House Commerce Subcommittee Issues Testimony From Parkland Health & Hospital System
"Chairman Burgess, Ranking Member Green and members of the Subcommittee, thank you for the opportunity to speak to you regarding the importance of the 340B Program. I commend your leadership in ensuring the integrity of the program and hope to give your subcommittee meaningful feedback on policy related to the program.
"My name is
"Located in
"In fiscal year 2017, Parkland provided approximately
Overview of Parkland's 340B Program
"Parkland has participated in the 340B Program since its inception. The program is a critical component to fulfilling our mission to serve the most vulnerable in our communities. Our Medicare DSH percentage for fiscal year 2017 was 47.52% well above the 340B eligibility threshold of 11.75%. The health system holds 101 HRSA site registrations: one parent (DSH), 83 child sites (DSH), ten family planning sites and seven FQHC sites.
"In 2017, the 340B Program saved Parkland and the
"Under our Parkland Financial Assistance program,
Parkland's Compliance and Oversight of 340B
"Compliance is an incredibly important and essential piece of the program. We have one dedicated 340B manager assigned to oversee the program and he serves as the primary contact
"for HRSA. We also established a multi-disciplinary team to assist with compliance which includes staff from pharmacy, legal, corporate compliance, government reimbursement, procurement and information technology. We believe self-audits are the backbone of a compliant 340B Program. We perform quarterly scheduled audits on both the inpatient and outpatient areas. We also perform other targeted audits throughout the year in order to better ensure program compliance. Our audits are based on educational materials and guidance provided by the Prime Vendor Program, Apexus. While we believe we are thorough in self-auditing, clearer guidance by HRSA would strengthen compliance adherence by covered entities.
"Parkland does not currently have any contract pharmacy relationships. We have had companies solicit Parkland to develop a contract pharmacy relationship in order to generate savings. We are fortunate to be able to provide all of our 340B pharmacy services in-house. While contract pharmacy savings could be used to further care for our low-income patients, we share
RECOMMENDATIONS
1) Program Intent: The original intent of the 340B Program was to "enable covered entities to stretch scarce Federal resources as far as possible." This intent is still relevant today and therefore we believe
"reduced cost drugs. Savings are also used system-wide to benefit our patients, the majority of whom are uninsured or on Medicaid. In 2017, Parkland dispensed 1.6 million outpatient prescriptions. Tracking each of these prescriptions by site of origin or by individual patient characteristics would be very difficult to manage. All Parkland outpatient clinics are registered with HRSA and our pharmacies only fill 340B eligible prescriptions. Therefore, we only maintain a 340B drug inventory at each pharmacy. Even though an overwhelming majority of our patients are indigent, narrowing the program's scope to a certain patient qualifier (regardless of the number qualified - 1% or 99% of patients), would require the use of a wholesale acquisition cost (WAC) based virtual inventory. Limiting 340B drugs to certain patient types would require the purchase of more expensive pharmaceuticals for our other patients, more tracking software and more human resources to operate and maintain compliance.
2) HRSA Oversight: Parkland supports efforts to strengthen HRSA oversight to police both covered entities and drug manufacturers. The agency must be given the appropriate tools to ensure the integrity of the program. Covered entities must be given clear regulatory guidance.
3) Reporting of Savings and Uses: Covered entities should be transparent in how the 340B Program is being used to provide charity care to patients and we support reporting the savings to HRSA. Any reporting requirements should clearly define the method of how to calculate the savings.
4) Restore Medicare Outpatient Prospective Payment Cuts: The cuts significantly harm safety-net systems, which are providing the majority of care to those who are low- income and uninsured. The increased burden for
5) Contract Pharmacies: These pharmacies are essential for many 340B participants to extend access to low-cost drugs for many patients since not all entities are able to have in-house pharmacies. Better oversight is needed to ensure that these arrangements are appropriately targeting low-income patients and that these patients are benefitting from the 340B prices.
6) Moratorium on new 340B entities and child-sites: A moratorium will only limit access for persons who are low-income. As the population grows and demographics change, safety-net systems should be allowed to receive 340B discounts via new clinics or new accounting cost centers in order to serve the indigent according to the intent of the program. If this moratorium is being used to limit the number of new covered entities or child sites, do not limit those providers who are truly caring for the low- income and uninsured. Many of those safety-net systems like Parkland serve patients in medically-underserved areas and make decisions on clinic locations based on the needs of their communities. If the intent is to limit the scope of the program a preferred approach would be to increase the DSH percentage."
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