Excerpts From the House Energy and Commerce Health Subcommittee Hearing on Medicare Payment Reforms, May 21, 2014
(Note: This is an unofficial transcript. Click here for a video recording of the hearing.)
Rep. Tim Murphy's (R-Penn.) colloquy with MedPAC Executive Director Mark Miller
Murphy: Some centers have a 340B program so they are able to obtain drugs as long, as I understand, if they are a nonprofit agency, they can qualify to purchase drugs under the 340B program. Am I correct?
Miller: There may be some more requirements than that but I'll stay with you for the moment…..
Murphy: Well let’s say a private physician’s office, for a for-profit clinic or something, would not be able to purchase drugs on those discounts. Am I correct?
Miller: I am pretty sure that’s correct.
Murphy: One of the concerns that I frequently hear about the 340B program, first of all it’s a great program and I support it strongly in many instances, but we also hear some are claiming there’s some abuses of that program where hospit… – well some centers – will purchase drugs at discount but then they’ll sell them at the mark up again and get this money. Now is that something that some of these other private clinics or physician offices, are they able to purchase drugs under the 340B program?
Miller: Again, I'm not deep on this given the subject of the hearing, I didn’t study down on this one, my sense is no that it’s not available to them.
Murphy: So this adds another issue here. What I hear frequently across the board, hospitals and physicians saying that reimbursement rates for Medicare doesn’t really cover their costs sufficiently. They complain about the low reimbursement rates, but what you're telling me is that if we focus also on what…if some of them are also making money on the 340B program, and maybe this is out of your wheel house, but is that…that’s another area of disparity if there is differences between people who generally qualify versus those who may not qualify but the hospitals still getting some 340B money out of this.
Miller: To the extent that the facts that you and I are talking about here, without me doing the homework on it, yes that would be true. And I would say to you similar to what I said to the Congresswoman over here, this is an issue that we have not come forward on because there is still a fair amount of staff work to be done on it but we have started to try and look at it for the issues…
Murphy: We hope that’s information you will provide this committee.
Rep. Renee Ellmers's (R-N.C.) colloquy with MedPAC Executive Director Mark Miller
Ellmers: I know some of my colleagues have asked about the 340B program and I believe you had said that at this point it is being looked at. Is that correct? That you’re not ready to kind of weigh in on it?
Miller: Yeah, I haven’t even taken the commission through it because the research is really still very much at the formative and staff level.
Ellmers: Okay.
Miller: But we’re not oblivious to the issue. That’s the point I would like for the committee to know.
Ellmers: Okay, well great, you know and I’ll tell you it is a concern of mine because I do believe that there’s, just as you’re looking into the issue, I think that there’s a lot of gray area there and I think that this is one of those issues when we’re looking at health care savings and dollars that are being saved and of course first and foremost patient access to care especially those who are you know in an economic disadvantaged situation that these programs are very worthwhile and we need to make sure that they’re sustainable. Unfortunately I’m not at this point sure that we really know where those dollars are going. And I think that is something that we need to get to the bottom of. And you know with that I'll just follow up by saying that about a year ago, last year, Commander Pedley, the head of HRSA, had stated that she was not sure where the dollar savings, where the money was going, and I think that is a significant statement because if the government doesn’t know, I mean shouldn’t the government know where these dollars are going and how they are being utilized?
Miller: I think so.
Ellmers: Yeah, and there again and I'll just get back to the issue of…
Miller: But I want to assure you that we wouldn’t look at that issue strictly as a savings issue we would look at it as a program integrity issue, which you’re pointing too, assurance for beneficiary access, assurance that we’re paying fairly, and then if that turns out that we’re letting dollars go out the door that shouldn’t go out the door then that will be the outcome.
Ellmers: I think, you know, from my perspective, it’s an issue of are those dollars going to save, you to the care that those patients who require charity care is…you know…if a hospital is a 340B hospital, are those dollars truly going where they are supposed to go and there again and certainly not ever thinking that a hospital would be playing games but I think if there is a wide and a very gray area there I think that the hospital would utilize them as they need to. And I think that might be something that we need to work on into the future.
Rep. Bill Cassidy's (R-La.) colloquy with MedPAC Executive Director Mark Miller
Cassidy: I’m very interested in the 340B program. And you may decide that you may not wish to comment on this but to what degree…I'll read this because it was prepared for me, it’s asked to me. In the last few weeks a report by the IMS on global oncology trends as well as other things shows that there is a different cost for Herceptin at different sites of service. That if you have a 340B hospital oncology based program that the delta between what they are charging and paying is such that it creates a competitive advantage relative to community oncologic services. Any comment upon this?
Miller: I really apologize; I’m not deep on that. There were a couple of other questions on this. The only thing that I can offer you is the commission is aware of this issue and I have some work going on but it is very developmental at this stage. I haven’t even taken it out in front of the commission. So, the only comfort that I can give you is we’re not tone deaf, we understand that that is going on. We will start looking at…we are looking at it.