August 20, 2025 • 55 mins
Join host Chad Mulvany as he shares the latest healthcare policy and legislative updates for the week of August 17, 2025. Later in the episode, Chad is joined by guest Brian Bell, principal in the Healthcare Consulting practice at Forvis Mazars. Together, they delve into evolving regulations, legislation, and litigation surrounding the 340B Drug Pricing Program. Chad and Brian also explore strategies to help healthcare organizations maintain financial discipline and regulatory excellence amid these changes.
- Washington Watch (1:30)
- Bell Interview (19:18)
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Learn how to prepare for the 340B Rebate Model Pilot Program.
See tips for navigating the annual 340B recertification period.
Register for OBBBA Tuesdays, our biweekly webinar series covering the healthcare implications of the One Big Beautiful Bill Act.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
On today's episode of Achieving Health,
I've got the latest policy and legislativeupdates from Washington, D.C.
for the week of August 18th, 2025.
Then, I'll be joined by my colleagueBrian Bell,
principal in the HealthcareConsulting practice at Forvis Mazars.
We'll dive into the 340B drug pricing
program, including strategiesto get the most out of it,
(00:24):
as well as new policies and legislationthat could change how the program works.
Stay tuned.
This is AchievingHealth, a podcast from Forvis Mazars,
where we delve into the topicsthat matter most to healthcare
organizationsacross the continuum of care.
Our goal is to help younavigate the dynamic healthcare landscape
(00:44):
and achieve health at your organization.
Here's your host, Chad Mulvany.
Welcome to Achieving Health.
I'm Chad Mulvany, Director inthe Healthcare practice at Forvis Mazars.
Thank you for joining me today.
I'd like to start out
with a quick reminderabout our OBBBA Tuesdays webinar series,
which starts August 26th and continuesevery other Tuesday through November 4th.
(01:09):
We'll dive into the healthcareimplications of the One Big Beautiful Bill
Act and explore how hospitals and healthsystems can prepare
for Medicaid cuts and the expectedincrease in the uninsured.
We'll have a link in the show noteswhere you can register.
I hope you'll be able to join us forwhat will be an insightful series
of webinars that will help organizationsprepare for these changes.
(01:30):
We'll begin today with our WashingtonWatch segment, where I share
updates on the most recent actionsof federal policymakers
and their anticipated impacton healthcare providers and payers.
Today's WashingtonWatch reflects information as of noon
Eastern Time on Friday, August 15th, 2025.
My comments are based onwhat's being reported by D.C.
(01:51):
trade pressat the time of the conversation,
mixed with a lot of judgmentabout where things may go,
based on my experience in D.C.
So today's remarks reflect informationas of this moment and will change.
With Congress out for recess, the paymentrules released, and the OBBBA rulemaking
not yet cranked up, it's been, dareI say, a slow couple weeks in D.C.
(02:14):
However,there's still plenty to talk about.
As far as our agenda is concerned,I want to touch on the Fed
fiscal 2026 funding bill
and also the potential extendersthat many providers need to see extended.
And we'll really cover herewhat happens when Congress gets back from
summer vacation, as it will quickly needto turn its attention to passing either
(02:36):
appropriation bills, a continuingresolution, or some combination of both
to prevent a federal governmentshutdown on October 1st.
Along with the funding bill, providersneed to monitor D.C.
to make sure the extendersthey care about ride
along with whatever is passed to hopefullykeep the government open.
We'll also talk a little bitabout the OBBBA’s
(02:57):
Rural Health Transformation Program.
During an appearance on one of the recentSunday shows, CMS administrator Dr.
Oz mentionedthat the applications for the RHTP
will be available for statesto complete in early September.
While it remains to be seenwho the individual states
will make the funding available toand how they will distribute it,
(03:18):
now's probably a good time to providesome high-level thoughts
about how to approachthis funding opportunity.
We also, from
the health insurance side,have seen the administration announce
something related towards short-termlimited duration insurance.
We knew this was coming,but HHS and the Treasury
recently announcedthey were going to revisit the definition
(03:39):
of short-term limited duration insurance,which will likely lead to
bills individual patients,who do have the coverage,
didn't anticipate, and also an increasein uncompensated care.
And speaking of uncompensated care,
my friends at HFMA have an articleabout increasing uncompensated care.
Given changes in coverage, this isprobably just the beginning of this trend,
(04:02):
so providers should take steps nowso they can be prepared for it.
So with that, let's dive into our agenda.
For 2026 federal government funding,
with approximately six weeksto go until the new fiscal year begins,
the path to legislation fundingthe government is unclear.
The Senate, before recess,
passed three relativelynoncontroversial appropriation bills.
(04:24):
This package includedthe Senate's military construction VA,
agriculture, and legislative branch bills,
three of them comprising about $188billion of the more than $1.6 trillion
in discretionaryspending that needs to be approved
before the new fiscal yearbegins on October 1st.
But with the nine other annualspending bills left untouched
(04:46):
until at least Septemberand only two bills passed by the House,
with approximately four weeks leftin the fiscal year when Congress returns,
it is likely that a stopgap
funding measure will be necessaryto avoid a government shutdown.
However, this may beeasier said than done.
Obviously,we have the standard disagreements
between political partiesover spending levels, policy riders,
(05:08):
and other legislative priorities, i.e.,a large healthcare package.
But this year, it's a little uniquegiven that Congress, before recess,
passed a package of rescissions, slashingspending by
approximately $9 billionfor public broadcast and foreign aid.
And this was done in a party linevote in both the House and Senate in July.
(05:28):
This was funding that was includedin the 2025 continuing resolution,
and part of a bipartisan agreementthat was subsequently rescinded.
As a result of this, I would say thattrust between the parties is low.
Further, Punchbowl, a news outletthat covers D.C., reports that
the White House is considering submittinga second rescission package to the Hill,
(05:50):
which, if submitted, it believeswould increase the odds of a shutdown.
Look, the ability
to handicapa shutdown is well beyond my abilities.
However, important to remember thatif there is a shutdown, Medicare
funding is mandatory spending, so paymentsto providers will continue to flow.
However, the extenders,which generally have enjoyed
(06:11):
bipartisan support, may expire.
The ones to watch would include: the Medicare Dependent Hospital Program, (06:14):
undefined
the Medicare Low-Volume Adjustmentprogram, the COVID-era Telehealth waivers,
Medicare Hospital at Home program,and the Medicare Rural Ambulance add-on,
as well as a further delay of the ACAMedicaid DSH cuts.
You know,I think it's more likely than not that
(06:36):
the Medicare Dependent Hospital Program,Low-Volume Adjustment, the Telehealth
waivers, the Hospital at Home program, andthe Rural Ambulance add-on get extended
if there is a shutdown whenever there isa 2026 funding bill that is passed.
However, I am less certainabout a further delay of the first
$8 billion in ACA Medicaid DSH cutsthat are scheduled to take effect
(07:00):
on October 1st of 2025 given fiscalconservatives concern about the deficit.
