Omnibus Guidelines expected to bring changes to the 340B program

Ned MilenkovichThe 340B Drug Pricing Program requires drug manufacturers to provide outpatient drugs to eligible healthcare organizations and covered entities at reduced prices. The intent of the program is to “stretch scarce federal resources” by easing costs for providers who deliver care to enrollees in government programs.

Program eligibility has been expanded several times since the law’s inception in 1992. Covered entities must identify as nonprofit healthcare organizations and have certain federal designations or receive funding from specific federal programs. Currently, covered entities include federally qualified health centers, Ryan White HIV/AIDS Program grantees, and certain types of hospitals and specialized clinics.

The program also has established some criteria for individuals to receive status as “Qualified Patients.” Currently, Qualified Patients must establish a relationship with a 340B covered entity. The relationship must include retention of patient documents by the covered entity, provision of healthcare by professionals employed by the covered entity, and designation of care provided as a type for which the entity receives grant funding or status as a federally qualified health center.

As the program has continued to expand, most significantly with the adoption of the Affordable Care Act in 2010, the ambiguities at the heart of the program have grown to create more significant problems. Factors that have contributed to the program’s expansion “beyond its bounds” include the broad definition of Qualified Patients and scattered hospital eligibility criteria. The 2015 guidelines are expected to clarify many of the current ambiguities.

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340B Omnibus Guidelines

The Office of Management and Budget has begun its 90-day review of the 340B Program Omnibus Guidelines issued by the Health Resources and Services Administration (HRSA). These guidelines are expected to address many of the issues included in last year’s 340B “mega-reg.”

The 2014 proposed guidance was withdrawn after a court decision pertaining to an unrelated 340B issue called into question HRSA’s authority to create regulations on certain topics included in the 2014 guidance document. The federal case held that HRSA has regulatory authority only over the 340B Program: ceiling prices, dispute resolution processes, and manufacturer monetary penalties.

After the federal court’s ruling, HRSA changed strategies, shifting from proposed regulations to issuing guidance in the form of guidelines. This allowed HRSA to extend the scope of the guidance document beyond the limited topics identified by the court.

Key policy issues

The Omnibus Guidelines are expected to clarify existing regulations and update eligibility criteria. More specifically, the guidance is slated to include the definition of an eligible patient, compliance requirements for contract pharmacies, and eligibility criteria for hospitals and off-site outpatient facilities.

The 340B Winter Coalition also shed light on what may be included in the 2015 guidelines. Cmdr. Krista Pedley, the director of HRSA’s Office of Pharmacy Affairs, stated that the guidance may also include clarification on topics such as annual recertification, Medicaid fee-for-service and duplicate managed-care discounts, manufacturer refunds, and credits to covered entities.

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Review and comment

After OMB completes its 90-day review, the Omnibus Guidelines will be published in the Federal Register and open for public comment. During this 60-day comment period, stakeholders are encouraged to review the guidelines and provide feedback before the guidelines are finalized.