HR 2674 IHCommentsClose CommentsPermalink

112th CONGRESSCommentsClose CommentsPermalink

1st SessionCommentsClose CommentsPermalink

H. R. 2674CommentsClose CommentsPermalink

To amend section 340B of the Public Health Service Act to improve the provision of discounts on drug purchases for certain safety net providers.CommentsClose CommentsPermalink

IN THE HOUSE OF REPRESENTATIVESCommentsClose CommentsPermalink

July 27, 2011CommentsClose CommentsPermalink

Mrs. MCMORRIS RODGERS (for herself, Mr. RUSH, Mrs. EMERSON, Ms. BROWN of Florida, Mr. OWENS, Mr. CLARKE of Michigan, Mrs. CAPITO, Mr. CLEAVER, and Mr. YOUNG of Florida) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedCommentsClose CommentsPermalink

A BILLCommentsClose CommentsPermalink

To amend section 340B of the Public Health Service Act to improve the provision of discounts on drug purchases for certain safety net providers.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘340B Program Improvement Act’.CommentsClose CommentsPermalink

SEC. 2. EXTENSION OF DISCOUNTS TO INPATIENT DRUGS.

(a) In General- Section 340B of the Public Health Service Act (42 U.S.C. 256b) is amended--CommentsClose CommentsPermalink





(1) in subsection (a)--CommentsClose CommentsPermalink





(A) in paragraphs (1), (2), and (5), by striking ‘covered outpatient drug’ each place such term appears and inserting ‘covered drug’; andCommentsClose CommentsPermalink





(B) in paragraphs (1), (7), and (9), by striking ‘covered outpatient drugs’ each place such term appears and inserting ‘covered drugs’;CommentsClose CommentsPermalink





(2) in subsection (b)(2)(B) by striking ‘paragraph (3)(A)’ and inserting ‘paragraph (3)’; andCommentsClose CommentsPermalink





(3) in subsection (d), by striking ‘covered outpatient drugs’ each place such term appears and inserting ‘covered drugs’.CommentsClose CommentsPermalink





(b) Medicaid Credits on Inpatient Drugs- Section 340B of the Public Health Service Act (42 U.S.C. 256b) is amended by inserting after subsection (b) the following new subsection:CommentsClose CommentsPermalink





‘(c) Medicaid Credits on Inpatient Drugs-CommentsClose CommentsPermalink





‘(1) IN GENERAL- For each cost reporting period, based on the most recently filed Medicare cost report under title XVIII of the Social Security Act and subject to paragraph (5), a hospital described in subparagraph (L), (M), (N), or (O) of subsection (a)(4) and enrolled to participate in the drug discount program under this section shall provide to each State that has a plan for medical assistance under title XIX of such Act and that makes payment to such hospital for covered drugs provided to Medicaid recipients for inpatient use, a credit on the estimated annual purchases by such hospital of such covered drugs provided to such Medicaid recipients.CommentsClose CommentsPermalink





‘(2) AMOUNT OF CREDIT-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The credit described in paragraph (1), with respect to a hospital and cost reporting period described in such paragraph shall be equal to--CommentsClose CommentsPermalink





‘(i) the product of--CommentsClose CommentsPermalink





‘(I) the sum of the annual credit amounts (described in subparagraph (B)) calculated under subparagraph (B)(i) for each dosage form and strength of each covered drug purchased by the hospital during the cost reporting period; andCommentsClose CommentsPermalink





‘(II) the estimated percentage of the purchases of covered drugs by the hospital during such period attributable to Medicaid recipients for inpatient use, as determined in accordance with subparagraph (D); andCommentsClose CommentsPermalink





‘(ii) subject to paragraph (3)(D), reduced by the amount by which the Medicaid inpatient reimbursement (as defined in subparagraph (E)(ii)) of the hospital for such period was reduced as a result of participation in the drug discount program under this section during such period by the hospital, as determined in accordance with subparagraph (E).CommentsClose CommentsPermalink





‘(B) ANNUAL CREDIT AMOUNTS- For purposes of subparagraph (A)(i)(I), an annual credit amount, with respect to a covered drug purchased by a hospital described in paragraph (1) during a cost reporting period of the hospital--CommentsClose CommentsPermalink





