Your 340B Report for Tuesday March 17, 2020

HRSA Doesn’t Plan to Change Its April 340B Registration Period—For Now

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With the COVID-19 outbreak continuing to unfold, HRSA says that while it doesn’t plan to modify next month’s 340B registration period at this time, stakeholders should keep an eye on the HRSA website. Source: Shutterstock

For Now, HRSA Doesn’t Plan to Change Its April 340B Registration Period

With health care providers bracing for COVID-19’s full force, the Health Resources and Services Administration (HRSA) at this time does not plan to modify the scheduled April 1-15 period for health care providers to register themselves, outpatient facilities, and contract pharmacies to participate in the 340B program, HRSA told 340B Report today.

HRSA adds, though, that “to the extent that this may change, we are encouraging all stakeholders to monitor our website at https://www.hrsa.gov/opa. However, if a covered entity has a specific circumstance related to COVID-19, the covered entity should contact HRSA directly and we will evaluate each circumstance on a case-by-case basis.”

During some past declared public health emergencies, HRSA has allowed eligible entities to immediately enroll in 340B rather having to wait for the next quarterly 15-day registration window. For example, due to earthquakes in December and January, eligible providers in Puerto Rico currently can enroll without delay. Health and Human Services Secretary Alex Azar declared the COVID-19 outbreak a public health emergency on Jan. 31.

In other COVID-19 related developments today, the Centers for Medicare & Medicaid Services announced that, for Medicare reimbursement purposes, telehealth services furnished to patients “are considered the same as in-person visits and are paid at the same rate as regular, in-person visits.” Also, the HHS Office of Inspector General gave providers and physicians flexibility to waive beneficiary cost-sharing for telehealth visits paid for by federal health care programs.

Does This Partially Explain Why HRSA Has Been Emphasizing Its Lack of Enforcement Power?

A forthcoming Federal Register notice from the U.S. Health and Human Services Department (HHS) might shed light on why the Health Resources and Services Administration (HRSA) spoke publicly as often as it did in January and February about its limited ability to enforce 340B program guidance.

The notice, posted for public inspection today and to be published tomorrow, announces that the White House Office of Management and Budget (OMB) extended HHS’s deadline, from Feb. 28 to Aug. 31, 2020, to establish “a new guidance portal and the rescission of any guidance documents that are not included in it.” HHS’s Feb. 27 memo to OMB seeking the extension said “standing up a new public facing guidance portal…is a challenge.” The memo notes that agencies within HHS have until May 1, 2020 to submit “past guidances for inclusion in the new portal.”

President Trump issued an executive order on Oct. 9, 2019 requiring all federal agencies to “establish or maintain on its website a single, searchable, indexed database that contains or links to all guidance documents in effect from such agency or component. The website shall note that guidance documents lack the force and effect of law, except as authorized by law or as incorporated into a contract.” Executive Order 13891 also requires agencies to “rescind those guidance documents that it determines should no longer be in effect,” and to promulgate regulations for issuing new guidance documents,” including “a requirement that each guidance document clearly state that it does not bind the public, except as authorized by law or as incorporated into a contract” and “procedures for the public to petition for withdrawal or modification of a particular guidance document, including a designation of the officials to which petitions should be directed.”

An Oct. 31, 2019 OMB memo implementing the executive order says the order’s “central principle” is “that guidance documents should only clarify existing obligations; they should not be a vehicle for implementing new, binding requirements on the public.” It says agencies can use guidance documents

to interpret existing law through an interpretive rule or to clarify how it intends to enforce a legal requirement through a policy statement. However, a guidance document should never be used to establish new positions that the agency treats as binding…. Nor should agencies use guidance documents—including those that describe themselves as non-binding—effectively to coerce private-party conduct, for instance by suggesting that a standard in a guidance document is the only acceptable means of complying with statutory requirements, or by threatening enforcement action against all parties that decline to follow the guidance.

Earlier this month, HRSA’s Office of Pharmacy Affairs (OPA) added a box to its homepage with the title 340B Program Regulations and links to three documents: the 340B ceiling price and manufacturer civil monetary policy final rule, the 340B ceiling price and manufacturer CMP final rule effective date change, and the delegation of authority to impose CMPs to the HHS Inspector General. We asked HRSA why the box was added. HRSA said that while the documents were already on the website, “they were reorganized in a manner that made the documents more available.”


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Judge Rules Mallinckrodt Owes About $650 Million in Unpaid Medicaid Rebates

Drug manufacturer Mallinckrodt is appealing a federal district court’s ruling that it owes roughly $650 million in Medicaid rebates on Acthar Gel from 2013 to the present. It’s unclear what impact, if any, the decision could have on whether 340B covered entities could be entitled to refunds for overpayments on the immune disease treatment.

Mallinckrodt announced the decision, which remains under seal, on March 16. As we previously reported, the U.S. Justice Department intervened in a whistleblower suit against Mallinckrodt alleging it illegally evaded paying additional Medicaid rebate amounts due when a drug’s average manufacturer price (AMP) rises faster than inflation. The same inflation penalty also can cause a drug’s 340B ceiling price to fall, sometimes to a floor of $0.01. DOJ asked the court to order Mallinckrodt to pay states and the federal government the difference between what it owed for Medicaid rebates and what it actually paid, plus damages. DOJ did not, however, seek financial relief for 340B entities that presumably paid more than they should have for Acthar.

Mallinckrodt says it will appeal the ruling.

Tweets of Note

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