Federal

Drug Pricing Transparency and Accountability Act

Source: Congress.gov · 3,985 words in original text

What This Bill Does

This bill increases reporting and transparency requirements for the 340B Drug Pricing Program. The 340B program is a federal program that allows certain hospitals and other covered entities to purchase drugs at discounted prices. The bill creates a temporary freeze on new hospitals joining the program and requires hospitals to report detailed information about their drug purchases and revenues to the federal government. ##

Who It Affects

- Private hospitals not owned by government entities that participate in the 340B program - Off-campus outpatient facilities (called "child sites") associated with participating hospitals - The Department of Health and Human Services (federal agency that oversees the program) - State Medicaid agencies - Medicaid managed care organizations - Medicare Advantage plans - Pharmacy Benefit Plan sponsors (organizations that manage prescription drug benefits) - Drug manufacturers - Congress - The public (who will have access to hospital pricing information) ##

Key Provisions

- Hospitals that are not government-owned cannot register as new participants in the 340B program for two years beginning on the date this law passes. Hospitals already in the program before this date can continue participating. Child sites (off-campus facilities) registered before December 31, 2020 can continue operating in the program. (Sec. 2) - The federal government must write detailed rules during the freeze period that explain which hospitals are eligible to participate, what standards child sites must meet, and what information hospitals must report publicly. These rules must be finished before the two-year freeze ends, or the freeze continues until rules are finalized. (Sec. 2) - Hospitals participating in the 340B program must submit claims to insurance companies using a special code ("340B modifier" or code "JG") that identifies drugs purchased under this program, beginning six months after this law passes. (Sec. 3) - Hospitals must report annually to the federal government about their drug revenues, acquisition costs, fees paid to pharmacies, patient types served by insurance status, charity care costs, and all vendors they hire to help manage the program. The federal government will publish this information publicly on its website, unless the information is proprietary or confidential. (Sec. 2) - State Medicaid agencies must allow drug manufacturers to see Medicaid claims (with the 340B modifier) to verify whether manufacturers owe rebates (price reductions), and must publish annual reports on how much Medicaid uses 340B drugs. (Sec. 3) ##

What Changes

If this bill becomes law, hospitals participating in the 340B program will be required to publicly disclose detailed financial information about their drug purchases and revenues for the first time. Most importantly, hospitals will have to reveal how much profit they make from buying discounted drugs and reselling them to patients. New private hospitals cannot join the program for two years. Medicaid and Medicare will require special identification codes on all claims for 340B drugs. Two independent government investigations will examine whether hospitals are providing adequate charity care and whether the program is working as intended. ##

Important Definitions

- **340B Drug Pricing Program**: A federal program allowing certain hospitals and other covered entities to purchase prescription drugs at discounted prices from manufacturers (Sec. 1 and throughout) - **Covered entity**: A hospital or other organization eligible to participate in the 340B program (Sec. 2) - **Child site**: An off-campus outpatient facility owned by and associated with a hospital that participates in the 340B program (Sec. 2) - **340B modifier**: A special code (either "JG" or "TB" depending on hospital type) that identifies claims for drugs purchased under the 340B program (Sec. 3) - **Subsection (d) hospital**: Not specified in bill text ##

Effective Date

The modifier requirement takes effect six months after this law is enacted and applies to claims submitted on or after that date. (Sec. 3) The hospital freeze begins on the date this law is enacted and lasts for two years. (Sec. 2)