So, I think that is a place in particularthat it will be
worth watching,and for those concerned about it to have
continuing conversationswith your congressional representatives.
Moving on
to the Rural Health TransformationProgram, OBBBA, as many are aware,
(07:23):
creates a Rural Stabilizationfund with $50 billion.
This is to be paid outas $10 billion annually
across Fed fiscal years 2026 through 2030.
States can submit a one-time
application for their share of the funds.
CMS Administrator Dr.
Oz has said the application will beavailable to states in early September.
(07:46):
In this application, stateswill need to outline
a detailed rural healthtransformation plan.
And just to clarify, the fundingis only available to the 50 states.
If you assume that all 50 states applyand are accepted,
the way the legislation is writtenor the statute is written,
half of the $10 billion inany given year is distributed
(08:07):
evenly,so each state would get a $100 million.
Again, assuming everybody applies,everybody gets accepted.
The other half is allocatedbased on a statutory formula
that includes the percentageof the state's population that is rural,
the percentage of rural providers,as defined in statute
in a state,relative to the national total, the quote
(08:28):
unquote “situation” of MedicaidDSH hospitals in the state,
and other factorsCMS thinks is appropriate.
From there, once a state is approvedand receives the funding, it's
going to be up to the states to decidehow to spend the money and who gets it.
The statute includes a list ofpotential uses, and I'm going to shorthand
many of these because reading long listsisn't the most compelling podcast.
(08:52):
At least that's what they tell me.
So the uses include (08:53):
prevent and manage chronic disease, increase provider
payments, adopt technologiesto improve care delivery,
recruit clinicians to rural communities,right-size rural delivery systems,
support access to substance use disordertreatment, encourage innovative
care models, and other uses
aligned with the program's goals,as determined by the CMS administrator.
(09:17):
A state has tochoose at least three of these activities.
So, there’ll kinda be a menu of optionsregardless of how the state applies.
While there has been a lot of interestin this fund from providers,
I would suggest, at the riskof stating the obvious, considering this
as a part of an OBBBAresponse slash sustainable strategy,
(09:38):
not the whole strategy, and I'd suggestthis for a couple of reasons.
First, while $50 billion over five yearsis certainly a significant investment
in rural healthcare, the Kaiser FamilyFoundation projects that rural areas
will lose $137 billion in federal Medicaidfunding over ten years.
That's approximately 37% of theestimated reduction in Medicaid funding.
(10:01):
So you know, what's coming backisn't enough to sort of
fill the hole of what's going out.
While the statute
defines rural healthcare providersfor purposes of the variable allocation,
it does not specify which providersare eligible for the funding,
nor how state should allocate it.
And even, again,want to just be clear, that
(10:21):
states aren't guaranteed by statutethe funding.
Further, the CMS administrator, Dr.
Oz, has reportedly toldseveral members of Congress
that non-rural areascould also obtain funds from the RHTP.
Therefore, it's possiblethat who receives funding may be broader
than the list of providers that's usedto allocate the fund and will be left,
(10:42):
or could be left, to the statesto determine, or future CMS guides.
And the other thing to remember is itmay include non-providers
or come with requirements to spend moneyon specific technologies or services,
in essence, acting as a pass-throughto a non-healthcare entity.
Further, while one of the permissibleuses of the funds is to provide
payments to providers, it seems unlikelythat a state would use the majority
(11:06):
of these dollars to specifically accountfor lost Medicaid revenue.
Reason why I say this is the fundingis time-limited, right?
The pool should be expended by 2030while Congress
may, or future Congressmay, provide more funding.
I'm not sure if I were a state
legislator, a state governor,or a health system executive
(11:28):
that I would count on Congressproviding that money.
So, if states provide revenue supportwithout requiring some type of significant
rural delivery system structuraltransformation, the state would need
to find additional funding in 2031if Congress doesn't re-up it.
So, it's going to put the statein a bit of an odd spot.
When you think about the fund,instead of kind of thinking about it
(11:49):
as a backfill for Medicaid revenue,given the parameters of the transformation
plan required in the applicationand the allowable uses of the funds,
it is likely that the states will requirethe dollars to be invested by recipients
in specific interventions
that improve outcomes or improvethe efficiency of care delivery.
And these are things
that will likely just need seed funding,but not ongoing support.
(12:13):
So, as a providerwho may be interested in eventually
applying to a state for these funds,I think the counsel
that I would offeris: revisit your strategic plans.
I would first look at the statute,what the statute
requires states to includein its Rural Health Transformation Plan.
I would look at the intended uses.
(12:33):
I would even think aboutwhat CMS administrator Dr.
Oz has said about his interests.
And then I'd look at your strategic planand sort of draw, you know,
whatever the center of that Venn diagramis probably the short
list of things where you might want tothrow your hat into the ring for funding
and could make a pretty strong argumentas to why you need those funds.
I would also sort of think about itin terms of an evolving process.
(12:57):
Obviously,there is a lot of uncertainty right now.
Some of this will become clarifiedwhen we see the application to states.
It will become even clearerwhen states submit applications.
And so, kind of start thinking about nowwhat your rationale is for the funding.
Refine that argument and refineany financial argument that you might have
as to what the ROI to the state would befor investments, as you better understand
(13:20):
what CMS wants the states to do with itand the state would like to do with it.
Theremay also be integration opportunities.
One required elementof a state's Rural Health Transformation
Plan focuses on strengthening localand regional strategic
partnerships between rural hospitalsand other healthcare providers.
So, there may be opportunitiesto use the funds
(13:40):
to support partnerships relatedto innovative care delivery models.
And this could include expandingvalue-based care.
States may choose to use RHTP funds
to implement or deploy value-basedcare models in rural areas
that will improve outcomesand reduce the total cost of care.
So, I think providersas you think about that
and that's somethingthat you're interested
in, you should start to evaluatepotential partners and risk-based models,
(14:03):
as well as the data and infrastructurenecessary to succeed
if a state choosesto use the funding for this purpose.
Moving on
to Short-Term Limited Duration Insurance.
HHS, the Treasury announced on August 7ththat they were planning rulemaking
to reconsider the definition of STLDIuntil the new rules are finalized.
However, the departments have saidthat they will not prioritize
(14:26):
enforcement actions against insurersthat do not fully comply
with the 2024 definition,including related notice requirements.
Regulationsexpanding the availability of Short-Term
Limited Duration Insurance were issuedduring the first Trump administration
as an alternative
to plans offered on the health insuranceexchanges and small group markets.
Subsequently, the Biden administrationlimited availability of these plans
(14:49):
and narrowed the definition of them.
So, expanding access to these plansmay leave
individuals underinsured and unawarethey're underinsured.
While these plans typicallymarket themselves as a cheaper alternative
to comprehensive coveragelike what is available on the exchange,
they typically also only paya fixed dollar amount of coverage
per day for hospitalizationthat's insufficient to cover the cost.
(15:12):
If these plans are expanded,hospitals in particular
will need to monitor their penetrationinto the markets they serve
and also adjust financial assistancepolicies and self-pay account
resolution strategies accordingly.
