340B savings t help cver the cst f care. A mratrium is unnecessary given dcumentatin f high levels f care prvided by 340B hspitals t lw-incme ppulatins. Culd be extended r made permanent. New eligibility requirements are unnecessary given evidence prving 340B hspitals prvide high levels f uncmpensated care and services t lw-incme ppulatins. The prpsed new requirements wuld dramatically reduce the number f 340B hspitals. Requiring DSH, children s and cancer hspitals t reprt infrmatin n levels f charity care des nt reflect the brad and diverse ways hspitals use 340B savings t help patients. Lking at aggregate revenue presents an inflated and misleading picture f the impact f the 340B prgram. True 340B savings are the difference between what a hspital paid under 340B and what a hspital wuld have paid withut 340B.

2 SEC B CLAIMS MODIFIER Impact n 340B Hspitals Require DSH, children s, and cancer hspitals t use mdifiers t identify 340B drugs when billing all public and private payers. Require all cvered entities t use mdifiers t identify 340B drugs when billing Medicaid fee-fr-service and Medicaid managed care plans as well as Medicare Part B, Medicare Advantage, and Medicare Part D, effective 6 mnths after enactment and applying t claims submitted n r after that date. Requiring mdifiers t identify 340B drugs when billing culd result in reduced reimbursement rates fr 340B drugs cntrary t the intent f the prgram. SEC. 4. REPORTS TO CONGRESS Impact n 340B Hspitals Require HHS OIG t issue a reprt n later than 2 years after enactment n the level f charity care prvided by DSH, children's, and cancer hspitals and separately by their child sites. Require a GAO reprt n later than 1 year after enactment analyzing cntracts private nn-prfit hspitals have with state and lcal gvernment, assessing the amunt f care bligated under the cntracts t lw-incme patients, and analyzing hw the cntracts define lw-incme patients and whether the Secretary reviews such determinatins. Infrmatin cllected evaluates hspitals based n charity care, which des nt reflect the brad and diverse ways hspitals use 340B savings t help patients. Require a GAO reprt n later than 2 years after enactment n the difference between aggregate grss reimbursement and aggregate acquisitin csts fr 340B drugs, fr each cvered entity. 340B Health Oppses S

3 H.R Blck Medicare Part B Cuts t 340B Original Spnsrs: Rep. David McKinley (R-WV); Rep. Mike Thmpsn (D-CA); Rep. David Kustff (R-TN); Rep. Kathy Castr (D-FL); and Rep. Je Curtney (D-CT) 340B Health Psitin H.R wuld reverse the damaging Medicare Part B cuts t 340B hspitals. The cuts resulted in a nearly 30% reductin in Part B drug payments t certain 340B hspitals and intrduced new mdifier requirements t identify 340B drugs when billing under the Medicare utpatient prspective payment system (OPPS). Reversing the Part B payment reductin wuld result in a restratin f $1.6 billin t certain 340B hspitals, allwing 340B hspitals t use thse resurces t help lw-incme patients in their cmmunities. 340B Health Supprts H.R and Requests Lawmakers Cspnsr this Bill.

4 H.R The 340B Prtecting Access fr the Underserved and Safety-net Entities (PAUSE) Act Original Spnsrs: Rep. Larry Bucshn (R-IN) and Rep. Sctt Peters (D-CA) SEC. 2. MORATORIUM ON REGISTRATION OF CERTAIN NEW 340B HOSPITALS AND ASSOCIATED SITES Place a 2-year freeze n enrllment f DSH hspitals and their child sites, preventing them frm registering fr the 340B prgram unless they were identified by HRSA as participating as f the day befre enactment f the bill. Limits existing 340B hspitals ability t access savings and prvide patient care since it freezes child site enrllment. Prevents new hspitals that treat high levels f lw-incme ppulatins frm accessing 340B savings t help cver the cst f care. A mratrium is unnecessary given dcumentatin f high levels f care prvided by 340B hspitals t lw-incme ppulatins. Culd be extended r made permanent. SEC. 3. DATA REPORTING TO IMPROVE THE TRANSPARENCY REGARDING HOW 340B HOSPITAL COVERED ENTITIES PROVIDE CARE FOR PATIENTS Require DSH, children s, and cancer hspitals t reprt t the Secretary annually: Number and percentage f individuals given 340B drugs, by insurance status (including Medicare, Medicaid, cmmercial cverage, and uninsured), fr each hspital and each child site; Ttal csts incurred at each child site; Ttal charity care csts incurred at each child site; Aggregate amunt f grss reimbursement received by each hspital, including its child sites, fr all 340B drugs and the hspital's aggregate acquisitin csts fr all 340B drugs; Name f all third-party vendrs r thers that the hspital cntracts with t prvide 340B-assciated services; and Fr private nn-prfit DSH hspitals nly that qualify by having a cntract with state r lcal gvernment, the cntract t be reviewed by the Secretary. Creates reprting requirements fr DSH, children s, and cancer hspitals, cllecting infrmatin that wuld nt reflect the amunt hspitals save thrugh 340B r hw they use 340B savings t help patients. Direct the Secretary t issue interim final regulatins n later than 6 mnths after enactment t carry ut the new transparency requirements and finalize the regulatins befre the enrllment mratrium perid ends. Require HHS OIG t issue a reprt n later than 2 years after enactment that reprts n the level f charity care prvided by DSH, children's, and cancer hspitals and separately by their child sites. Require GAO t issue an initial reprt n later than 1 year after enactment that analyzes state and lcal gvernment cntracts fr private nn-prfit hspitals; assesses the amunt f care such cntracts bligate t lw-incme patients ineligible fr Medicare and Medicaid; and analyzes hw these cntracts define lwincme individuals and whether the Secretary reviews such determinatins. Requires the GAO and OIG reprt t Cngress infrmatin cllected thrugh new reprting requirements that evaluates hspitals based n their level f charity care, which des nt reflect the brad and diverse ways hspitals use 340B savings t help patients Require GAO t issue a final reprt n later than 2 years after enactment regarding the differences between aggregate grss reimbursement and aggregate acquisitin csts received by DSH, children's, and cancer hspitals, including their child sites, fr 340B drugs. 340B Health Oppses H.R