‘(i) is equal to the sum of the quarterly credit amounts calculated under subparagraph (C)(i), for each of the 4 quarters of the cost reporting period for such covered drug; andCommentsClose CommentsPermalink





‘(ii) shall be calculated for each dosage form and strength of such covered drug.CommentsClose CommentsPermalink





‘(C) QUARTERLY CREDIT AMOUNTS- For purposes of subparagraph (B)(ii), a quarterly credit amount, with respect to a covered drug purchased by a hospital described in paragraph (1) during a quarter of the cost reporting period of the hospital--CommentsClose CommentsPermalink





‘(i) is equal to the product of--CommentsClose CommentsPermalink





‘(I) the total number of units of each dosage form and strength of such covered drug purchased by the hospital during such quarter;CommentsClose CommentsPermalink





‘(II) the average manufacturer price of the covered drug (for the unit of the dosage form and strength involved) during such quarter; andCommentsClose CommentsPermalink





‘(III) half of the rebate percentage for the covered drug, as defined in subsection (a)(2); andCommentsClose CommentsPermalink





‘(ii) shall be calculated for--CommentsClose CommentsPermalink





‘(I) each dosage form and strength of the covered drug purchased by the hospital; andCommentsClose CommentsPermalink





‘(II) each of the 4 quarters of such cost reporting period.CommentsClose CommentsPermalink





‘(D) PERCENTAGE OF DRUG PURCHASES ATTRIBUTABLE TO MEDICAID RECIPIENTS FOR IMPATIENT USE- For purposes of subparagraph (A)(i)(II), the estimated percentage of the drug purchases of the hospital attributable to Medicaid recipients for inpatient use shall be equal to the Medicaid inpatient drug charges as reported on the most recently filed Medicare cost report of the hospital, divided by the total drug charges reported on the cost report.CommentsClose CommentsPermalink





‘(E) CREDIT OFFSET-CommentsClose CommentsPermalink





‘(i) IN GENERAL- For purposes of subparagraph (A)(ii), the amount by which the Medicaid inpatient reimbursement of a hospital, with respect to a cost reporting period, is reduced as a result of the participation in the drug discount program under this section by the hospital shall be computed as the difference between--CommentsClose CommentsPermalink





‘(I) the Medicaid inpatient reimbursement that would have otherwise been payable to the hospital for the cost reporting period if the hospital did not participate in such drug discount program; andCommentsClose CommentsPermalink





‘(II) the actual Medicaid inpatient reimbursement payable to the hospital for the cost reporting period.CommentsClose CommentsPermalink





‘(ii) MEDICAID INPATIENT REIMBURSEMENT DEFINED- For purposes of this subsection, the term ‘Medicaid inpatient reimbursement’ means the total payments received by the hospital under the State plan under title XIX of the Social Security Act for providing inpatient services to Medicaid recipients.CommentsClose CommentsPermalink





‘(3) REQUIREMENTS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- A hospital shall not be required to provide a credit under paragraph (1) to a State unless, not later than 30 days after receiving the information described in subparagraph (B), the State calculates in accordance with paragraph (2) the amount of the credit owed by the hospital under paragraph (1) and provides the hospital with both the amount of such credit so owed and an explanation of how the State calculated such credit.CommentsClose CommentsPermalink





‘(B) HOSPITAL PROVISION OF INFORMATION- Not later than 30 days after the date of the filing of the most recently filed Medicare cost report of a hospital described in paragraph (1), the hospital shall provide the State involved with the information described in subparagraphs (C)(i)(I) and (D) of paragraph (2). With respect to each covered drug purchased during the cost reporting period, the hospital shall provide the National Drug Code, date of purchase, and the number of units purchased. Submission of such information shall not be required if a covered drug has not been assigned a National Drug Code at the time of purchase.CommentsClose CommentsPermalink





‘(C) ACCESS TO AMP AND REBATE DATA- The Secretary shall establish a system for giving States access to the information necessary for them to calculate credits under paragraph (2), with respect to covered drugs, including the average manufacturer price and rebate percentage for such covered drugs.CommentsClose CommentsPermalink





‘(D) CREDIT OFFSET- Paragraph (2)(A)(ii) shall be applied, with respect to a credit owed by a hospital under paragraph (1), only if, not later than 30 days after filing the most recent Medicare cost report, the hospital submits to the State involved--CommentsClose CommentsPermalink





