I
118THCONGRESS
1
STSESSION H. R. 198
To increase reporting requirements and transparency requirements in the
340B Drug Pricing Program, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY9, 2023
Mr. R
OSENDALEintroduced the following bill; which was referred to the Com-
mittee 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 concerned
A BILL
To increase reporting requirements and transparency require-
ments in the 340B Drug Pricing Program, and for other
purposes.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Drug Pricing Trans-4
parency and Accountability Act’’. 5
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SEC. 2. MORATORIUM ON REGISTRATION OF NEW NON- 1
RURAL SECTION 340B HOSPITALS. 2
Section 340B(a) of the Public Health Service Act (42 3
U.S.C. 256b(a)) is amended— 4
(1) in paragraph (4)(L), by striking ‘‘A sub-5
section (d) hospital’’ and inserting ‘‘Subject to para-6
graph (11), a subsection (d) hospital’’; and 7
(2) by adding at the end the following: 8
‘‘(11) M
ORATORIUM ON REGISTRATION OF CER -9
TAIN HOSPITALS.—During the 2-year period begin-10
ning on the date of the enactment of this para-11
graph— 12
‘‘(A) an entity described in paragraph 13
(4)(L) shall not be considered a covered entity 14
under this section unless such entity was a cov-15
ered entity on such date (as evidenced by the 16
entity having been identified as a covered entity 17
as of such date under the covered entity identi-18
fication system established under subsection 19
(d)(2)(B)(iv)); and 20
‘‘(B) no site shall be added to the covered 21
entity identification system established under 22
subsection (d)(2)(B)(iv) or be permitted to 23
begin participating in the drug discount pro-24
gram under this section, as a ‘child site’ or oth-25
erwise, on the basis of association with a cov-26
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ered entity described in paragraph (4)(L) un-1
less such site was identified as a child site as 2
of December 31, 2020, under the system estab-3
lished under subsection (d)(2)(B)(iv). 4
‘‘(12) R
EGULATIONS TO BE ISSUED DURING 5
THE MORATORIUM PERIOD TO IMPLEMENT STATU -6
TORY REQUIREMENTS CLARIFYING HOSPITAL ELIGI -7
BILITY CRITERIA AND HOSPITAL CHILD SITE STAND -8
ARDS AND ENHANCING HOSPITAL TRANSPARENCY .— 9
‘‘(A) I
SSUANCE OF REGULATIONS .— 10
‘‘(i) I
N GENERAL.—During the mora-11
torium period under paragraph (11), the 12
Secretary shall promulgate regulations 13
through notice and comment rulemaking to 14
implement the standards and requirements 15
described in subparagraph (B). 16
‘‘(ii) D
EADLINE.—Such final regula-17
tions shall be promulgated and take ef-18
fect— 19
‘‘(I) before the end date of the 20
moratorium described in paragraph 21
(11); or 22
‘‘(II) in the event that any of 23
such regulations have not taken effect 24
by such end date, the moratorium 25
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under subparagraph (11) shall be ex-1
tended until such regulations are final 2
and effective. 3
‘‘(iii) L
IMITATION.—The authority to 4
promulgate regulations under this para-5
graph is limited to setting forth the details 6
necessary and appropriate to carry out the 7
requirements of subparagraph (B) effi-8
ciently, effectively, and in conformity with 9
such subparagraph. 10
‘‘(B) S
TANDARDS AND REQUIREMENTS .— 11
‘‘(i) H
OSPITAL CHILD SITE STAND -12
ARDS.— 13
‘‘(I) I
N GENERAL.—Hospitals de-14
scribed in subparagraphs (L) and (M) 15
of paragraph (4) may register off- 16
campus outpatient facilities associated 17
with the hospital (also known as ‘child 18
sites’) to participate in the drug dis-19
count program under this section (be-20
ginning after the moratorium under 21
paragraph (11) ends), if— 22
‘‘(aa) the site is listed on the 23
hospital’s most recently filed 24
Medicare cost report on a line 25
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that is reimbursable under the 1
Medicare program (or, if the hos-2
pital is a children’s hospital that 3
does not file a Medicare cost re-4
port, the hospital submits to the 5