5 S The Ensuring the Value f the 340B Prgram Act f 2018 Original Spnsrs: Sen. Chuck Grassley (R-IA) Require hspitals t reprt as part f their annual Medicare cst reprt filing their aggregate acquisitin csts fr 340B drugs and aggregate revenues received frm all payers fr thse drugs, disaggregated by insurance status, including Medicare, Medicaid, Children's Health Insurance Prgram (CHIP), private health insurance, and uninsured. The language f this bill des nt accurately capture hspital savings. Hspitals accrue a financial benefit thrugh 340B participatin by acquiring utpatient drugs at discunted prices resulting in savings as cmpared t what hspitals wuld have paid fr thse drugs utside the 340B prgram. The 340B prgram des nt impact aggregate revenues, since payers typically pay the same amunt as they wuld absent the 340B prgram. The data cllected in this bill wuld verstate 340B savings. 340B Health Has Cncerns with S

6 H.R The 340B Optimizatin Act Original Spnsrs: Rep. Earl Buddy Carter (R-GA) and Rep. Chris Cllins (R-NY) Requires DSH hspitals t reprt infrmatin their utpatient rate fr the mst recent year fr bth the cvered entity and child sites as part f annual recertificatin beginning n r after January 1, Defines Lw-incme utpatient utilizatin rate as Medicaid utpatient revenue (bth fee-fr-services and managed care) as a percentage f ttal utpatient revenue plus utpatient charity care charges as a percentage f ttal utpatient charges. It is unclear whether the infrmatin n child sites may be prvided in a lump sum fr all child sites r whether the infrmatin must be prvided n a facility by facility basis. By narrwly fcusing n Medicaid utpatient revenue and utpatient charity care, this bill wuld paint an incmplete picture f the rle 340B hspitals play in caring fr lwincme and rural patients and cmmunities. 340B hspitals prvide a high vlume f care t lw incme patients, bth n an inpatient and utpatient basis. In additin, charity is nt indicative f a hspital s level f care t lw-incme patients, it des nt include bad debt csts (representing csts f underinsured wh did nt qualify under the hspital s financial assistance plan) and under-reimbursement by public payers, such as Medicaid, which can be significant. Requires HRSA t submit a reprt t Cngress n the infrmatin submitted by cvered entities. The reprt t Cngress wuld nly cllect data frm 340B hspitals and, as such, wuld nt demnstrate hw 340B hspitals cmpare t nn-340b hspitals. 340B Health Has Cncerns with H.R

7 H.R Rural Hspital Frntier Fairness Act SEC. 3. ELIGIBILITY OF CERTAIN SOLE COMMUNITY HOSPITALS FOR DISCOUNTED DRUG PRICES UNDER THE 340B DRUG PRICING PROGRAM Original Spnsrs: Rep. Cllin Petersn (D-MN) and Rep. Sctt Tiptn (R-CO) A sle cmmunity hspital (SCH) that was classified as a SCH befre Octber 1, 2015 and is lcated nt mre than 75 miles frm the clsest frntier state will be eligible t participate as a 340B cvered entity. A frntier state is a state in which at least 50 percent f cunties in the state are frntier cunties. A frntier cunty is a cunty in which the ppulatin per square mile is less than 6. H.R wuld grant 340B eligibility t certain SCHs in very rural states that d nt meet current 340B eligibility requirements. Currently, SCHs are eligible fr 340B s lng as they have a DSH adjustment percentage greater than r equal t 8% and are wned r perated by state r lcal gvernment, frmally granted gvernmental pwers, r are a nn-prfit hspital with a cntract with state r lcal gvernment. SCHs that qualify under this bill wuld nt be required t meet the abve criteria, but wuld need t be classified as an SCH befre Octber 1, 2015 and be lcated in clse prximity t frntier states. Apprximately 8 SCHs will becme eligible fr 340B under this bill. NOTE: This bill als includes prvisins utside f the scpe f the 340B prgram, which are nt addressed in this dcument. 340B Health Supprts H.R