On a related note, I
mentioned earlier HFMA’sarticle about uncompensated care.
The article notes that full-year charitycare deductions for hospitals
(15:35):
with more than 200 beds surgedmore than 30% from 2022 to 2024.
And bad debtrose 18% during the same period.
The increase came even as hospitalswaited to write off medical debt longer.
The rise in bad debt and charitycare is in part fueled by higher rates
of denials and an uptick in ED visits fromuninsured and underinsured individuals.
(15:58):
And so, one of the things to think aboutis if you assume
the enhanced exchange subsidieswill expire at the end of the year,
and this is particularly truefor non-expansion states,
and the OBBBA work requirementsand more frequent eligibility
redterminationsgo into effect in 2027, the uninsured,
or the uncompensated care and bad debtnumbers will increase further.
(16:22):
The exchange subsidies have led to recordhigh enrollment in the ACA marketplaces.
Since 2020, the year before the enhancedsubsidies went into effect,
the number of people with ACAcoverage has grown by 88%
from 11.4 to 21.4 million.
All the growth in the marketplace,and over the last four years,
has really been a result of those enhancedadvance premium tax credits.
(16:47):
Subsidized enrollments upapproximately 106% from 9.6
million in 2020, to 19.7 million in 2024.
Further, the enhanced subsidies have cutpremium payments by an estimated 44%
for enrolleesreceiving premium tax credits.
If the subsidies expire,
most marketplace enrollees will seepremium payments increase substantially.
(17:09):
And already we're seeing from rate filingsthat plan premiums will increase
substantially because Congresshas essentially waited too long
to possibly take up legislationthat will extend those subsidies.
The changes to Medicaid and exchangeeligibility and OBBBA
are projected to increase the uninsuredby over 10 million individuals by 2034.
(17:30):
Most of the impact will occur through workrequirements for adults aged 19 to 64,
and increased eligibility
redetermination for individualsenrolled through the expansion pathway.
These two provisions aloneare expected to reduce Medicaid
spending by almost $400billion over 10 years.
Implications for providersis that they really need to start planning
(17:53):
and preparing for increased self-paycollections and uncompensated care now.
I think first, providers need to revisittheir financial assistance policies,
and this is particularly truefor tax-exempt organizations
to make sure they continue to meet
the needs of their communityin light of anticipated coverage losses.
Second, I think most organizationsare using presumptive
(18:14):
eligibility tools to determinewho is eligible for financial assistance.
But if you're not, it'sprobably a good time to start.
Third, in non-emergent situationswhere the patient is not eligible
for financial assistance,providers need to improve upfront cash
collections prior to service,revisit policies that define non-emergent
care, and determine
(18:34):
when it's appropriate to require fullor partial payment in advance of service,
and certainly startthinking about partnerships that can help
with the financing of servicesat the point of care.
Further, beyond revisitingfinancial assistance policies, tax-exempt
organizations should take other stepsto protect their status,
like review effortsto capture all community benefit expenses
on the 990 and amplify effortsto educate stakeholders
(18:57):
on the valuethat tax-exempt organizations provide.
This concludes today's Washington Watch.
Up next, I'll be joined by Brian Bellfor a conversation about 340B.
(19:17):
I'd like to welcome
our guest for today's episode, Brian Bell.
Brian is a principal in the HealthcareConsulting practice at Forvis Mazars.
He focuses on helping clientsidentify and implement
operational efficiencies, cost-reductionopportunities,
and revenue-generating strategiesrelated to the 340B program and pharmacy.
(19:38):
Brian, thanks for joining us today.
Hi Chad.
Yeah, I appreciate the opportunityto speak with you and the healthcare
community today, and as you said,I've dedicated my entire career
to the healthcare organizationsacross the country.
I've been doing thisfor more than 20 years.
And really have focused in on, kind of,a number of areas across the healthcare
(19:59):
spectrum from strategic reimbursement,revenue cycle, provider-based
clinics, margin improvement,and of course, 340B and pharmacy.
And truly my passionand I wake up every day
and enjoy the opportunity to workwith organizations across the country.
And thinking about kind of whatyou just summarized as your background,
it almost sounds like that, you know,the career path took you there, and it's
(20:22):
certainly an important program,particularly given the
financial challenges that covered entities
and other hospitalsand providers are facing.
Can you share a little bit more
about your backgroundas to how you came to the field?
Yeah, absolutely.
And you know, when I started, you know,going to college and really kind of
thinking through what I wanted to do,I really wanted to make a difference.
(20:44):
And I think I focused in on healthcarefrom day one in college and,
you know, worked at a hospitalthrough my internships and then
ultimately started in consulting,I was at a large international firm,
went to a very small regional firm andthen ultimately ended up at Forvis Mazars.
But I thinkwhen I was trying to figure out,
(21:06):
what do I want to be when I grow up,it was truly,
I wanted to try to help make a differenceand that's
really why I focused in on healthcare,kind of, for my entire career.
And then I think 340B and pharmacyis a really special place
because 340B means so muchto the covered entities
that have the abilityto participate in the program.
(21:30):
And really, without it, andI know we're going to spend a lot of time
talking about this, without itthere’d be a lot of, kind of,
differences in the accessand the quality of care that we receive,
you know, as patients on a day-to-daybasis across the country.
No, I think I think you're spot on.
And just a couple of thingsthat you said really resonated with me.
One, I think that wanting to makea difference has certainly been
(21:53):
one of the key themes that we've heardso far amongst all of our guests.
You know,
there are a lot of thingsthat all of us could be doing,
but we're all in healthcarebecause we want to improve the lives
of individuals in our communityto help them achieve optimal health.
And you know, when you thinkabout the 340B program in general,
you know, it's such a key programfor ensuring access
(22:14):
in the most disadvantagedof communities in our areas.
And that's why I think it'sjust such a vitally important program
to ensure that there is equitable accessto high-quality healthcare.
You know, Brian, there's
a lot going on in the 340B space,so what are the things
that you're monitoring, whether it'sregulatory, litigation, legislation,
(22:37):
that you think our listenersshould be following as it relates to 340B?
Yeah, absolutely.
And to say there's a lot of thingsis kind of an understatement.
So, we're closely monitoringa lot of things in this space.
The rebate model, or the pilot rebate
model, is top of mind for a lot of coveredentities around the country.
We're also monitoring futurefederal legislation
(23:00):
that could leadto significant reform of the program,
or keep the program closerto kind of how it operates today.
But we know that there'sa lot of debate in D.C.
over kind of what the 340B programshould look like in the future.
In addition
to some of that 340B federal legislation,we're also actively monitoring
(23:20):
some of the OPPS reimbursement changesas well as potential
site-neutrality changes.
These could be significant.
In addition to the federal side,also really keeping a close eye on
the state laws that are impactingcovered entities in a positive way.
There's also a number of reporting laws, and then a lot of litigation.
(23:41):
So, both at the federal and state level.
And then, kind of throw in the One
Big Beautiful Billand the potential impact on Medicaid.