Secretary a signed statement cer-6
tifying that the facility would be 7
correctly included on a reimburs-8
able line of a Medicare cost re-9
port if the hospital filed a cost 10
report); 11
‘‘(bb) such cost report dem-12
onstrates that the services pro-13
vided at the facility have associ-14
ated costs and charges for hos-15
pital outpatient department serv-16
ices under title XVIII of the So-17
cial Security Act (or, if the hos-18
pital is a children’s hospital that 19
does not file a Medicare cost re-20
port, the hospital submits to the 21
Secretary a signed statement cer-22
tifying that the services provided 23
at the facility include or consist 24
solely of outpatient services); 25
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‘‘(cc) the facility is wholly 1
owned by the covered entity; 2
‘‘(dd) the Secretary has 3
made a determination, under the 4
process described in section 5
413.65(b) of title 42, Code of 6
Federal Regulations (or any suc-7
cessor regulations), that the facil-8
ity meets the Medicare provider- 9
based standards under section 10
413.65 of title 42, Code of Fed-11
eral Regulations (or any suc-12
cessor regulations); 13
‘‘(ee) the facility provides a 14
full range of outpatient services, 15
in addition to drugs; and 16
‘‘(ff) the facility adheres to 17
the charity care policy and any 18
sliding fee scale policy of the par-19
ent hospital. 20
‘‘(II) D
E-REGISTRATION.—If at 21
any time following registration one or 22
more of the standards listed above are 23
no longer satisfied, a registered hos-24
pital shall immediately notify the Sec-25
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retary, de-register the facility, and 1
keep the facility from making any 2
purchases under the drug discount 3
program under this section or rep-4
resenting to third parties that it may 5
purchase under such program. 6
‘‘(ii) H
OSPITAL ELIGIBILITY STAND -7
ARDS FOR HOSPITALS NOT OWNED OR OP -8
ERATED BY A UNIT OF STATE OR LOCAL 9
GOVERNMENT.—For purposes of subpara-10
graph (L)(i) of paragraph (4): 11
‘‘(I) A private hospital has been 12
formally granted governmental powers 13
by a unit of State or local government 14
if the Secretary receives a certification 15
from a State or local governmental 16
entity that such governmental entity 17
has formally delegated, through State 18
or local statute or regulation or, if 19
permitted by applicable State or local 20
law, through a contract with a State 21
or local government, to the hospital 22
such a power, described in detail in 23
the certification. 24
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‘‘(II) A private hospital has a 1
contract with a State or local govern-2
ment to provide health care services to 3
low-income individuals who are not 4
entitled to benefits under Medicare or 5
Medicaid if— 6
‘‘(aa) the hospital submits a 7
copy of the contract to the Sec-8
retary for review; 9
‘‘(bb) the Secretary deter-10
mines that the contract creates 11
an enforceable obligation for the 12
hospital to provide direct medical 13
care to low-income individuals in-14
eligible for Medicare and Med-15
icaid in an amount that rep-16
resents at least 15 percent of the 17
hospital’s total costs for all items 18
and services furnished at such 19
hospital; and 20
‘‘(cc) the contract is avail-21
able to the public as part of the 22
information describing the hos-23
pital in the covered entity identi-24
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fication system established under 1
subsection (d)(2)(B)(iv). 2
‘‘(III) If at any time a hospital 3
not owned or operated by a unit of 4
State or local government no longer 5
meets one or more requirements 6
under subclause (I) or (II), the hos-7
pital shall immediately notify the Sec-8
retary, dis-enroll from the drug dis-9
count program under this section, and 10
stop making purchases under such 11
program and representing to third 12
parties that it may purchase under 13
such program. 14
‘‘(iii) H
OSPITAL TRANSPARENCY RE -15
QUIREMENTS.— 16