8 H.R Clsing Lphles fr Orphan Drug Act Original Spnsrs: Rep. Peter Welch (D-VT) and Rep. Gregg Harper (R-MS) Amends the term cvered utpatient drug under Sectin 340B(e) f the Public Health Service Act fr rural referral centers, critical access hspitals, and sle cmmunity hspitals: The term cvered utpatient drug shall nt include a drug designated by the Secretary under sectin 526 f the Federal Fd, Drug, and Csmetic Act fr a rare disease r cnditin when transferred, prescribed, sld, r therwise used fr the rare cnditin r disease fr which such drug is s designated. Wuld allw rural hspitals t purchase rphan-designated drugs at 340B prices when used t treat cmmn cnditins r diseases. Many drugs apprved t treat a rare disease are als used t treat cmmn diseases. Under current law, 340B may nt be used fr an rphan-designated drug regardless f the purpse fr which the drug is used. This bill wuld cntinue that prtectin when a drug is actually used fr its rphan purpse, but permit 340B when the drug is used fr a cmmn purpse just like any ther drug. Nn-rural hspitals have always been permitted t use 340B fr rphan drugs regardless f the reasn fr which it was being used. This bill will help hspitals struggling t prvide care in underserved cmmunities stretch scarce resurces. 340B Health Supprts H.R and Requests Lawmakers Cspnsr this Bill.

9 H.R & S. 356 Hallways t Health Act Original Spnsrs Impact n 340B Cvered Entities Backgrund Infrmatin United States Huse f Representatives: Rep. Jhn Sarbanes (D-MD) Rep. Debbie Dingell (D-MI) Rep. Eric Swalwell (D-CA) Rep. Rsa DeLaur (D-CT) Rep. Jhn Larsn (D-CT) United States Senate: Sen. Debbie Stabenw (D-MI) Sen. Gary Peters (D-MI) Sen. Sherrd Brwn (D-OH) Al Franken (D-MN) Amends Sectin 340B (a)(4) f the Public Health Service Act t create a new cvered entity designatin a schl-based health center This legislatin wuld nt impact 340B hspitals, but wuld create a new cvered entity designatin by allwing health centers based in schls t qualify fr the prgram. Accrding t the Health Resurces and Services Administratin, nearly 2,000 schl- based health centers perate natinwide. H.R and S. 356 are Under Review by 340B Health.

10 H.R The Stretching Entity Resurces and Vulnerable (SERV) Cmmunities Act Original Spnsrs: Rep. Dris Matsui (D-CA) SEC. 2. SENSE OF CONGRESS RELATED TO THE PURPOSE OF THE PROGRAM Reiterates the lngstanding purpse f the 340B prgram, t enable "cvered entities t stretch scarce resurces as far as pssible, reaching mre patients and prviding mre cmprehensive services than withut such prgram." Ntes that cvered entities may use their prgram benefit t prvide free r discunted drugs t vulnerable patients, but this is nt the nly purpse f the prgram. Reiterates that prgram discunts are given t prviders, nt directly t patients. During the debate ver the prgram s creatin, Cngress explained that the prgram s purpse was t stretch scarce resurces as far as pssible, reaching mre eligible patients and prviding mre cmprehensive services. We supprt these effrts t reiterate the intent f the 340B prgram and appreciate that the legislatin underscres that Cngress intended fr the 340B discunt t help safety net prviders meet the needs f their patients, in a manner that best suits the needs f their cmmunity. SEC. 3. CODIFYING DEFINITION OF PATIENT UNDER 340B PROGRAM Defines the term "patient," with respect t which individuals are eligible t receive a 340B drug frm a cvered entity, as hw the term is defined in the 1996 guidance published by the Health Resurces and Services Administratin (HRSA). Clarifies that the Secretary f the Department f Health and Human Services (HHS) may nt implement the definitin f a 340B-eligible patient mre narrwly than hw HRSA defined the term in its 1996 guidance, including by limiting the definitin based n a patient's insurance status. 340B Health supprts imprving clarity in the 340B prgram by cdifying HRSA's definitin f a 340B-eligilbe "patient" int the 340B statute. 340B Health als supprts statutry language that ensures the definitin f a 340B patient cannt be interpreted mre narrwly than hw it has been applied ver the last 26 years, thereby prtecting hspitals' access t 340B savings and maintaining care fr lw-incme and rural patients. SEC. 4. NON-DISCRIMINATION WITH RESPECT TO COVERED ENTITIES Prhibits insurers frm discriminating against a cvered entity r its cntract pharmacy with regard t the level and amunt f reimbursement fr 340B drugs n the basis f 340B participatin. Prhibits insurers frm preventing r interfering with a patient's chice t receive 340B drugs frm a cvered entity r cntract pharmacy. These prhibitins wuld nt apply t Medicaid fee-fr-service (FFS). The 340B prgram enables hspitals, cmmunity health centers, and ther safety-net prviders thrughut the cuntry t better serve and treat their vulnerable patient ppulatins. Allwing payers t discriminate against 340B cvered entities by reducing reimbursement rates t these prviders is cunter t the intent t prvide 340B cvered entities with mre resurces t care fr vulnerable patients. We supprt effrts t prhibit insurers frm vilating the intent f the 340B prgram thrugh reduced reimbursement n 340B drugs t cvered entities.