These have really kept us busy.
Yeah.
Because, Imean, we're seeing a lot of organizations
having to watch their DPP closely justgiven the redeterminations post-COVID.
(24:02):
So, you start to throw in changesas a result of the work requirements.
The more frequent eligibility
determinations for the expansionpopulation starts
to put pressure on that, downwardpressure, again on that DPP, potentially.
You know,let's dive a little deeper into the couple
of the things that you mentioned.
And maybe we'll startwith the rebate model.
(24:22):
You know, we covered it in depthlast episode, but just for those
who didn't have a chance to listen,
to kind of get everybody up to speedso we're all on the same page.
On July 31st, HRSA released
its guidance around the pilotrebate model.
And it, you know, the good news is it's arelatively narrow pilot that's focused on
10 drugs that are subject to the Medicaredrug price negotiations for 2026.
(24:47):
And those are all Part D drugsso the impact is mostly going
to be felt through communityor contract pharmacies.
The model is structuredfor a minimum of one year.
And the important thing to note about thisis that HRSA’s notice states
that HRSA may allowfor an expansion of the rebate model
based on an assessment of the program.
(25:09):
And the key here for whatthe model is intended to address
is manufacturer concernsaround duplication of the 340B rebate
and the Inflation Reduction Actmaximum fair price.
In terms of timing,HRSA is going to approve applications
for a January 1st, 2026start date by October 15th.
(25:33):
And it is requiring that manufacturersapproved provide
at least 60 calendar days noticeto covered entities before implementation.
There are a handful of data elements.
It's a limited handful that coveredentities will be required to submit,
and in theory,
manufacturers will be required to payor deny the rebate within 10 days.
(25:56):
So, just kind of with that background,
what should covered entitiesbe doing to prepare for this?
To start, I was a little bit surpriserdwhen this came out
because it felt like HHS and HRSA had
really kind of stated that they weren'tsupportive of changing, kind of,
the program from a front-end cost savingsprogram to a back-end rebate model.
(26:18):
I think they received some pressureas far as kind of their approach to this.
And that's why this is a pilot.
But to your point, Chad,while I was a little surprised,
this could be a lot worse.
And so fortunately, the pilot’s limited
to the NDCs included in the IRA, and it'sa limited number of manufacturers.
It’d have truly been devastating
(26:39):
if it was all NDCs, all manufacturers,so it could have been worse.
I have a lot of concerns.
The current model,the way we think about the way our retail
pharmacies, contract pharmaciesreceive drugs and the way this
purchasing occurs, the current modeldoesn't really work for a rebate model
because of the way this purchasing set up.
(27:02):
For non-340B,
when we think about the contractpharmacies, they’re going to purchase
on that non-340B account,
and we need to figure outhow that's going to work in the future.
So this is going to be a big processchange
that requires a potential utilizationof an entirely different purchasing model.
The other side of this is resourcesand vendor management,
and these are really goingto be critical components
(27:23):
of how we're successful in a rebate modelworld.
So, covered entities are goingto really need to rely on their vendors
for good data to meet those reportingrequirements that you mentioned.
And then from a resource perspective,internally,
entities are going to need resources.
We're going to have to be ableto submit the claims.
And then there's going to have to be
(27:45):
a team that's built out to follow up.
So, similar to payer
denials, I'd expect that these rebatesare going to be difficult to claim.
And those denied rebatesare going to require follow up,
which is already going to hurta resource-strained entity even more. So,
there's a lot of work to be done.
And when we think about,you know, kind of receiving
(28:07):
which manufacturers are gonna moveforward, you know.
And in mid-October, we can't waituntil then to get our process set up.
So, we're gonna have to start nowto get it set up,
because recovery of that rebate, it'sgoing to be difficult.
We're going to have to focuson resources, technology, and process.
And like I said, we have to start today.
And I think lastly on the rebate model,while
(28:29):
I do expectthat there will be potential litigation,
I think that litigation will startafter the model's already implemented
because we've learned that from past caseswhere we're gonna have to show the harm.
We can't predict harmin order to file a case,
so I think organizations have a short road
ahead with a lot of work to doin order to get prepared for the model.
(28:52):
Yeah.
And, you know, Brian, you raisedan important point about litigation.
One (28:56):
yes, we'll have to wait to show the harm.
But two (28:59):
you know, one might say, okay, I'll wait.
But then you're also bettingthat a court will stay
the model while the case is heard.
And that's a pretty risky bet, I think.
And, you know, one of the things thatyou touched on in terms of implementing
and, you know, I like the analogythat you made from a process standpoint.
(29:21):
As you set this up,I think, kind of like the revenue cycle,
you have to start tracking certain
performance metricsaround this, by manufacturer,
to not only understand your performance,but because this is a pilot,
in theory, that HRSA is going to evaluatebefore it expands.
You need to be able to provide HRSA,
(29:42):
your state legislator,your federal legislators, folks at CMS,
other entities, a picture of howthis is impacting your organization.
And to me, some of the thingsthat I would want to track and set up
the infrastructure to automate to trackis by manufacturer timely processing.
So, how many of the manufacturers
are either paying a rebateor denying it within 10 days?
(30:04):
Denial rates, you know, your manufacturerdenial rate by claims count,
dollar value, percentage of both dollarsand claims, administrative expense,
how much you're spending on staffing,legal, IT and other support costs.
Because one of the thingsthat the notice says is that, you know,
covered entities should not bear costfor this model.
(30:25):
It's possiblethat they may have underappreciated
the people, process and technologythat you'll have to put into place
to succeed under thisand to capture those rebates.
You also mentioned some developmentsfrom the OPPS proposed rule.
What are your thoughts on the proposeddrug pricing survey
and what should providersknow as they respond?
(30:46):
Yeah, I think if you think backto the previous OPPS
reimbursement reductionfor 340B from 2018 through 2022,
the courts ruled in favor of the coveredentities because they stated
the federal government had not completedthat survey to determine the actual,
you know,kind of needs for the reimbursement cut.
So, I think this sets it up where we are
(31:09):
probably going to land on some cuts.
I think back to the OPPS remedy, though.
You know, it provided all of those dollarsback in the form of lump sum.
I think the one thing I wantedto kind of call out to the audience is
there are also a lot of organizationsfocused on the recoupment
of some of the Medicare Advantagereductions from ‘18 through ’22.
(31:29):
So, I think it becomes moreand more important to kind of hyper-focus
in on that as we kind of move into thisnext round of reductions,
but kind of fast forward to the currentproposed survey.
This is the first step in reductionor reimbursement for future 340B Part
B drugs.
When we look at the previous reduction,we were at ASP -22.5%.
(31:53):
So that was from ASP plus 6%.
So a 28.5% reduction.
And in
that ASPplus 6% is where we currently sit.
You know,I really would expect similar reductions
where we're probably going to bein that 28.5% plus range
and really need to prepare for this.
(32:13):
So one, if we're budgeting for the future,
we need to prepare for a reductionfor our separately payable drugs.