‘‘(I) H
OSPITAL REQUIREMENTS 17
TO IDENTIFY SECTION 340B DRUGS .— 18
In the case of covered entity hospitals 19
described in subparagraph (L) of 20
paragraph (4): 21
‘‘(aa) Claims for covered 22
outpatient drugs purchased 23
under the drug discount program 24
under this section shall be sub-25
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mitted to public and private 1
payors using the 340B modifier 2
established by the Secretary 3
under the prospective payment 4
system for hospital outpatient de-5
partment services, in conform-6
ance with paragraph (22) of sec-7
tion 1833(t) of the Social Secu-8
rity Act, subsection (h) of 9
1847A, subparagraph (F) of sec-10
tion 1927(a)(5), and paragraph 11
(5) of section 1857(g), that is 12
‘JG’. 13
‘‘(bb) Such hospitals shall 14
report to the Secretary on an an-15
nual basis, in a form and manner 16
specified by the Secretary— 17
‘‘(AA) the hospital’s ag-18
gregate annual revenue from 19
drugs purchased under the 20
program under this section, 21
minus its aggregate annual 22
acquisition costs for such 23
drugs, broken out by hos-24
pital and by each child site; 25
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‘‘(BB) any dispensing 1
fees paid by the hospital or 2
child site to contract phar-3
macies for such drugs; 4
‘‘(CC) the patient mix, 5
broken down by expected 6
payment source (including 7
at least the Medicare pro-8
gram under title XVIII of 9
the Social Security Act, a 10
State plan under the Med-11
icaid program under title 12
XIX of such Act, private in-13
surance, and uninsured indi-14
viduals), for each such hos-15
pital, and each child site of 16
the hospital listed in the 17
covered entity information 18
system established under 19
subsection (d)(2)(B)(iv), and 20
the costs incurred at each 21
such hospital and site for 22
charity care (as described in 23
line 23 of Worksheet S– 24
10—Hospital Uncompen-25
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sated and Indigent Care 1
Data to the Medicare cost 2
report or as reported in any 3
successor form); 4
‘‘(DD) the percent of 5
total revenues (net of any 6
discounts) at each site de-7
rived from infusion or injec-8
tion of physician-adminis-9
tered drugs, including any 10
associated items or services 11
furnished incident-to the ad-12
ministration of such drugs; 13
and 14
‘‘(EE) with respect to 15
such hospital and each child 16
site of the hospital, the 17
names of all third-party ven-18
dors or other similar entities 19
(including split fee vendors 20
and contract pharmacies) 21
that the covered entity con-22
tracts with to provide serv-23
ices associated with the pro-24
gram under this section 25
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(broken down by covered en-1
tity and by each child site). 2
‘‘(II) P
UBLIC AVAILABILITY.— 3
The Secretary shall make the infor-4
mation reported to the Secretary 5
under subclause (I)(bb) available to 6
the public (with redactions of any in-7
formation the Secretary determines to 8
be proprietary or confidential) in an 9
annual compilation of the reported in-10
formation available on the internet 11
website of the Department of Health 12
and Human Services, and as part of 13
the information describing the hos-14
pital and the relevant child site in the 15
covered entity identification system 16
established under subsection 17
(d)(2)(B)(iv).’’. 18
SEC. 3. 340B CLAIMS MODIFIER. 19
(a) M
EDICAID.—Section 1927(a)(5) of the Social Se-20
curity Act (42 U.S.C. 1396r–8(a)(5)) is amended by add-21
ing at the end the following: 22
‘‘(F) 340B
CLAIMS MODIFIER.— 23
‘‘(i) I
N GENERAL.—All claims sub-24
mitted to a Medicaid fee-for-service pro-25
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gram or a medicaid managed care organi-1
zation (as defined in section 2
1903(m)(1)(A)) for reimbursement of a 3
unit of a covered outpatient drug subject 4
to an agreement under section 340B of the 5
Public Health Service Act shall include the 6
340B modifier established by the Secretary 7
under the prospective payment system for 8