11 SEC. 5. PROGRAM INTEGRITY Findings. Lists findings made by Cngress related t manufacturer cmpliance and transparency, nting evidence f drug manufacturer vercharges t cvered entities fr 340B drugs, directives made by Cngress t the HHS Secretary related t manufacturer versight that have nt been carried ut, a lack f transparency int manufacturer drug pricing infrmatin, and the limited number f HRSA audits cnducted f manufacturers. Manufacturer Audit Parity. Calls fr parity in the percentage f manufacturers audited by HRSA as cmpared t the percentage f 340B DSH hspitals audited. Requires that manufacturer audits include a review f a drug's average manufacturer price and best price as well as applicatin f the Medicaid drug rebate prgram's inflatinary penalty t ensure manufacturers calculate 340B prices crrectly. Deadline fr Ceiling Price Website. Requires HHS t implement a website prviding cvered entities with access t 340B ceiling prices, as already required under the 340B statute, n later than 90 days after the date f enactment f the legislatin. Civil Mnetary Penalty Clarificatins. Amends the existing requirement in the 340B statute fr HHS t assess civil mnetary penalties (CMPs) against manufacturers fr knwingly and intentinally vercharging cvered entities, clarifying that fr each instance f vercharging, the CMPs shall nt exceed the greater f $5,000 r 200 percent f the amunt f the vercharge. Currently CMPS shall nt exceed $5,000. Defines an "instance f vercharging," "knwingly," and "intentinally" cnsistent with the definitins in HRSA's final regulatin implementing manufacturer CMPs, published January 5, Prhibits the HHS Secretary frm implementing, administering r enfrcing the further delay f the January 5, 2017, final regulatin implementing CMPs published n June 5, 2018, thereby requiring HHS t enfrce the final regulatin effective July 1, Requires the Gvernment Accuntability Office (GAO) t issue a reprt evaluating the extent t which HHS is carrying ut the CMP prvisins n later than ne year after enactment f the legislatin. 340B Health and ur members have cnsistently supprted maintaining the utmst levels f integrity within the 340B prgram, and we are pleased that this bill prmtes balanced versight t hld drug manufacturers accuntable fr their bligatins under the 340B prgram. We appreciate that the bill highlights evidence f manufacturers vercharging prviders and recgnizes that the Department f Health and Human Services (HHS) has nt implemented civil mnetary penalties (CMPs) t address these vercharges, as required under the 340B law. Calling n HHS t mve frward with CMPs t hld manufacturers accuntable fr prgram vilatins and clarifying hw manufacturers shuld calculate 340B prices will greatly imprve the 340B prgram. Requiring HHS t share 340B prices with prviders will als help them verify that manufacturers are charging the crrect prices and will imprve transparency in the 340B prgram. Cngress directed HHS t mve frward with a ceiling price website fr prviders eight years ag, but the agency has yet t make prices available. Penny Price Plicy. Cdifies in the 340B statute HRSA's lngstanding penny price plicy, cnsistent with HRSA's final regulatin published January 5, 2017, which requires a manufacturer t sell a cvered utpatient drug t a cvered entity at $0.01 when the ceiling price f the drug is zer as a result f the manufacturer increasing the price f the drug faster than the rate f inflatin. 340B Price Estimate fr New Drugs. Cdifies in the 340B statute directives fr hw manufacturers shuld estimate the 340B ceiling price fr new cvered utpatient drugs and issue refunds t cvered entities, if necessary, cnsistent with HRSA's final regulatin published January 5, Prhibitin Against Discriminatry Distributin. Prhibits manufacturers frm discriminating against cvered entities in the distributin f 340B drugs by requiring manufacturers t make cvered utpatient drugs available t cvered entities n the same terms and cnditins as drugs are ffered t nn-340b purchasers. In the event that HHS finds a manufacturer vilated the prhibitin and prevented a cvered entity frm accessing a cvered utpatient drug at a 340B price, the manufacturer must pay the cvered entity in the amunt f the 340B discunt.

12 SEC. 6. INCLUDING PROGRAMS FUNDED UNDER THE COMMUNITY MENTAL HEALTH SERVICES BLOCK GRANT OR THE SUBSTANCE ABUSE PREVENTION AND TREATMENT BLOCK GRANT AS COVERED ENTITIES Creates a new prvider eligibility categry under the 340B statute fr Substance Abuse and Mental Health Services Administratin (SAMHSA) grantees prviding behaviral health and substance use disrder services. SEC. 7. PREVENTING MEDICARE HOSPITAL OUTPATIENT PAYMENT CUTS FOR HOSPITALS THAT PURCHASE DRUGS UNDER 340B PROGRAM Reverses the Medicare Part B drug payment reductin that went int effect fr certain 340B hspitals January 1, 2018, as part f the 2018 Outpatient Prspective Payment System (OPPS) final rule. Requires that payments t 340B hspitals fr drugs prvided n r after January 1, 2018, be at the same rate as paid t nn-340b hspitals. The 2018 Medicare Hspital Outpatient Prspective Payment System (OPPS) final rule reduced drug payments t many 340B hspitals by nearly 30 percent, frcing hspitals t cut back n services, clse service sites, and let g clinicians and ther caregivers. The misguided payment reductin des nt save mney fr Medicare r the senirs it serves as cuts in reimbursement fr 340B drug are used t measure payment fr ther Part B services. Majrities in bth chambers f Cngress have expressed cncern ver the $1.6 billin payment reductin and we supprt reversal f this devastating cut. This means that the benefit f 340B discunts are being passed n t prviders that d nt meet strict eligibility criteria f treating lw-incme ppulatins that 340B hspitals must meet. 340B Health Supprts H.R and Requests Lawmakers Cspnsr this Bill.