We also have to start to focuson our process because, typically,
as we reduce these drugs,it's dependent on a modifier,
and we really wantto be effective in our process
and how we're applying that modifierbecause of the reduction.
(32:36):
You know, from a survey perspective,
it'll be interesting to seewhat the response rate will be.
You know, if you think back to when the government previously tried
to kind of do a survey the,you know, public health emergency hit,
the response rate was low, and we kind ofdidn't move forward with that.
(33:00):
So, this is a big deal.
I think as we thinkabout reimbursement of future costs
going up, a rebate model,all these different things coming at us,
this is just one more thingthat we have be laser focused in on
to make sure that, you know,we're preparing for it.
And then ultimately also looking athow do we fill that gap,
(33:21):
whether it's, you know, new services,lowering costs, etc.,
to kind of fillthe gap for future reimbursement cuts?
Yeah, I know those arethose are all great points.
And, you know, to your point about lowresponse rate: in the OPPS proposed
rules, CMS does spend a lot of timediscussing that response rate.
And it almost seemslike they are anticipating
(33:45):
another low response rate,although I think most of that was due
to the, as you noted, public healthemergency, because in the spring of 2020,
I feel like we were all working 16 hoursa day doing something else at least.
And so like
they've talked about, well,you know, if you don't respond,
we may take this as an indicationthat your separately payable drug price
(34:08):
or costs are de minimis and we may startto look into more packaging.
Or, if you don't respondspecifically to the survey
so that we can geta statistically valid picture,
we may just assume again
that your drug prices for separatelypayable drugs are de minimis.
And so,however they want to sort of segment
the different hospitals that respond,we may just assume that for whatever
(34:32):
segment we assign you,you've got that, we’ll
put you in the lowest cost quartileor decile however they want to do it.
And you know that if they were to do thatstrategy
would obviously put downward pressure,I think, very artificially on
whatever the proposed discountwill ultimately end up being in the 2027
proposed OPPS rule,which is the timeline that they laid out.
(34:55):
You know, you also make an important pointabout starting to prepare now
for this cut, because they've telegraphedthat it is coming.
And I think you're spoton, you know, looking at new services,
looking for cost savings opportunities,but also understanding that
if they do this again,or when they do this again,
it will, like the last time, very likelybe done on a budget neutral manner.
(35:16):
So it's going to shift moneyaround the OPPS system
and create winners and losers.
But I do think that you can'tautomatically assume
that just because you won last time,you'll win again
because your service mix may have changed.
Something may have happened differently.
So I do think you have to plan on
taking a
haircut and preparingfor that haircut appropriately.
(35:37):
I think the last thing, you know,in addition to kind of the
proposed ruleregarding the 340B reimbursement
is the accelerationof the recoupment of the OPPS remedy.
I think there's not, you know, a lotwe can do at that recoupment.
It is going to,you know, go from a half percent to 2%.
(35:59):
And I think just assessing thisto kind of understand
what it will do for payments, it will be a change for non-drug services.
And, I think the biggest thingthat I'm hearing from clients is there's
all of these things coming at us,whether it's the change in reimbursement,
whether it's the recoupment of the priorOPPS remedy,
(36:21):
the IRA, rebates, etc.
I think as we think about all this,a lot of organizations are just
going through that process of saying,okay, run me the 10 what-if scenarios
that we can do our kind of diligenceto figure out which path
we should go, depending on which,you know, item moves forward.
(36:42):
And I think just focusing in on the dataand running those what-if scenarios,
whether you're working with
consulting groupor whether you're doing this internally,
I think it's just going to be really,really important to understand.
While we don't have a crystal ball,kind of creating your own crystal ball
so at least you know the outcomeif x, y or z hits.
Yeah.
No, I think that's exactly right.
(37:04):
You know, the other thing that I would addin this is,
as you look at, because of the recoupment,the conversion factor,
you know, the post-recoupment conversionfactor
nationallyis barely over the 2025 conversion factor.
So out of the gate before you startto apply any state-specific
or hospital-specific budgetneutrality adjustments,
(37:25):
you could end up with a negative
increase to the conversion factor,depending on who you are, where you are.
And that's going to be tough.
What advice would you give 340B
covered entitieswhen it comes to telling their story?
Obviously, there's been a lot of scrutinyover the program from legislators,
the manufacturers tendto aggressively assert that there is abuse
(37:52):
of the program based offof sort of cherry-picked anecdotes.
So how do you, how do
covered entities help
combat this sort of misinformationcampaign?
Yeah.
And this is really,really important to get right.
It's going to be crucial to highlight
how essentialthe 340B program is for expanding care
(38:16):
and providing top-quality servicesto vulnerable populations.
And kind of
going back to the initial regulation, andwhat were the goals of the 340B program?
It's going to be really importantto tell that story.
And, you know, when I think aboutmost of the covered entities I work with,
the 340B savings aren’tgoing straight to the bottom line.
You know,we hear that a lot where we're just,
(38:38):
you know, padding out the bottom linewith these savings.
But at the end of the day,a lot of the covered entities,
or most of the covered entities,are just trying to maintain slim margins,
and they're trying to avoid cutting services and cutting staff.
And really knowing and showing how you usethese savings is really important,
(38:58):
especially because they coveruncompensated care underpayments.
And we need to really have the abilityto show those things and say,
okay, yes, here's what our savings were,
but this is how we used our savings.
And when we think about 340B savings, it
truly enables covered entitiesto offer services like infusion,
(39:20):
cancer treatments locally,which might be otherwise unavailable.
You know, during this past year,
my mom received cancer treatmentat her local hospital
because that hospitalparticipates in 340B.
Otherwise she would have had to drive,
you know, an hour, at least, each way,and I think that's the story in a lot of
(39:43):
communities.
In rural communities, 340B providesthe means for those patients
to receive care at home.
And I think we have to effectively,you know, convey this impact
to the communities and legislators,kind of demonstrating that 340B savings
help expand those services and stretchthe scarce federal resources,
and I think telling our storyhas been pivotal
(40:06):
in the statesthat have passed state legislation.
It's because the covered entities
and the associations in those stateshave been able
to tell their story effectively, in order to make a difference.
I think that's right.
And I think you hit on something
important there with the examplethat you gave with your mother.
(40:27):
You know, it's a combination of having ...
being able to humanize the datathat you're sharing and the impact,
because no one should have to drivean hour after getting cancer treatment ...
either to or from.
Much less, and then you startto get into questions of, you know,
your mother obviously could afford,could have afforded it
if she needed it,but a lot of people can't,
(40:48):
and so they would end up having to foregotherapy.
Let's talk about the OneBig Beautiful Bill Act
and its changes to Medicaideligibility enrollment.
How could these changes impactorganizations’
abilityto either become or remain 340B eligible?
This is a concern that
(41:08):
a lot of organizationsacross the country are working
on, or at least thinking through,especially when many hospitals are already
struggling to qualify for 340Bbased on their shrinking DSH percentage.
There's been a lot of challengeswith maintaining Medicaid days,
increase total days,and declining SSI percentages.