I 118TH CONGRESS 1ST SESSION H. R. 198 To increase reporting requirements and transparency requirements in the 340B Drug Pricing Program, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JANUARY 9, 2023 Mr. ROSENDALE introduced the following bill; which was referred to the Com- mittee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To increase reporting requirements and transparency require- ments in the 340B Drug Pricing Program, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Drug Pricing Trans- 4 parency and Accountability Act’’. 5 VerDate Sep 11 2014 00:06 Jan 20, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H198.IH H198 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 198 IH SEC. 2. MORATORIUM ON REGISTRATION OF NEW NON- 1 RURAL SECTION 340B HOSPITALS. 2 Section 340B(a) of the Public Health Service Act (42 3 U.S.C. 256b(a)) is amended— 4 (1) in paragraph (4)(L), by striking ‘‘A sub- 5 section (d) hospital’’ and inserting ‘‘Subject to para- 6 graph (11), a subsection (d) hospital’’; and 7 (2) by adding at the end the following: 8 ‘‘(11) MORATORIUM ON REGISTRATION OF CER- 9 TAIN HOSPITALS.—During the 2-year period begin- 10 ning on the date of the enactment of this para- 11 graph— 12 ‘‘(A) an entity described in paragraph 13 (4)(L) shall not be considered a covered entity 14 under this section unless such entity was a cov- 15 ered entity on such date (as evidenced by the 16 entity having been identified as a covered entity 17 as of such date under the covered entity identi- 18 fication system established under subsection 19 (d)(2)(B)(iv)); and 20 ‘‘(B) no site shall be added to the covered 21 entity identification system established under 22 subsection (d)(2)(B)(iv) or be permitted to 23 begin participating in the drug discount pro- 24 gram under this section, as a ‘child site’ or oth- 25 erwise, on the basis of association with a cov- 26 VerDate Sep 11 2014 00:06 Jan 20, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H198.IH H198 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 198 IH ered entity described in paragraph (4)(L) un- 1 less such site was identified as a child site as 2 of December 31, 2020, under the system estab- 3 lished under subsection (d)(2)(B)(iv). 4 ‘‘(12) REGULATIONS TO BE ISSUED DURING 5 THE MORATORIUM PERIOD TO IMPLEMENT STATU- 6 TORY REQUIREMENTS CLARIFYING HOSPITAL ELIGI- 7 BILITY CRITERIA AND HOSPITAL CHILD SITE STAND- 8 ARDS AND ENHANCING HOSPITAL TRANSPARENCY.— 9 ‘‘(A) ISSUANCE OF REGULATIONS.— 10 ‘‘(i) IN GENERAL.—During the mora- 11 torium period under paragraph (11), the 12 Secretary shall promulgate regulations 13 through notice and comment rulemaking to 14 implement the standards and requirements 15 described in subparagraph (B). 16 ‘‘(ii) DEADLINE.—Such final regula- 17 tions shall be promulgated and take ef- 18 fect— 19 ‘‘(I) before the end date of the 20 moratorium described in paragraph 21 (11); or 22 ‘‘(II) in the event that any of 23 such regulations have not taken effect 24 by such end date, the moratorium 25 VerDate Sep 11 2014 00:06 Jan 20, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H198.IH H198 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 198 IH under subparagraph (11) shall be ex- 1 tended until such regulations are final 2 and effective. 3 ‘‘(iii) LIMITATION.—The authority to 4 promulgate regulations under this para- 5 graph is limited to setting forth the details 6 necessary and appropriate to carry out the 7 requirements of subparagraph (B) effi- 8 ciently, effectively, and in conformity with 9 such subparagraph. 10 ‘‘(B) STANDARDS AND REQUIREMENTS.— 11 ‘‘(i) HOSPITAL CHILD SITE STAND- 12 ARDS.— 13 ‘‘(I) IN GENERAL.—Hospitals de- 14 scribed in subparagraphs (L) and (M) 15 of paragraph (4) may register off- 16 campus outpatient facilities associated 17 with the hospital (also known as ‘child 18 sites’) to participate in the drug dis- 19 count program under this section (be- 20 ginning after the moratorium under 21 paragraph (11) ends), if— 22 ‘‘(aa) the site is listed on the 23 hospital’s most recently filed 24 Medicare cost report on a line 25 VerDate Sep 11 2014 00:06 Jan 20, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H198.IH H198 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 198 IH that is reimbursable under the 1 Medicare program (or, if the hos- 2 pital is a children’s hospital that 3 does not file a Medicare cost re- 4 port, the hospital submits to the 5 Secretary a signed statement cer- 6 tifying that the facility would be 7 correctly included on a reimburs- 8 able line of a Medicare cost re- 9 port if the hospital filed a cost 10 report); 11 ‘‘(bb) such cost report dem- 12 onstrates that the services pro- 13 vided at the facility have associ- 14 ated costs and charges for hos- 15 pital outpatient department serv- 16 ices under title XVIII of the So- 17 cial