hospital outpatient department services 9
under section 1833(t) that is ‘JG’ or the 10
Submission Clarification Code of ‘20’ de-11
veloped by the National Council for Pre-12
scription Drug Programs (NCPDP). 13
‘‘(ii) D
ATA SHARING.—Each single 14
State agency shall make available to a 15
manufacturer of a covered outpatient drug 16
any fee-for-service or managed care claim 17
for reimbursement for a unit of such drug 18
for the purpose of verifying the propriety 19
of any claim for a rebate payment under 20
an agreement under subsection (b) with re-21
spect to such drug. At the manufacturer’s 22
request, in lieu of making such a claim 23
available to the manufacturer, the single 24
State agency may instead provide a list of 25
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claims (and relevant data concerning each 1
claim) for covered outpatient drugs that 2
were purchased under an agreement under 3
section 340B of the Public Health Service 4
Act or other summary data specified by 5
the manufacturer. 6
‘‘(iii) R
EPORT.—Each single State 7
agency shall publish an annual report on 8
utilization of covered outpatient drugs sub-9
ject to an agreement under section 340B 10
of the Public Health Service Act by the 11
Medicaid fee-for-service program or a med-12
icaid managed care organization (as de-13
fined in section 1903(m)(1)(A)) during the 14
preceding calendar year. The State agency 15
shall not include confidential patient-spe-16
cific, drug-specific, or manufacturer-spe-17
cific information in any such annual re-18
port.’’. 19
(b) M
EDICARE.— 20
(1) M
EDICARE PART B.— 21
(A) H
OSPITAL OUTPATIENT DEPARTMENT 22
SERVICES.—Section 1833(t) of the Social Secu-23
rity Act (42 U.S.C. 1395l) is amended by add-24
ing at the end the following paragraph: 25
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‘‘(22) 340B CLAIMS MODIFIER.—All claims sub-1
mitted under the system under this subsection for 2
reimbursement of a unit of a covered outpatient 3
drug subject to an agreement under section 340B of 4
the Public Health Service Act shall include the 340B 5
modifier established by the Secretary under such 6
system that is ‘JG’ (or ‘TB’ in the case of a claim 7
for reimbursement under such system submitted by 8
a hospital described in subparagraph (M) or (N) of 9
section 340B(a)(4) of the Public Health Service Act 10
or a rural sole community hospital described in sub-11
paragraph (O) of such section).’’. 12
(B) O
THER PART B CLAIMS .—Section 13
1847A of the Social Security Act (42 U.S.C. 14
1395w–3a) is amended by adding the following 15
new subsection: 16
‘‘(k) 340B C
LAIMSMODIFIER.—All claims submitted 17
under this part (other than under the prospective payment 18
system for hospital outpatient department services under 19
section 1833(t)) for reimbursement of a unit of a covered 20
outpatient drug subject to an agreement under section 21
340B of the Public Health Service Act shall include the 22
340B modifier established by the Secretary under such 23
payment system that is ‘JG’.’’. 24
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(2) MEDICARE ADVANTAGE AND MEDICARE 1
PART D.—Section 1857(e) of the Social Security Act 2
(42 U.S.C. 1395w–27(e)) is amended by adding at 3
the end the following new paragraph: 4
‘‘(6) 340B
CLAIMS MODIFIER.—All claims sub-5
mitted to a Medicare Advantage organization or a 6
PDP sponsor under this part and part D, respec-7
tively, for reimbursement of a unit of a covered out-8
patient drug subject to an agreement under section 9
340B of the Public Health Service Act shall include 10
the 340B modifier established by the Secretary 11
under the prospective payment system for hospital 12
outpatient department services under section 13
1833(t) that is ‘JG’ or the Submission Clarification 14
Code of ‘20’ developed by the National Council for 15
Prescription Drug Programs (NCPDP).’’. 16
(3) R
EPORT ON UTILIZATION UNDER MEDICARE 17
PART B.—The Secretary of Health and Human 18
Services shall publish an annual report on utilization 19
