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Stewart and Matsui Introduce Bipartisan Legislation to Protect 340B Hospitals During the Declared Health Emergency

Today, Congressman Chris Stewart (R-UT) and Congresswoman Doris Matsui (D-CA) introduced a bill to provide temporary waivers for certain 340B program eligibility requirements due to the COVID-19 health emergency. This bill will protect 340B hospitals, including Utah’s Beaver Valley Hospital, University of Utah Hospital, Garfield Memorial Hospital, Primary Children’s, and others, from losing their covered entity status and allow for greater flexibility in sourcing drugs during the pandemic.

This legislation follows a letter that Reps. Stewart and Matsui lead to House leadership in May, signed by 121 colleagues, that called for similar provisions to support the 340B drug discount program.

“The United States asked for all our healthcare providers to step up to help defeat this virus,” said Rep. Stewart. “These hospitals have done exactly that. They’ve prioritized the health and safety of our nation over the viability of their facilities. This bill ensures that they can continue to fight the virus without jeopardizing their financial future.”

“America’s hospitals continue to be on the front lines of the pandemic, which has necessitated operational changes to care for the influx of COVID-19 patients. For our safety net providers, they must face this challenge while still functioning as the essential support system for the medically vulnerable and underserved,” said Congresswoman Matsui. “The 340B program has long been a lifeline for providing life-saving drugs and care to low-income patients – helping us provide a more equitable health care delivery system. This bill will ensure that these essential providers will be able to continue to serve as our nation’s health safety net and weather the uncertainty of this public health crisis.”

“We are enormously grateful to Congresswoman Matsui and Congressman Stewart for their continued championing of the 340B drug pricing program,” said Maureen Testoni, 340B Health President and CEO. “This bipartisan legislation will ensure no safety-net hospital will lose its access to 340B drug prices due to the changes necessitated by the COVID-19 pandemic. 340B hospitals are on the front lines of our public health response, and access to 340B discounts is one of their few reliable resources. Losing 340B eligibility would be disastrous for safety-net hospitals, as they are facing significant challenges due to COVID-19. We appreciate Congresswoman Matsui and Congressman Stewart for their swift action to prevent this from happening.”

Under the 340B program, drug manufacturers agree to provide outpatient drugs at a discount to safety-net providers that serve our most vulnerable Americans, including low-income Medicare, Medicaid and Supplemental Security Insurance patients. These providers include Medicare disproportionate share (“DSH”) hospitals, children’s hospitals, free-standing cancer hospitals, and rural hospitals.

This legislation:

Temporarily Waives the Minimum Disproportionate Share Adjustment Requirement

As the surge of COVID-19 patients continues, hospitals have had to reserve inpatient space for the critically ill and shift non-COVID-19 care to outpatient settings. While these operational changes are essential to build capacity for crisis response, these changes have also reduced the number of low-income Medicare and Medicaid patients being served by covered entities during this time. 

This bill ensures that reducing DSH percentage based on emergency operating measures during the pandemic would not jeopardize a covered entities’ eligibility for the 340B program. Waiving the DSH adjustment percentage requirement would be in effect for any cost reporting period during which the public health emergency occurred.

Temporarily Waives the Group Purchasing Organization (GPO) Prohibition

Under normal circumstances, 340B eligibility requirements prohibit certain hospitals from using a GPO to purchase covered outpatient drugs. Given drug shortages and distribution challenges brought on by the pandemic, the GPO prohibition is impacting hospitals’ ability to access generic medications they need for COVID-19 patients. This bill temporarily waives the GPO prohibition for the duration of the public health emergency, which will reduce cost and increase access to product and provide relief to 340B hospitals facing enormous stress at this time.

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