Security Act (or, if the hos- 18 pital is a children’s hospital that 19 does not file a Medicare cost re- 20 port, the hospital submits to the 21 Secretary a signed statement cer- 22 tifying that the services provided 23 at the facility include or consist 24 solely of outpatient services); 25 VerDate Sep 11 2014 00:06 Jan 20, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H198.IH H198 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 198 IH ‘‘(cc) the facility is wholly 1 owned by the covered entity; 2 ‘‘(dd) the Secretary has 3 made a determination, under the 4 process described in section 5 413.65(b) of title 42, Code of 6 Federal Regulations (or any suc- 7 cessor regulations), that the facil- 8 ity meets the Medicare provider- 9 based standards under section 10 413.65 of title 42, Code of Fed- 11 eral Regulations (or any suc- 12 cessor regulations); 13 ‘‘(ee) the facility provides a 14 full range of outpatient services, 15 in addition to drugs; and 16 ‘‘(ff) the facility adheres to 17 the charity care policy and any 18 sliding fee scale policy of the par- 19 ent hospital. 20 ‘‘(II) DE-REGISTRATION.—If at 21 any time following registration one or 22 more of the standards listed above are 23 no longer satisfied, a registered hos- 24 pital shall immediately notify the Sec- 25 VerDate Sep 11 2014 00:06 Jan 20, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H198.IH H198 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 198 IH retary, de-register the facility, and 1 keep the facility from making any 2 purchases under the drug discount 3 program under this section or rep- 4 resenting to third parties that it may 5 purchase under such program. 6 ‘‘(ii) HOSPITAL ELIGIBILITY STAND- 7 ARDS FOR HOSPITALS NOT OWNED OR OP- 8 ERATED BY A UNIT OF STATE OR LOCAL 9 GOVERNMENT.—For purposes of subpara- 10 graph (L)(i) of paragraph (4): 11 ‘‘(I) A private hospital has been 12 formally granted governmental powers 13 by a unit of State or local government 14 if the Secretary receives a certification 15 from a State or local governmental 16 entity that such governmental entity 17 has formally delegated, through State 18 or local statute or regulation or, if 19 permitted by applicable State or local 20 law, through a contract with a State 21 or local government, to the hospital 22 such a power, described in detail in 23 the certification. 24 VerDate Sep 11 2014 00:06 Jan 20, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H198.IH H198 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 198 IH ‘‘(II) A private hospital has a 1 contract with a State or local govern- 2 ment to provide health care services to 3 low-income individuals who are not 4 entitled to benefits under Medicare or 5 Medicaid if— 6 ‘‘(aa) the hospital submits a 7 copy of the contract to the Sec- 8 retary for review; 9 ‘‘(bb) the Secretary deter- 10 mines that the contract creates 11 an enforceable obligation for the 12 hospital to provide direct medical 13 care to low-income individuals in- 14 eligible for Medicare and Med- 15 icaid in an amount that rep- 16 resents at least 15 percent of the 17 hospital’s total costs for all items 18 and services furnished at such 19 hospital; and 20 ‘‘(cc) the contract is avail- 21 able to the public as part of the 22 information describing the hos- 23 pital in the covered entity identi- 24 VerDate Sep 11 2014 00:06 Jan 20, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H198.IH H198 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 198 IH fication system established under 1 subsection (d)(2)(B)(iv). 2 ‘‘(III) If at any time a hospital 3 not owned or operated by a unit of 4 State or local government no longer 5 meets one or more requirements 6 under subclause (I) or (II), the hos- 7 pital shall immediately notify the Sec- 8 retary, dis-enroll from the drug dis- 9 count program under this section, and 10 stop making purchases under such 11 program and representing to third 12 parties that it may purchase under 13 such program. 14 ‘‘(iii) HOSPITAL TRANSPARENCY RE- 15 QUIREMENTS.— 16 ‘‘(I) HOSPITAL REQUIREMENTS 17 TO IDENTIFY SECTION 340B DRUGS.— 18 In the case of covered entity hospitals 19 described in subparagraph (L) of 20 paragraph (4): 21 ‘‘(aa) Claims for covered 22 outpatient drugs purchased 23 under the drug discount program 24 under this section shall be sub- 25 VerDate Sep 11 2014 00:06 Jan 20, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H198.IH H198 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 198 IH mitted to public and private 1 payors using the 340B modifier 2 established by the Secretary 3 under the prospective payment 4 system for hospital outpatient de- 5 partment services, in conform- 6 ance with paragraph (22) of sec- 7 tion 1833(t) of the Social Secu- 8 rity Act, subsection (h) of 9 1847A, subparagraph (F) of sec- 10 tion 1927(a)(5), and paragraph 11 (5) of section 1857(g), that is 12 ‘JG’. 