New Legislation in Support of 340B Program

On June 12, Congresswoman Doris Matsui (D-CA) introduced the Stretching Entity Resources for Vulnerable (SERV) Communities Act, legislation that clarifies the intent of the 340B Program, enhances program integrity, and protects and expands the program to meet the needs of the opioid crisis.

“Hospitals and clinics doing life-saving work rely on the 340B Program to help them provide inclusive and affordable care in their communities,” said Congresswoman Matsui. “Unfortunately, the program is being incorrectly used as a scapegoat for high drug prices by the Trump Administration. This legislation makes clear the importance of preserving the program so safety net providers can continue to serve low-income and vulnerable patients, while expanding it to help address the opioid crisis.”

Several hospital systems and community health clinics in California and across the country have expressed support for Matsui’s legislation including: 340B Health, America’s Essential Hospitals, American Hospital Association, Association of American Medical Colleges, California Hospital Association, California Primary Care Association, CommuniCare Health Centers, Dignity Health, Ryan White Clinics for 340B Access (RWC-340B), The Catholic Health Association of the United States, The Children’s Hospital Association, University of California Health (UC Health), and Vizient, Inc.

Key provisions of the SERV Communities Act include:

  • Codifies the purpose of the 340B program as Congress intended: “to stretch scarce resources as far as possible, reaching more eligible patients and providing more comprehensive services” and clarifies that the discounts are to be used in a manner that best suits the needs of the community
  • Protects providers against manufacturer overcharging by requiring the federal government to enforce a 2010 law imposing civil monetary penalties on manufacturers that “knowingly and intentionally” overcharge 340B providers
  • Codifies the definition of “patient” as defined in the 1996 guidance published by the Health Resources and Services Administration (HRSA)
  • Allows Substance Abuse and Mental Health Services Administration (SAMHSA) grantees to participate in the 340B program
  • Requires HRSA to audit drug manufacturers in proportion to the share of providers it audits and make sure manufacturers are calculating 340B prices correctly.
  • Reverses the nearly 30 percent cut in Medicare Part B reimbursement to many 340B hospitals that took effect Jan. 1, 2018.

A section-by-section summary of the legislation can be found here. A fact sheet on the legislation can be found here. The legislative text can be found here.

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