FOR IMMEDIATE RELEASE                19 March 2018

The American Association of Healthcare Administrative Management (AAHAM) Urges Senate to Continue Essential 340B Drug Program by Passing H.R. 4392

Fairfax, VA - Friday, March 16, the United States Senate Health, Education, Labor & Pension Committee held a hearing entitled Perspectives on the 340B Drug Pricing Program.  The 340B drug program has come under scrutiny in recent months by some, how hospitals participating in this program are using proceeds from these prescription drug savings.

The 340B Drug Pricing Program is essential to helping safety-net providers stretch limited resources to better serve their patients and communities. For more than 20 years, the 340B program has provided financial help to safety-net hospitals to manage rising prescription drug costs. Section 340B of the Public Health Service Act requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to health care organizations that care for many uninsured and low-income patients. These organizations include community health centers, children’s hospitals, hemophilia treatment centers, critical access hospitals (CAHs), sole community hospitals, rural referral centers, and public and nonprofit disproportionate share hospitals, that serve low-income and indigent populations.

“I would like to thank Chairman Alexander and Ranking Member Murray for holding today’s hearing.  The 340B program has come under scrutiny recently and today’s hearing was an opportunity to share with members of both sides of the aisle the importance of this program, the patients it helps, and the savings this program provides patients, who without these savings would not be able to afford these life-saving drugs” said John Currier, CRCE-I, President of AAHAM. 

AAHAM supports program integrity efforts to ensure that the 340B program remains available to safety-net providers. Hospitals that participate in the 340B program are subject to oversight by HRSA’s Office of Pharmacy Affairs, and hospitals in the 340B program must meet numerous program integrity requirements. These include yearly recertification; audits from both HRSA and drug manufacturers; and maintaining auditable inventories of all 340B and non-340B prescription drugs. In recent years, HRSA implemented additional program integrity efforts, and the AHA encourages HRSA to develop a process to help financially distressed providers meet the new program integrity provisions.

“Today’s hearing pointed out some potential problems with the 340B program.  If there are problems or people aren’t using these benefits from this program as it was originally intended, then AAHAM is committed to working with both sides to fix any problems that may exist.  If greater transparency is needed, we welcome the collaboration in working with Congress on a solution” added Currier. 

AAHAM urges expansion of the 340B program to the inpatient setting, as it would be a “win-win” for taxpayers and hospitals. It would generate savings for the Medicaid program by requiring hospitals to share with Medicaid a percentage of their savings on inpatient drugs administered to Medicaid patients. It also would reduce Medicare costs, as CAHs are paid 101% of their inpatient and outpatient costs by Medicare, and the 340B pricing mechanism would lower CAH’s drug costs. According to the Congressional Budget Office, expanding the program to cover inpatient services would save the federal government upwards of $1.2 billion over 10 years.

“The solution to today’s hearing is not eliminating or significantly scaling back the 340B program, but just the opposite.  The spending on drugs for the prescriptions drug program accounts for just over 1.3% of the overall prescription drug spending in this country.  This 1.3% are life-saving drugs many of our patients could not afford without this program.  This is why we urge Congress to pass H.R. 4392, which repeals Medicare’s Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs final regulation relating to changes in the payment amount for certain drugs and biologicals purchased under the 340B drug discount program” concluded Currier.

ABOUT AAHAM
The American Association of Healthcare Administrative Management (AAHAM) is a national professional association of thirty-one chapters and over 3200 healthcare patient financial services professionals from hospitals, clinics, billing offices, allied vendors, physicians and multi physician groups.   AAHAM members direct the activities of the thousands of people who are employed in the healthcare industry. 

AAHAM is the preeminent professional organization for revenue cycle professionals and is known for its prestigious certification and educational programs; professional development of its members is one of the primary goals of the association. AAHAM is also recognized for its quarterly journal, The Journal of Healthcare Administrative Management and its Annual National Institute, held each fall.  AAHAM actively represents the interests of healthcare administrative management professionals through a comprehensive program of legislative and regulatory monitoring and its participation in industry groups. AAHAM is a major force in shaping the future of healthcare administrative management.