(41:32):
So, when we think about increasingrequirements for Medicaid,
that this could ultimately increasethe likelihood that some covered entities
will lose the ability to participate iftheir Medicaid days continue to go down.
And as we add requirements,and I think we've seen some statistics
that the number of Medicaid patientswill decrease with new requirements.
(41:53):
So I think these eligibility changes
will have a significant impacton qualifying for 340B
and ultimately also lead to an increasein uncompensated care.
Which on the other side,this expands the need for 340B
and then I think, take the cost sideand the 340B side out of it.
(42:15):
It will also impact quality.
So, a lot of these patients, you know,to your point around, some patients have
the ability to, you know,pay for the care, get to their care.
But, quality will be impactedif more patients are uninsured
and don't have the abilityto seek out that care that they need.
(42:37):
Yeah.
No, I think that's right. And
honestly, so, right underneaththe rebate model in terms of things
related to 340B that keep me up at nightis the OBBA Medicaid cuts because,
while there aren't 340B provisionsin the bill, the Medicaid cuts are such
that it does have a pretty direct impacton 340B access.
(42:58):
And I think that's something that,as you think about those,
the Medicaid cuts rolling through first,in terms of what happens with provider
taxes and state-directed payments,and then also on the uncompensated care
side, that really, to your point,just heightens
the need for that discount.
So I think that's going to be a challengethat hospitals are going
(43:20):
to have to work through.
If you were one of thosehospitals on the bubble,
what would you do to focus on improvingidentification of Medicaid eligible days?
And what else can these hospitalsdo to help preserve their 340B status?
In addition to scrubbing data,you know, to improve Medicaid days,
(43:40):
and that's how I started out my career,I did a lot of those DSH reviews,
and organizations acrossthe country are doing those.
But in addition to that,
in order to improve their likelihoodto maintain 340B status,
hospitals are really focused in onwhat else can we do.
(44:01):
And in some of these areasinclude converting behavioral health
units from exempt unitsto being included in those Medicaid days,
working in the communityto, you know, treat
those Medicaid patients, whether it'swithin behavioral health or otherwise.
And also reducing their total days
(44:22):
by focusing in on long length-of-stays.
Just developing a strategic way
to reduce those length-of-staysaround sound processes.
And also by utilizing, you know,swing beds and skilled nursing facilities
or rehab facilitiesto ultimately give the patients
(44:43):
the care they need, but potentiallynot in that hospital setting.
And we've seen that since, really,the start of, you know,
the public health emergency where we havea lot of these longer length-of-stays and
typically those longer
length-of-staysaren't our Medicaid patients.
So when we think about the DSHcalculation, that's why
(45:06):
we continueto see that decline in DSH percentage,
which is leading to organizationsfalling out of the 340B program.
Given the margin challengesmany organizations are facing,
what strategieshave you seen covered entities use
to grow their programsand to capture additional savings?
(45:26):
So, organizations are doingeverything they can to compliantly
grow their 340B program.
So, they're focusing in on entity-owned
retailand specialty pharmacy capabilities.
This is an area that has not been a focusof the manufacturer restrictions.
This expansion also provides the abilityto provide
(45:48):
high-quality care,financial assistance to our patients.
And like I said,avoid some of the contract
dispensing feesas well as the restrictions.
Organizations are also focused inon reducing the impact of the manufacture
restrictions, whether it's throughalternative models, submitting claims
data or a combination of approaches to
(46:11):
compact these manufacture restrictions.
They're also really focusedon provider-based clinics for
the increased reimbursement, but I thinkmore importantly a 340B eligibility.
So historically, if we've had clinicsthat aren't 340B eligible,
how do we make those eligible
put them on a reimbursable lineso that they're eligible for 340B?
(46:32):
They're also focused in on other services.
And a lot of these servicesare provided by pharmacists
and really allowing pharmaciststo operate at the top of their license,
whether they're around,you know, more traditional pharmacy,
pharmacist-led services,whether it's around vaccines,
specialty care, medication, therapy management.
(46:56):
They're really going all-in in order
to not only expand 340B,
but also really focus in onhow do we continue to expand quality.
And then lastly, looking at referrals
and, you know, part of the 340Bregulation allows us to capture
closed loop referralsand doing that in a compliant way.
(47:20):
So, I think that's going to be really,really important, and it's part of kind
of all these different piecesaround medication therapy management
and making sure that we're expanding 340B
in a compliant way ishow do we capture everything
within the confinesof the patient definition.
I think that's great advice and sort ofgreat thoughts on terms of strategies.
(47:42):
You know, we've talked a little bit about
contract pharmacy restrictionsand you alluded to it a little bit.
And we've certainly seen a lot of states,particularly
this state legislative cycle, or year,
pass more laws to addressthe contract pharmacy restrictions.
And I anticipate we'll see more of that,you know, in the coming legislative year.
(48:06):
But for those states that haven't enactedlegislation,
what strategies can coveredentities use to address the restrictions?
In the states that haven’t enactedlegislation, I would start by, you know,
and when I say I, that meansall of the covered entities in the state,
by putting pressure on your legislatorsto pass state law.
In the states that have passed laws,these laws are effective,
(48:29):
they're defensive, and they're being followed by
most of the drug manufacturers.
I talked a little bitabout the Arkansas law,
but this is a law that went all the wayto the Supreme Court.
And ultimately the Supreme Courtcame back and said, yes, as a state,
you can build out these lawsto protect your covered entities.
Working with your hospital associations
(48:52):
and other trade organizations is critical.
When I think about the lawsthat have passed,
it's been due to kind of the diligenteffort of these associations to work
with legislators and push these laws tothe finish line, and really,
tell the story of what it
(49:13):
means when we don't have the contractpharmacies.
It's not an easy challenge,but I think I would kind of challenge
everyone that it's worth your timeand your effort.
For those states that have law,we're back to 2020
or pre-2020 340B savings.
And there's many groups that are spending
their time and money and effortsto give 340B a bad name.
(49:36):
And we've seen the headlines,we've seen all of those different things
that are happening.
So, in order to combat those,we must do everything within our power
in order to tell our storyand really combat
some of those anti-340B adsin order to protect the program.
You know, just want to pick upon two threads from what you said.
One, just want to tip the cap to Arkansas,because I do think that
(50:00):
that Supreme Court case was the thing thatsort of emboldened other states to try,
because my sense was a lot of other stateswere kind of sitting on the fence
waiting to see what would happen
with the legal challenge,and then once it cleared,
they felt more comfortable moving forward.
The other piece, and you're right, thereis, again, a lot of
money being spent by manufacturersto try to portray
(50:22):
the program in a certain light or whatthe program does.
And those messages thus far in
many states have not resonatedbecause of that persistent sort of effort
that the hospitals, the covered entities,their associations have made.
But I do think you need to kind ofput your back into it,
because these are well-funded groups.
(50:44):
So no, great points, great points.
And then whatother challenges or covered entities
facing related to the 340B program?