13 ‘‘(bb) Such hospitals shall 14 report to the Secretary on an an- 15 nual basis, in a form and manner 16 specified by the Secretary— 17 ‘‘(AA) the hospital’s ag- 18 gregate annual revenue from 19 drugs purchased under the 20 program under this section, 21 minus its aggregate annual 22 acquisition costs for such 23 drugs, broken out by hos- 24 pital and by each child site; 25 VerDate Sep 11 2014 00:06 Jan 20, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H198.IH H198 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 198 IH ‘‘(BB) any dispensing 1 fees paid by the hospital or 2 child site to contract phar- 3 macies for such drugs; 4 ‘‘(CC) the patient mix, 5 broken down by expected 6 payment source (including 7 at least the Medicare pro- 8 gram under title XVIII of 9 the Social Security Act, a 10 State plan under the Med- 11 icaid program under title 12 XIX of such Act, private in- 13 surance, and uninsured indi- 14 viduals), for each such hos- 15 pital, and each child site of 16 the hospital listed in the 17 covered entity information 18 system established under 19 subsection (d)(2)(B)(iv), and 20 the costs incurred at each 21 such hospital and site for 22 charity care (as described in 23 line 23 of Worksheet S– 24 10—Hospital Uncompen- 25 VerDate Sep 11 2014 00:06 Jan 20, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H198.IH H198 kjohnson on DSK79L0C42PROD with BILLS 12 •HR 198 IH sated and Indigent Care 1 Data to the Medicare cost 2 report or as reported in any 3 successor form); 4 ‘‘(DD) the percent of 5 total revenues (net of any 6 discounts) at each site de- 7 rived from infusion or injec- 8 tion of physician-adminis- 9 tered drugs, including any 10 associated items or services 11 furnished incident-to the ad- 12 ministration of such drugs; 13 and 14 ‘‘(EE) with respect to 15 such hospital and each child 16 site of the hospital, the 17 names of all third-party ven- 18 dors or other similar entities 19 (including split fee vendors 20 and contract pharmacies) 21 that the covered entity con- 22 tracts with to provide serv- 23 ices associated with the pro- 24 gram under this section 25 VerDate Sep 11 2014 00:06 Jan 20, 2023 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H198.IH H198 kjohnson on DSK79L0C42PROD with BILLS 13 •HR 198 IH (broken down by covered en- 1 tity and by each child site). 2 ‘‘(II) PUBLIC AVAILABILITY.— 3 The Secretary shall make the infor- 4 mation reported to the Secretary 5 under subclause (I)(bb) available to 6 the public (with redactions of any in- 7 formation the Secretary determines to 8 be proprietary or confidential) in an 9 annual compilation of the reported in- 10 formation available on the internet 11 website of the Department of Health 12 and Human Services, and as part of 13 the information describing the hos- 14 pital and the relevant child site in the 15 covered entity identification system 16 established under subsection 17 (d)(2)(B)(iv).’’. 18 SEC. 3. 340B CLAIMS MODIFIER. 19 (a) MEDICAID.—Section 1927(a)(5) of the Social Se- 20 curity Act (42 U.S.C. 1396r–8(a)(5)) is amended by add- 21 ing at the end the following: 22 ‘‘(F) 340B CLAIMS MODIFIER.— 23 ‘‘(i) IN GENERAL.—All claims sub- 24 mitted to a Medicaid fee-for-service pro- 25 VerDate Sep 11 2014 00:06 Jan 20, 2023 Jkt 039200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H198.IH H198 kjohnson on DSK79L0C42PROD with BILLS 14 •HR 198 IH gram or a medicaid managed care organi- 1 zation (as defined in section 2 1903(m)(1)(A)) for reimbursement of a 3 unit of a covered outpatient drug subject 4 to an agreement under section 340B of the 5 Public Health Service Act shall include the 6 340B modifier established by the Secretary 7 under the prospective payment system for 8 hospital outpatient department services 9 under section 1833(t) that is ‘JG’ or the 10 Submission Clarification Code of ‘20’ de- 11 veloped by the National Council for Pre- 12 scription Drug Programs (NCPDP). 13 ‘‘(ii) DATA SHARING.—Each single 14 State agency shall make available to a 15 manufacturer of a covered outpatient drug 16 any fee-for-service or managed care claim 17 for reimbursement for a unit of such drug 18 for the purpose of verifying the propriety 19 of any claim for a rebate payment under 20 an agreement under subsection (b) with re- 21 spect to such drug. At the manufacturer’s 22 request, in lieu of making such a claim 23 available to the manufacturer, the single 24 State agency may instead provide a list of 25 VerDate Sep 11 2014 00:06 Jan 20, 202 [Text truncated for display. Full text available on Congress.gov.]

Important: This plain English summary was generated by AI and is provided for informational purposes only. It is not legal advice. Always consult the official bill text on Congress.gov or a qualified attorney for legal matters.