13 H.R Requirements fr Certain 340B Cvered Entities Relating t Hspital Care fr Victims f Sexual Assault Original Spnsrs: Rep. Mimi Walters (R-CA) and Rep. Greg Walden (R-OR) Creates a new eligibility requirement fr certain disprprtinate share hspitals (DSH) t participate as 340B cvered entities. Within 12 mnths f the bill s enactment, in rder t participate as a 340B cvered entity, a DSH hspital that has an emergency department must have a plan t becme designated as a Sexual Assault Frensics Evidence (SAFE)-ready facility within 24 mnths f the bill's enactment. A SAFE-ready facility is a facility that emplys r cntracts with sexual assault frensic examiners such that a sexual assault frensic examiner is available r n call 24 hurs per day, every day f the year. A sexual assault frensic examiner is defined as either: a trained sexual assault nurse examiner; r a physician with specialized training n cnducting a medical-frensic examinatin. After 12 mnths f enactment, if the DSH hspital is nt designated a SAFE-ready facility, the hspital must have a plan in place t train relevant persnnel n sexual assault frensic evidence cllectin and a plan t meet requirements fr handing individuals wh visit the emergency department fr treatment relating t sexual assault. Fr these individuals, the hspital must: Infrm the individual the hspital is nt a SAFE-ready facility; Prvide the name and lcatin f the clsest SAFE-ready facility t the entity; Infrm the individual he/she may receive treatment at the hspital r be stabilized and transferred t the clsest SAFE-ready facility. If the individual chses t transfer, the hspital must: - Receive the individual s written cnsent fr transfer; - Cntact the clsest SAFE-ready entity t ensure a sexual assault frensic examiner is available at the facility; and - Stabilize and transfer the individual at n cst t the individual using fficial transprtatin f the entity. All 340B DSH hspitals must be designated as a SAFE-ready facility as f 24 mnths f enactment. The public website f the Department f Health and Human Services will prvide an annual list f each cvered entity designated as a SAFE-ready facility. H.R is Under Review by 340B Health.

14 DISCUSSION DRAFT t require certain cvered entities under the 340B drug discunt prgram t establish certain fee amunts charged t certain lw-incme patients fr 340B drugs Original Spnsrs: Rep. Michael Burgess (R-TX) Effective January 1, As a cnditin f 340B certificatin r recertificatin, disprprtinate share hspitals, freestanding children s hspitals, and freestanding cancer hspitals and assciated cntract pharmacies must nt charge a targeted lw-incme patient mre than the 340B ceiling price fr a cvered utpatient drug. a Targeted Lw-Incme Patient is a lw-incme individual, as defined by the cvered entity, that des nt have minimal essential health care cverage as defined by the Internal Revenue Cde. the 340B statute defines the 340B ceiling price as the maximum price that cvered entities can be required t pay manufacturers. The discussin draft put frward by Rep. Burgess that wuld require cvered entities t establish certain fee amunts charged t certain lw-incme patients fr 340B drugs wuld address hw DSH, children's, and cancer hspitals are able t use 340B savings. 340B hspitals use prgram savings t supprt care fr lw-incme and rural patients in a variety f ways, including but nt limited t, discunts n drug prices. The infrmatin hspitals reprt t the gvernment under existing federal requirements demnstrates that 340B hspitals prvide a high level f care t lw-incme patients thrugh uncmpensated and unreimbursed services. As such, it may be premature fr Cngress t limit the mechanisms by which hspitals may use prgram savings t supprt care fr lw-incme patients. There may be value in further explring data n the services hspitals are currently prviding t lw-incme ppulatins. Impacted cvered entities must prvide public ntificatin f bth the amunt t be charged and the cvered entity s definitin f lw-incme patient. 180 days after the date f enactment, the Secretary f Health and Human Services shall prmulgate final regulatins thrugh ntice-and-cmment rulemaking t: 1) Establish requirements fr a prcess fr impacted cvered entities t prvide public ntificatins f the amunt t be established fr targeted lw-incme individuals and hw the cvered entity will define a targeted lw-incme individual. 2) Ensure the security and prtectin f privileged r therwise cnfidential data frm unauthrized disclsure r re-disclsure. 340B Health Has Cncerns with this Discussin Draft.