‘(i) a request for the State to apply such paragraph and to calculate the amount described in such paragraph in accordance with paragraph (2)(E); andCommentsClose CommentsPermalink





‘(ii) the data needed by the State to determine the amount of the Medicaid inpatient reimbursement described in paragraph (2)(E)(i)(I) for such hospital.CommentsClose CommentsPermalink





‘(E) DISPUTES- A State and hospital described in paragraph (1) shall have access to the same State dispute resolution procedures and system applicable to Medicaid reimbursement matters under title XIX of the Social Security Act.CommentsClose CommentsPermalink





‘(4) PAYMENT DEADLINE- A hospital shall provide to a State the credits owed by such hospital under paragraph (1) not later than 60 days after the hospital receives the information described in paragraph (3)(A).CommentsClose CommentsPermalink





‘(5) OPT OUT- A hospital shall not be required to provide a credit under paragraph (1) to a State if the hospital and State agree to an alternative arrangement.CommentsClose CommentsPermalink





‘(6) OFFSET AGAINST MEDICAL ASSISTANCE- Amounts received by a State under this subsection shall be considered to be a reduction in the amount expended under the State plan for medical assistance for purposes of section 1903(a)(1) of the Social Security Act.CommentsClose CommentsPermalink





‘(7) MEDICAID RECIPIENT DEFINED- For purposes of this subsection, the term ‘Medicaid recipient’ means, with respect to a State, an individual who receives benefits under the State plan under title XIX of the Social Security Act.’.CommentsClose CommentsPermalink





(c) Conforming Amendments- Section 1927 of the Social Security Act (42 U.S.C. 1396r-8) is amended--CommentsClose CommentsPermalink





(1) in subsection (a)(5)--CommentsClose CommentsPermalink





(A) in subparagraph (A), by striking ‘covered outpatient drugs’ and inserting ‘covered drugs (as defined in section 340B(b)(2) of the Public Health Service Act)’; andCommentsClose CommentsPermalink





(B) by striking subparagraphs (D) and (E); andCommentsClose CommentsPermalink





(2) in subsection (c)(1)(C)(i)--CommentsClose CommentsPermalink





(A) by redesignating subclauses (II) through (VI) as subclauses (III) through (VII), respectively; andCommentsClose CommentsPermalink





(B) by inserting after subclause (I) the following:CommentsClose CommentsPermalink





‘(II) any prices charged for a covered drug, as defined in section 340B(b)(2) of the Public Health Service Act;’.CommentsClose CommentsPermalink

SEC. 3. PROHIBITION AGAINST DUPLICATE DISCOUNTS FOR PHYSICIAN ADMINISTERED DRUGS.

Section 340B(a)(5)(A) of the Public Health Service Act (42 U.S.C. 256b) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(iii) PHYSICIAN ADMINISTERED DRUGS- A hospital described in subparagraph (L), (M), (N), or (O) of paragraph (4) shall not be required under section 1927(a)(7) of the Social Security Act to report National Drug Code numbers for drugs administered by a physician (or under a physician’s supervision) if the State is precluded from seeking a rebate on such drugs because such drugs were purchased at a discount under this section. Nothing in this clause shall relieve a hospital of its obligation to submit National Drug Codes in accordance with subsection (c)(3)(B).’.CommentsClose CommentsPermalink

SEC. 4. CONTINUED INCLUSION OF ORPHAN DRUGS IN DEFINITION OF COVERED OUTPATIENT DRUGS; TECHNICAL AMENDMENT.

(a) In General- Section 340B of the Public Health Service Act (42 U.S.C. 256b) is amended by striking subsection (e).CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by subsection (a) shall apply to drugs purchased on or after March 30, 2010.CommentsClose CommentsPermalink

SEC. 5. APPLICATION OF RULES FOR DETERMINING PROVIDER-BASED STATUS FOR CERTAIN ENTITIES.

Notwithstanding any other provision of law, in making determinations of provider-based status under title XVIII of the Social Security Act, the facility or organization shall be treated as satisfying any requirements and standards for geographic location in relation to a hospital or a critical access hospital if the facility or organization is described in subparagraph (L), (M), (N), or (O) of section 340B(a)(4) of the Public Health Service Act (42 U.S.C. 256b(a)(4)).CommentsClose CommentsPermalink