New 340B Stewardship Principles

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New 340B Stewardship Principles

This summer’s Congressional 340B hearings drew attention to the need for covered entities to be able to speak to the use of their 340B savings in alignment with program intent. While the documentation and demonstrated use of savings is currently not required by statue for hospitals, many of the grantee covered entity types are already required to demonstrate that all resources generated through the 340B program are used to expand and support services within the scope of their grant. Many covered entities, including hospitals have developed “Use of Savings” documents highlighting the valuable services and programs supported by 340B savings and have shared them with their communities and congressional delegations. The sharing of the importance of the 340B program has gone a long way to build program support.

On September 18, 2018, the American Hospital Association (AHA) announced the release of new principles for hospitals designed to help ensure good stewardship of the 340B program. The AHA-led initiative is intended to strengthen the 340B program, increasing transparency and helping 340B hospitals better demonstrate the significant value of the program for vulnerable patients and communities.

According to Rick Pollack, president and CEO of the AHA,

“The 340B stewardship principles will help hospitals better tell their story of how this crucial program is delivering a variety of important benefits to patients and communities. In an era of skyrocketing drug prices, 340B has been critical in helping hospitals expand access to comprehensive health services, including lifesaving prescription drugs.”

The following principles released are to serve as the foundation for every 340B hospital’s good stewardship of the program:

  • Communicate the Value of the 340B Program: The hospital commits to preparing and publishing a narrative, on an annual basis, that describes how it uses 340B savings to benefit the community. The narrative would address those programs and services funded, in whole or in part, by 340B savings, including those services that support community access to care that the hospital could not continue without 340B savings. Examples of such programs and services will be particular for each hospital and could include programs that expand access to drugs for vulnerable populations, as well as a wide range of other services, such as preventive care, emergency services, cancer treatment, vaccinations, home-based care, and mental and behavioral health services.
  • Disclose Hospital’s 340B Estimated Savings: The hospital commits to publicly disclosing, on an annual basis, its 340B estimated savings calculated using a standardized method. That method would calculate 340B savings by comparing the 340B acquisition price to group purchasing organization (GPO) pricing. If GPO pricing is not available for a 340B drug, the 340B acquisition price for a drug would be compared to another acceptable pricing source. To provide context for the estimated savings, hospitals could compare their 340B estimated savings to the hospitals’ total drug expenditures, as well as provide examples of their top 340B drugs.
  • Continue Rigorous Internal Oversight. The hospital commits to continuing to conduct internal reviews to ensure that the hospital’s 340B program meets HRSA program rules and guidance. Included in this effort is a commitment to regular and periodic training for their interdisciplinary 340B teams that encompasses C-suite executives, pharmacy, legal, and financial assistance, as well as community outreach and government relations staff if applicable.

The good stewardship principles have been endorsed by America’s Essential Hospitals, the Association of American Medical Colleges, the Catholic Health Association of the United States, the Children’s Hospital Association and 340B Health.

This is not the first time 340B stewardship principles have been released. In 2012, 340B Health released its own principles of program stewardship and revised them in 2016. 340B Health proposed that good hospital stewards of 340B:

  • Invest in maintaining, improving, or expanding access to pharmaceuticals and/or other patient care services that benefit patients, in particular the low-income, uninsured, and underinsured populations and document how those savings are used
  • Maintain meaningful policies under which qualifying indigent patients receive medically necessary healthcare services, medications, and pharmacy support services for free or at reduced cost
  • Use contract pharmacies to allow qualifying indigent patients to access pharmaceuticals at free or at a reduced cost at their contract pharmacies or through other arrangements
  • Provide safe and cost-effective care that results in improved health outcomes

In 2015, 340B Health launched their 340B Impact Profile initiative. In the profiles, hospitals describe their safety-net role and offer data that best represents 340B’s impact on their institution and patients. Each profile is suggested to include:

  • The hospital’s approximate annual 340B savings
  • Specific programs and/or services 340B savings help support
  • Services or programs provided to low-income and/or rural patients that would otherwise be unavailable in the hospital’s service area
  • Programs and/or services a hospital would have to cut back or eliminate if it were to lose 340B savings
  • Disproportionate share hospital adjustment percentage
  • Distance between the hospital and the next closest institution that provides similar services

340B Health member hospitals that have already voluntarily completed their 340B Health Impact Profile are qualified to be among the first deemed to meet AHA’s new benchmarks. For more information on 340B Health Impact Profile Guidebook.

The Apexus Prime Vendor program has also released a tool intended to demonstrate program impact, the 340B Savings and Community Benefit Template. They also offer a 340B Oversight Best Practices tool which includes methods for calculating program savings for physician/clinic administered drugs and contract pharmacy prescriptions.

Although not required by law, it is best practice for covered entities to follow the stewardship practices proposed but both AHA and 340B Health. Maintaining a Use of Savings document, even if it is only shared internally with your organization, helps others better understand the value of the 340B program and may help support the argument for adding program oversight resources in the form of FTEs if needed.

About Author

Felicity Homsted, PharmD, MBA

Lead pharmacist auditor, provides support for onsite audits. Felicity served as Chief Pharmacy Officer at a Federally Qualified Health Center from 2012-2018, responsible for four retail pharmacies, integrated clinical pharmacy services, three pharmacy residency programs and 340B program management. Felicity was also Chief Pharmacy Officer for Community Care Partnership of Maine, an accountable care organization comprised of 11 different health systems, where she supported pharmacy operations and 340B compliance for all member organizations. Felicity represented her entity as a HRSA 340B leading practice peer to peer site during 2013 to 2015. Felicity served as a subject matter expert for the Apexus 340B Prime Vendor program, speaking as faculty at 340B University on contract and in-house pharmacy operations, authoring the contract pharmacy modules for the 340B ACE Operations Certificate. She has presented on 340B program operations and compliance at 340B Coalition, National Association of Community Health Centers, and American Pharmacy Association meetings.

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