AHA wants Express Scripts to rescind 340B claims reporting policy

Photo: Jeff Lagasse/Healthcare Finance News

The American Hospital Association has sent a letter to Express Scripts asking the pharmacy benefit manager to rescind a policy requiring contract pharmacies to apply a unique code for claims under the 340B drug discount program.

In a FAQ for providers, Express Scripts said this was not a new requirement, having requested 340B reporting from network pharmacies for several years. 

"In August 2020, notice was provided to inform pharmacies the Express Scripts Provider Manual was updated to reflect this requirement as mandatory," the company said in the FAQ. "In January 2021, Express Scripts updated the requirement and gave pharmacies notice of an additional method for 340B reporting starting March 1. A targeted reminder of the requirement was sent to pharmacies the week of February 22."

The change, said Express Scripts, was made in the spirit of "greater transparency" and was not intended to lead a change in reimbursement rates, network participation or a pharmacy's ability to serve as a contract pharmacy for 340B covered entities.

In its letter, the AHA called this explanation "terse and inadequate," and claimed the action was an overreach for a pharmacy benefit manager that lacks a defined legislative or regulatory role in the 340B drug program.

"Given the existing robust federal oversight of the 340B program, it raises significant questions about Express Scripts' true motivations," the organization wrote.

The AHA then claimed the policy would add burden and cost to the healthcare system at an inopportune time, referencing the ongoing COVID-19 pandemic.

WHAT'S THE IMPACT?

The hospital group maintained that compliance with the policy isn't as simple as adding the "N1" transaction code to a claim. Instead, it will require significant investments in areas such as staffing and information systems upgrades, made all the more challenging by the pandemic.

The AHA referenced guidance from the National Council for Prescription Drug Programs saying that "unless all trading partners in the sequence are able to support this incremental process to pass the information to the ultimate destination, the 340B-N1 is not an effective solution for the business need."

At the core of the AHA's argument that Express Scripts overstepped its bounds is 340B contract pharmacy guidance, which does not identify any role for a PBM – meaning Express Scripts has no official role in the 340B billing or oversight process.

Moreover, the group cited an already-existing oversight structure through which the federal Health Resources and Services Administration conducts audits of 340B entities, and posts the findings on a public website for the purpose of transparency.

"The 340B program was established nearly 30 years ago to allow hospitals and other covered entities access to drug discounts to stretch the funding 340B providers have available to meet the needs of their patients in vulnerable communities," the AHA wrote. "The actions of Express Scripts serve only to undermine this purpose and contravene Congress's intent in establishing the 340B program."

Express Scripts told providers that if they identify a claim as 340B during the claim's initial submission, it does not have to resubmit as an N1 transaction. The reporting requirement applies to the extent not prohibited by law, the PBM said.

THE LARGER TREND

The 340B Program is a discount drug pricing program for large drug manufacturers to sell outpatient drugs at a discount to certain hospitals, community centers and other federally funded clinics serving low-income patients. Manufacturers are required to offer the discount as a condition of participating in Medicaid and Medicare Part B.

In 2017 alone, 340B hospitals provided more than $64.2 billion in total benefits for their communities, according to the AHA.

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com