15 DISCUSSION DRAFT t allw the Secretary f Health and Human Services t prescribe regulatins as necessary r apprpriate t carry ut the 340B drug discunt prgram, and fr ther purpses Original Spnsrs: Rep. Markwayne Mullin (R-OK) Prvides regulatry authrity fr the administratin t prescribe regulatins necessary r apprpriate t carry ut the prvisins f the 340B statute. We are cncerned with granting additinal regulatry authrity t administer the 340B prgram given that the agency has nt fully exercised the authrity Cngress enacted in The 340B statute authrizes HHS t issue regulatins t assess civil mnetary penalties (CMPs) against manufacturers that knwingly and intentinally vercharge cvered entities and t develp standards and methdlgy fr the calculatin f the 340B ceiling price. HHS published a final regulatin n January 5, 2017, t implement CMPs and address ceiling price calculatins. The agency initially planned t enfrce the final rule n April 1, 2017, but has delayed enfrcement f the final rule n five ccasins, mst recently until July 1, Mrever, HHS currently has the authrity t prvide guidance t cvered entities and manufacturers clarifying prgram cmpliance rules. Fr example, HRSA prpsed mnibus 340B guidelines in 2015 that wuld have addressed nearly every aspect f the 340B prgram. The current Administratin withdrew these prpsed guidelines frm cnsideratin, but HHS cntinues t have the authrity t issue such guidance. HHS has als issued infrmal guidance thrugh HRSA's Office f Pharmacy Affairs (OPA) and its cntractr, Apexus that educates prviders n HRSA's audit expectatin. Prviders appreciate this increased educatin and encurage HRSA t prvide mre f this guidance t imprve prgram cmpliance. 340B Health Has Cncerns with this Discussin Draft.

16 DISCUSSION DRAFT t require the Secretary f Health and Human Services t cnduct audits under the 340B drug discunt prgram in accrdance with generally accepted gvernment auditing standards, and fr ther purpses Original Spnsrs: N Spnsr Effective Octber 1, Requires 340B cvered entity audits by either manufacturers r the Secretary f Health and Human Services t be cnducted in accrdance with the mst recent generally accepted gvernment auditing standards issued by the Cmptrller General f the United States. Requires the Secretary f Health and Human Services audits f manufacturers t be cnducted in accrdance with the mst recent generally accepted gvernment auditing standards issued by the Cmptrller General f the United States. This Discussin Draft is Under Review by 340B Health.

17 DISCUSSION DRAFT t raise the minimum disprprtinate share adjustment percentage required f certain hspitals as a cnditin f qualifying fr the 340B drug discunt prgram, and ther purpses Original Spnsrs: Rep. Je Bartn (R-TX) Effective January 1, 2020 Changes eligibility requirements fr 340B disprprtinate share (DSH) hspitals, requiring DSH hspitals t have an 18 percent DSH percentage, a substantial increase frm the current percent threshld Under the current 340B statute, amunt required t be paid t a manufacturer f a cvered utpatient drug cannt exceed the average manufacturer price fr the drug reduced by the rebate percentage. This prpsal wuld increase the rebate percentage by five percent fr cvered entities, excluding disprprtinate share (DSH) hspitals and critical access hspitals. The discussin draft put frward by Rep. Bartn t raise the minimum disprprtinate share (DSH) adjustment percentage fr certain hspitals t qualify fr the 340B prgram wuld significantly scale back the number f hspitals in the prgram. Based n an analysis f Medicare cst reprt data cnducted by 340B Health, 573 hspitals, r 51 percent f the 1,115 DSH hspitals currently enrlled in 340B, wuld n lnger be eligible under this prpsed change. Especially cncerning is the fact that these 573 hspitals are safety-net prviders that treat high vlumes f lwincme patients. Fr example, the 573 hspitals that wuld lse eligibility prvided rughly $10.8 billin in uncmpensated and unreimbursed care. Lsing access t 340B savings wuld affect their ability t cntinue prviding this level f care t lw-incme ppulatins. 340B Health Strngly Oppses this Discussin Draft and Urges Members f Cngress t Oppse this Prpsal t Eliminate Certain Hspitals frm the 340B prgram.