under part B of title XVIII of the Social Security 20
Act (42 U.S.C. 1395j et seq.) of covered outpatient 21
drugs purchased subject to an agreement under sec-22
tion 340B of the Public Health Service Act (42 23
U.S.C. 256b) during the preceding calendar year. 24
The Secretary shall not include confidential patient- 25
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specific, drug-specific, or manufacturer-specific in-1
formation in any such annual report. 2
(c) E
FFECTIVEDATE.—The amendments made by 3
this section take effect on the date that is 6 months after 4
the date of enactment of this Act and apply to claims sub-5
mitted on or after that date. 6
SEC. 4. REPORTS TO CONGRESS. 7
Section 340B of the Public Health Service Act (42 8
U.S.C. 256b) is amended by adding at the end the fol-9
lowing: 10
‘‘(f) R
EPORTS TOCONGRESS.— 11
‘‘(1) OIG
REPORT.—Not later than 2 years 12
after the date of the enactment of this subsection, 13
the Office of the Inspector General shall submit to 14
Congress a final report on the level of charity care 15
provided by covered entities described in subpara-16
graph (L) of subsection (a)(4) and separately by 17
child sites of such covered entities. 18
‘‘(2) GAO
REPORTS.— 19
‘‘(A) I
NITIAL REPORT.—Not later than 1 20
year after the date of the enactment of this 21
subsection, the Comptroller General of the 22
United States shall submit to Congress a re-23
port— 24
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‘‘(i) analyzing the State and local gov-1
ernment contracts intended to satisfy the 2
requirement under subsection (a)(4)(L)(i) 3
for a covered entity to qualify as an entity 4
described in subparagraph (L) of sub-5
section (a)(4); 6
‘‘(ii) assessing the amount of care 7
such contracts obligate such entity to pro-8
vide to low-income individuals ineligible for 9
Medicare under title XVIII of the Social 10
Security Act and Medicaid under title XIX 11
of such Act; and 12
‘‘(iii) analyzing how these contracts 13
define low-income individuals and whether 14
the Secretary reviews such determinations. 15
‘‘(B) S
UBSEQUENT REPORT .—Not later 16
than 2 years after the date of the enactment of 17
this subsection, the Comptroller General of the 18
United States shall submit to Congress a final 19
report on the difference between the aggregate 20
gross reimbursement and aggregate acquisition 21
costs received by each such covered entity (in-22
cluding child sites of such entity) for drugs sub-23
ject to an agreement under this section.’’. 24
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SEC. 5. MEDICARE REQUIREMENT FOR HOSPITALS RE-1
GARDING 340B DRUG INFORMATION. 2
(a) I
NGENERAL.—Section 1866(a)(1) of the Social 3
Security Act (42 U.S.C. 1395cc(a)(1)) is amended— 4
(1) in subparagraph (X), by striking ‘‘and’’ at 5
the end; 6
(2) in subparagraph (Y), by striking the period 7
at the end and inserting ‘‘, and’’; and 8
(3) by inserting after subparagraph (Y), the fol-9
lowing new subparagraph: 10
‘‘(Z) in the case of a hospital that is a covered 11
entity under subsection (a)(4) of section 340B of the 12
Public Health Service Act, to include in any cost re-13
port submitted to the Secretary under this title in-14
formation on— 15
‘‘(i) the aggregate acquisition costs of the 16
hospital for drugs, the purchase of which were 17
attributed to the hospital, during the period 18
covered by such cost report and for which the 19
hospital received a discount under such section 20
340B; and 21
‘‘(ii) the aggregate revenues the hospital 22
received from all payors for such drugs, 23
disaggregated by insurance status (including 24
the Medicare program, the Medicaid program, 25
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the Children’s Health Insurance Program, pri-1
vate health insurance, and uninsured).’’. 2
(b) E
FFECTIVEDATE.—The amendments made by 3
subsection (a) shall apply to contracts entered into or re-4
newed on or after the date of the enactment of this Act. 5
Æ
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