You know, the one thing that we seein pharmacy every day, and really across
the healthcare spectrum is (50:58):
organizations are doing more with less.
So, this is a huge challengefor organizations.
And when we think aboutif 340B is reduced or
if additional requirements are added,it's only gonna further this issue.
The manufacturer restrictionshave been devastating
for covered entitiesand they've required a lot of extra work.
(51:19):
Not only just to work to pass the statelaw, but to work through the restrictions,
meet the ever-changing requirements
and keeping up with those requirements.
There's also been a number of challengesfor organizations as disease states change
and drugsgo from branded to generic along with
(51:40):
some of the manufacturer financialassistance plans, including rebates.
And this has been a huge hitfor some of the federal grantees
across the country that have focused inon a particular disease state.
The drug goes from brand to generic,
and then some of the financial assistancegoes away.
(52:00):
340B covered entities are also operatingin an environment
where we don't have a clear futurefor cost and reimbursement.
And, you know, it's hard to plan whenwe don't have kind of that clear path.
So I think that's another areawhere, it's a huge challenge to say
we don't necessarily know what our costand our reimbursement will be,
(52:22):
I wasgoing to say in 2026, but I'm not sure
we know by the end of 2025what those things will look like.
So really focusing in on these challengesis taking up a lot of time.
It's also taking up a lot of efforts,but it's really, really important
to spend those time and efforts in orderto, kind of, face these challenges
that are continuing to growand continuing to move forward.
(52:48):
Thank you for sharing that.
If you could leave our listenerswith one takeaway
related to the 340B program,what would it be?
And I think it's back to one ofour initial kind of conversation points.
And it's knowing your story.
So knowing your story, telling your story,and advocating
for your organization and 340B program.
Resource demands are difficult.
(53:10):
I think finding trusted advisorsthat will help
you meet organizational goalsis really, really important.
And then I think also taking timeto sit back and celebrate
some of the good, you know,and not forgetting about all of the good
that your organizationdoes in your communities.
There are days that are difficult,margins are tight, but
(53:30):
each and every day health organizationsare making a difference.
And, you know, for me, I'm thankfulfor the access and the quality of the care
that is available to meand my family each and every day.
So I think it's really,really important to, yeah,
we have a lot of challenges rightnow, but really focusing in
on, and celebrating,some of the success as well.
(53:54):
Brian.
Thank you. I think that's fantastic.
And I like the way that we've sort ofbrought it full circle
back to the impact on the communityand making sure that we can help
individuals and communitiesachieve health.
Brian, thanks again for joining me todayand sharing your insights.
And thank you to all our listenersfor tuning in.
If you'd like to learn more about 340Bstrategies and policies,
(54:14):
we have links to some of ourrelated content in the show notes.
I hope you'll join me in two weeksfor the next episode
of Achieving Health.
You can follow
Achieving Healthon your favorite podcast platform or visit
forvismazars.us/AchievingHealthPodcastto learn more.
New episodes are released the firstand third Wednesday of each month.
(54:38):
Achieving Health is produced by ForvisMazars LLP, an independent member
of Forvis Mazars Global, a leading globalprofessional services network.
Ranked among the largest publicaccounting firms in the United States,
the firm's 7,000 dedicated team membersprovide an Unmatched Client Experience
through the delivery of assurance, taxand consulting services for clients
(55:00):
in all 50 states and internationallythrough the global network.
The information set forth in
this podcast contains
the analysis and conclusionsof the panelists based upon his, her,
or their research and analysis of industryinformation and legal authorities.
Such analysis and conclusionsshould not be deemed opinions
or conclusions by Forvis Mazarsor the panelists
(55:22):
as to any individual situationas situations are fact-specific.
The listener should performtheir own analysis and form
their own conclusionsregarding any specific situation.
Further, the panelists conclusionsmay be revised without notice,
with or without changes in industryinformation and legal authorities.
On today's episode of Achieving Health,
I've got the latest policy and legislativeupdates from Washington, D.C.
for the week of August 18th, 2025.
Then, I'll be joined by my colleagueBrian Bell,
principal in the HealthcareConsulting practice at Forvis Mazars.
We'll dive into the 340B drug pricing
program, including strategiesto get the most out of it,
(00:24):
as well as new policies and legislationthat could change how the program works.
Stay tuned.
This is AchievingHealth, a podcast from Forvis Mazars,
where we delve into the topicsthat matter most to healthcare
organizationsacross the continuum of care.
Our goal is to help younavigate the dynamic healthcare landscape
(00:44):
and achieve health at your organization.
Here's your host, Chad Mulvany.
Welcome to Achieving Health.
I'm Chad Mulvany, Director inthe Healthcare practice at Forvis Mazars.
Thank you for joining me today.
I'd like to start out
with a quick reminderabout our OBBBA Tuesdays webinar series,
which starts August 26th and continuesevery other Tuesday through November 4th.
(01:09):
We'll dive into the healthcareimplications of the One Big Beautiful Bill
Act and explore how hospitals and healthsystems can prepare
for Medicaid cuts and the expectedincrease in the uninsured.
We'll have a link in the show noteswhere you can register.
I hope you'll be able to join us forwhat will be an insightful series
of webinars that will help organizationsprepare for these changes.
(01:30):
We'll begin today with our WashingtonWatch segment, where I share
updates on the most recent actionsof federal policymakers
and their anticipated impacton healthcare providers and payers.
Today's WashingtonWatch reflects information as of noon
Eastern Time on Friday, August 15th, 2025.
My comments are based onwhat's being reported by D.C.
(01:51):
trade pressat the time of the conversation,
mixed with a lot of judgmentabout where things may go,
based on my experience in D.C.
So today's remarks reflect informationas of this moment and will change.
With Congress out for recess, the paymentrules released, and the OBBBA rulemaking
not yet cranked up, it's been, dareI say, a slow couple weeks in D.C.
(02:14):
However,there's still plenty to talk about.
As far as our agenda is concerned,I want to touch on the Fed
fiscal 2026 funding bill
and also the potential extendersthat many providers need to see extended.
And we'll really cover herewhat happens when Congress gets back from
summer vacation, as it will quickly needto turn its attention to passing either
(02:36):
appropriation bills, a continuingresolution, or some combination of both
to prevent a federal governmentshutdown on October 1st.
Along with the funding bill, providersneed to monitor D.C.
to make sure the extendersthey care about ride
along with whatever is passed to hopefullykeep the government open.
We'll also talk a little bitabout the OBBBA’s
(02:57):
Rural Health Transformation Program.
During an appearance on one of the recentSunday shows, CMS administrator Dr.
Oz mentionedthat the applications for the RHTP
will be available for statesto complete in early September.
While it remains to be seenwho the individual states
will make the funding available toand how they will distribute it,
(03:18):
now's probably a good time to providesome high-level thoughts
about how to approachthis funding opportunity.
We also, from
the health insurance side,have seen the administration announce
something related towards short-termlimited duration insurance.