18 DISCUSSION DRAFT t define the term patient fr purpses f the 340B prgram Rep. Chris Cllins (R-NY) Amends the 340B statute t create a definitin f 340B-eligible patient fr DSH, children s, and cancer hspitals t be applied n a prescriptin-by-prescriptin, rder-by-rder basis An eligible patient fr DSH, children s, and cancer hspitals wuld be an individual wh: Receives a health care service at a hspital r hspital utpatient facility registered under the prgram Receives an utpatient in-persn health care service frm a health care prvider emplyed by the hspital r wh is an independent cntractr f the hspital, such that the hspital bills fr the services Receives a drug rdered r prescribed by the hspital prvider, including any renewals f existing prescriptins, as a result f the in-persn utpatient service prvided by the emplyed r cntracted prvider Fr private nn-prfit hspitals with a cntract with state r lcal gvernment, receives a health care service r range f services frm the hspital pursuant t the cntract, including the rdering r prescribing f a 340B drug Is classified as an utpatient when the drug is rdered r prescribed, as demnstrated by hw the service was reimbursed by the payer r wuld have been reimbursed by Medicare in the absence f a payer Has a relatinship with the hspital such that the hspital creates and maintains auditable health care recrds demnstrating the hspital has a prvider-t-patient relatinship with the individual and respnsibility fr the individual s health care service that resulted in the prescriptin/rder fr the drug The discussin draft put frward by Rep. Cllins t define the term "patient" wuld shrink the 340B prgram by limiting the number f eligible patients and prhibiting the use f 340B drugs fr discharge prescriptins. This draft language clsely mirrrs changes t the definitin f a 340B-eligible patient prpsed by HRSA as part f its 2015 prpsed mnibus guidance, t which ver 800 hspitals bjected in cmments t HRSA. These prpsed changes wuld take away the ability t use 340B fr individuals wh are clearly patients f a hspital and fr whm prviders have been able t use 340B drugs since the prgram's inceptin. In particular, the prpsed changes wuld prevent use f 340B drugs fr discharge prescriptins written as a result f a patient's inpatient services, infusin rders written utside the hspital, even when the infusin is administered inside the hspital, certain emergency rm drugs, and in cases where the hspital des nt bill fr a physician's services. We are als cncerned that the bill may limit 340B nly t services prvided t lw-incme peple wh are nt cvered by Medicare r Medicaid. We are btaining clarificatin frm Rep. Cllins ffice. An individual will nt be a patient f a DSH, children s, r cancer hspital if: The individual is an inmate f a crrectinal facility The health care service received frm the hspital cnsisted nly f the administratin r infusin f a drug r dispensing f a drug fr subsequent administratin in the hme, withut a cvered entity prvider-t-patient encunter The health care service received frm the hspital is prvided by a health care rganizatin that has nly an affiliatin agreement with the hspital The primary relatinship between the individual and the hspital is ne f emplyment The Secretary shall prmulgate final regulatins n later than 180 days f enactment t define the term patient t reflect these requirements DSH, children s and cancer hspitals shall retain auditable recrds t demnstrate existence f the patient relatinship in accrdance with these requirements fr each prescriptin r rder fr a rlling perid f nt less than five years, r lnger if required by state r federal law Fr all ther cvered entities, the definitin f patient will nt change (i.e., have the meaning given in HRSA s 1996 patient definitin guidelines) 340B Health Strngly Oppses this Discussin Draft and Urges Members f Cngress t Oppse this Prpsal.

19 H.R t prvide fr certain user fees under the 340B drug discunt prgram Original Spnsrs: Rep. Chris Cllins (R-NY) Requires the Secretary f Health and Human Services t cllect a user fee frm certain 340B cvered entities: Impacts all 340B hspitals, including Disprprtinate Share (DSH) Hspitals, Freestanding Children s Hspitals (PED), Freestanding Cancer Hspitals (CAN), Sle Cmmunity Hspitals (SCH), Critical Access Hspitals (CAH), and Rural Referral Centers (RRC). All impacted hspitals wuld be subject t a user fee that shall nt exceed 0.1 percent f ttal 340B purchases. The fees cllected shall be used fr: Enhancing prgram integrity and versight activities, including thrugh audits f cvered entities and manufacturers. H.R. 6240, the Drug Discunt Accuntability Act, wuld create a user fee prgram applicable t hspitals that wuld be used t fund a variety f versight activities. 340B Health supprts versight in the 340B prgram f bth prviders and drug manufacturers. Hwever, we are cncerned abut HRSA s imbalanced versight. T date, HRSA has perfrmed nearly 1,000 audits f 340B prviders, the vast majrity f which have been f hspitals, but nly 11 audits f manufacturers. Further, HRSA has nt implemented key statutry requirements t imprve manufacturer versight despite extensive evidence f manufacturer vercharges. We are cncerned with prviding additinal resurces t HRSA given the lack f balance in its versight f the prgram, Earlier this mnth, HRSA delayed enfrcement fr the fifth time f its regulatin t assess civil mnetary penalties against manufacturers that knwingly and intentinally vercharge 340B cvered entities. HRSA has yet t implement a 340B price website s that prviders can verify they are being charged the crrect prices, despite changes in the law mandating thse activities eight years ag. Prmting access t clinical and cst-effective pharmacy services amng safety-net clinics and hspitals, such as thrugh: - Develpment f web-based system t cllect the fees. - Imprvement f the Office f Pharmacy Affairs Infrmatin System. - Imprvements t the cmpliance tl f the Office f Pharmacy Affairs, used t integrate all infrmatin related t cvered entities and manufacturers. The user fee is intended t supplement nt supplant apprpriatins and final regulatins shall be prmulgated nt later than 180 days after the date f enactment. Requires the Inspectr General f the Department f Health and Human Services t cnduct an annual review f the user fee prgram Prvides the Secretary f Health and Human Services authrity t directly hire a minimum f ten qualified candidates t permanent psitins t carry ut management and versight activities included in this bill. 340B Health Has Cncerns with this Legislatin.

20 DISCUSSION DRAFT Bettering Operatins and Oversight thrugh Senate-prcess Transparency in 340B Act r the BOOST 340B Act Original Spnsrs: Rep. Richard Hudsn (R-NC) Creates an ffice within the Health Resurces Services Administratin (HRSA) knwn as Administratr fr 340B Drug Discunt Prgram. This psitin wuld: Serve as a plitical appintee by the President with the advice and cnsent f the Senate. The current fficial in charge f the 340B prgram is a career fficial nt plitically appinted. Reprt directly t the Secretary f Health and Human Services. The current fficial in charge f the 340B prgram reprts t the HRSA Administratr. All functins under the 340B statute shall be transferred t this psitin n later than January 1, This Discussin Draft is Under Review by 340B Health.

