Healthcare providers express cash flow concerns under new 340B rebate model

Editor's Note

Healthcare providers could experience significant cash flow and operational changes under a new voluntary pilot program that fundamentally alters how the nation's second-largest drug payment program operates, according to an August 11 article in Modern Healthcare.

As detailed in the article, The Health Resources and Services Administration announced the pilot program last month to test the idea of drugmakers offering rebates rather than discounts to safety-net providers participating in the 340B Drug Pricing Program. Under the current 340B system, qualifying providers pay 25% to 50% less for prescription medications.

The pilot will allow rebates for the 10 pharmaceuticals subject to the Medicare Drug Price Negotiation Program, including medicines that treat diabetes, rheumatoid arthritis and heart failure, the outlet reports. Comments are due September 8, drugmakers must apply by September 15, and participants will be announced October 1 for a pilot beginning January 1.

The potential transformation of 340b has providers fearing costly operational changes, revised budgeting processes and cash flow uncertainty, Modern Healthcare reports. However, the pharmaceutical industry, employers and others view the initiative as a way to fix a program that has grown beyond what they consider its original intent.

Organizations representing 340B providers are requesting more time from HRSA, asking the agency to leave comments open until September 15, push back the drugmaker application deadline to October 20, and delay approvals until November 3. The American Hospital Association, America's Essential Hospitals, the Association of American Medical Colleges, the Catholic Health Association of the U.S., the Children's Hospital Association, 340B Health and the American Society of Health System-Pharmacists wrote to HRSA Administrator Thomas Engels on Friday, stating that with the fundamental changes a rebate model will impose on all 340B stakeholders, it is impossible for the agency to meaningfully consider all feedback in just seven days.

The full report offers additional detail and testimony from a varied group of stakeholders.