21 DISCUSSION DRAFT require reprts by cvered entities regarding certain infrmatin n savings t cvered entities frm discunted prices under the prgram and the relatinship between such savings and charity care expenditures f such cvered entities Original Spnsrs: Rep. Larry Bucshn (R-IN) Creates annual reprting requirements fr hspitals, including any child sites, t be psted n the Health and Human Services website. It is unclear if reprting wuld be aggregated r if hspitals must reprt by individual child site. Reprting requirements wuld include: Infrmatin n 340B savings Estimate f aggregate 340B savings, which shall be calculated by determining the amunt by which Whlesale Acquisitin Cst (WAC) exceeds the 340B price. Infrmatin n revenue Estimate f the aggregate amunt reimbursement frm payers exceeds the 340B price fr a cvered utpatient drug. Infrmatin n payer mix, including percentage f verall inpatient days charges and verall utpatients visits charges by the cvered entity fr: Calculating 340B savings by cmparing a hspital's 340B drug acquisitin csts with the whlesale acquisitin cst (WAC) fr thse drugs wuld artificially inflate 340B savings. 340B savings shuld be measured by cmparing the 340B price t the price a cvered entity wuld have paid utside 340B (generally a grup purchasing rganizatin (GPO) price), which is usually much less than the WAC price. Reimbursement that hspitals receive frm payers fr 340B drugs is nt relevant t hw much hspitals save thrugh 340B participatin. Cllecting this infrmatin and cmparing it t 340B drug acquisitin csts makes it lk like hspitals are receiving a greater benefit frm 340B than they really are. The apprpriate cmparisn is the difference between the 340B price and the price that wuld have been paid utside f 340B. Medicare beneficiaries; Medicaid beneficiaries; Children s Health Insurance Prgram beneficiaries; Enrllees under any ther federal health care prgram; Individual market enrllees; and Uninsured r self-pay individuals. Infrmatin n uncmpensated csts, including: Unreimbursed fr Medicaid, CHIP, and state and lcal indigent care prgrams; Charity care csts; Csts f nn-medicare and nn-reimbursable Medicare bad debt expenses; Uncmpensated care; Ttal unreimbursed and uncmpensated csts; Net incme r lss; and Net incme n patient service revenue. 340B Health Has Cncerns with this Discussin Draft.

22 DISCUSSION DRAFT t require the Secretary f Health and Human Services t implement the Gvernment Accuntability recmmendatins fr the Health Resurces and Services Administratin relating t 340B cntract pharmacies Original Spnsrs: N/A Nt later than 3 years after the date f enactment, the Secretary f Health and Human Services shall implement all f the recmmendatins made by the Gvernment Accuntability Office June 2018 reprt t Cngress, Drug Discunt Prgram Federal Oversight f Cmpliance at 340B Cntract Pharmacies Needs Imprvement. These recmmendatins include: Requiring cvered entities t register cntract pharmacies fr each site f the entity fr which a cntract exists; Issuing guidance t cvered entities n the preventin f duplicate discunts under Medicaid managed care, wrking with the Centers fr Medicare & Medicaid Services as the Health Resurces and Services Administratin deems necessary t crdinate with guidance prvided t state Medicaid prgrams; 340B hspitals fully supprt cmpliance with the requirements f the 340B prgram, including cntract pharmacy rules. Since 2012, HRSA has dramatically increased its versight f 340B prviders, auditing mre than 1, B prviders and prviding mre educatin n the expectatins it has fr hspital cmpliance with existing rules. HRSA has cntinued t issue FAQs, cnduct webinars, and present at cnferences n 340B cmpliance and the audit prcess. HRSA has already prvided a great deal f educatin t cvered entities and hspitals supprt any additinal educatin t assist hspitals in implementing the systems needed t cmply with HRSA s standards. Hwever, we are cncerned that sme f the GAO's recmmendatins culd make prgram participatin significantly mre cumbersme fr hspitals withut imprving transparency r cmpliance. Incrprating an assessment f cvered entities' cmpliance with the prhibitin n duplicate discunts, as it relates t Medicaid managed care claims, int its audit prcess after guidance has been issued and ensure that identified vilatins are rectified by the entities; Issuing guidance n the length f time cvered entities must lk back fllwing an audit t identify the full scpe f nncmpliance identified during the audit; Requiring all cvered entities t specify their methdlgy fr identifying the full scpe f nncmpliance identified during the audit as part f their crrective actin plans, and incrprating reviews f the methdlgy int their audit prcess t ensure that entities are adequately assessing the full scpe f nncmpliance; Requiring all cvered entities t prvide evidence that their crrective actin plans have been successfully implemented prir t clsing audits, including dcumentatin f the results f the entities' assessments f the full scpe f nncmpliance identified during each audit; and Prviding mre specific guidance t cvered entities regarding cntract pharmacy versight, including the scpe and frequency f such versight. 340B Health Has Cncerns with this Discussin Draft.