We knew this was coming,but HHS and the Treasury
recently announcedthey were going to revisit the definition
(03:39):
of short-term limited duration insurance,which will likely lead to
bills individual patients,who do have the coverage,
didn't anticipate, and also an increasein uncompensated care.
And speaking of uncompensated care,
my friends at HFMA have an articleabout increasing uncompensated care.
Given changes in coverage, this isprobably just the beginning of this trend,
(04:02):
so providers should take steps nowso they can be prepared for it.
So with that, let's dive into our agenda.
For 2026 federal government funding,
with approximately six weeksto go until the new fiscal year begins,
the path to legislation fundingthe government is unclear.
The Senate, before recess,
passed three relativelynoncontroversial appropriation bills.
(04:24):
This package includedthe Senate's military construction VA,
agriculture, and legislative branch bills,
three of them comprising about $188billion of the more than $1.6 trillion
in discretionaryspending that needs to be approved
before the new fiscal yearbegins on October 1st.
But with the nine other annualspending bills left untouched
(04:46):
until at least Septemberand only two bills passed by the House,
with approximately four weeks leftin the fiscal year when Congress returns,
it is likely that a stopgap
funding measure will be necessaryto avoid a government shutdown.
However, this may beeasier said than done.
Obviously,we have the standard disagreements
between political partiesover spending levels, policy riders,
(05:08):
and other legislative priorities, i.e.,a large healthcare package.
But this year, it's a little uniquegiven that Congress, before recess,
passed a package of rescissions, slashingspending by
approximately $9 billionfor public broadcast and foreign aid.
And this was done in a party linevote in both the House and Senate in July.
(05:28):
This was funding that was includedin the 2025 continuing resolution,
and part of a bipartisan agreementthat was subsequently rescinded.
As a result of this, I would say thattrust between the parties is low.
Further, Punchbowl, a news outletthat covers D.C., reports that
the White House is considering submittinga second rescission package to the Hill,
(05:50):
which, if submitted, it believeswould increase the odds of a shutdown.
Look, the ability
to handicapa shutdown is well beyond my abilities.
However, important to remember thatif there is a shutdown, Medicare
funding is mandatory spending, so paymentsto providers will continue to flow.
However, the extenders,which generally have enjoyed
(06:11):
bipartisan support, may expire.
The ones to watch would include: the Medicare Dependent Hospital Program, (06:14):
undefined
the Medicare Low-Volume Adjustmentprogram, the COVID-era Telehealth waivers,
Medicare Hospital at Home program,and the Medicare Rural Ambulance add-on,
as well as a further delay of the ACAMedicaid DSH cuts.
You know,I think it's more likely than not that
(06:36):
the Medicare Dependent Hospital Program,Low-Volume Adjustment, the Telehealth
waivers, the Hospital at Home program, andthe Rural Ambulance add-on get extended
if there is a shutdown whenever there isa 2026 funding bill that is passed.
However, I am less certainabout a further delay of the first
$8 billion in ACA Medicaid DSH cutsthat are scheduled to take effect
(07:00):
on October 1st of 2025 given fiscalconservatives concern about the deficit.
So, I think that is a place in particularthat it will be
worth watching,and for those concerned about it to have
continuing conversationswith your congressional representatives.
Moving on
to the Rural Health TransformationProgram, OBBBA, as many are aware,
(07:23):
creates a Rural Stabilizationfund with $50 billion.
This is to be paid outas $10 billion annually
across Fed fiscal years 2026 through 2030.
States can submit a one-time
application for their share of the funds.
CMS Administrator Dr.
Oz has said the application will beavailable to states in early September.
(07:46):
In this application, stateswill need to outline
a detailed rural healthtransformation plan.
And just to clarify, the fundingis only available to the 50 states.
If you assume that all 50 states applyand are accepted,
the way the legislation is writtenor the statute is written,
half of the $10 billion inany given year is distributed
(08:07):
evenly,so each state would get a $100 million.
Again, assuming everybody applies,everybody gets accepted.
The other half is allocatedbased on a statutory formula
that includes the percentageof the state's population that is rural,
the percentage of rural providers,as defined in statute
in a state,relative to the national total, the quote
(08:28):
unquote “situation” of MedicaidDSH hospitals in the state,
and other factorsCMS thinks is appropriate.
From there, once a state is approvedand receives the funding, it's
going to be up to the states to decidehow to spend the money and who gets it.
The statute includes a list ofpotential uses, and I'm going to shorthand
many of these because reading long listsisn't the most compelling podcast.
(08:52):
At least that's what they tell me.
So the uses include (08:53):
prevent and manage chronic disease, increase provider
payments, adopt technologiesto improve care delivery,
recruit clinicians to rural communities,right-size rural delivery systems,
support access to substance use disordertreatment, encourage innovative
care models, and other uses
aligned with the program's goals,as determined by the CMS administrator.
(09:17):
A state has tochoose at least three of these activities.
So, there’ll kinda be a menu of optionsregardless of how the state applies.
While there has been a lot of interestin this fund from providers,
I would suggest, at the riskof stating the obvious, considering this
as a part of an OBBBAresponse slash sustainable strategy,
(09:38):
not the whole strategy, and I'd suggestthis for a couple of reasons.
First, while $50 billion over five yearsis certainly a significant investment
in rural healthcare, the Kaiser FamilyFoundation projects that rural areas
will lose $137 billion in federal Medicaidfunding over ten years.
That's approximately 37% of theestimated reduction in Medicaid funding.
(10:01):
So you know, what's coming backisn't enough to sort of
fill the hole of what's going out.
While the statute
defines rural healthcare providersfor purposes of the variable allocation,
it does not specify which providersare eligible for the funding,
nor how state should allocate it.
And even, again,want to just be clear, that
(10:21):
states aren't guaranteed by statutethe funding.
Further, the CMS administrator, Dr.
Oz, has reportedly toldseveral members of Congress
that non-rural areascould also obtain funds from the RHTP.
Therefore, it's possiblethat who receives funding may be broader
than the list of providers that's usedto allocate the fund and will be left,
(10:42):
or could be left, to the statesto determine, or future CMS guides.
And the other thing to remember is itmay include non-providers
or come with requirements to spend moneyon specific technologies or services,
in essence, acting as a pass-throughto a non-healthcare entity.
Further, while one of the permissibleuses of the funds is to provide
payments to providers, it seems unlikelythat a state would use the majority
(11:06):
of these dollars to specifically accountfor lost Medicaid revenue.
Reason why I say this is the fundingis time-limited, right?
The pool should be expended by 2030while Congress
may, or future Congressmay, provide more funding.
I'm not sure if I were a state
legislator, a state governor,or a health system executive
(11:28):
that I would count on Congressproviding that money.
So, if states provide revenue supportwithout requiring some type of significant
rural delivery system structuraltransformation, the state would need
to find additional funding in 2031if Congress doesn't re-up it.
So, it's going to put the statein a bit of an odd spot.
When you think about the fund,instead of kind of thinking about it
(11:49):
as a backfill for Medicaid revenue,given the parameters of the transformation
plan required in the applicationand the allowable uses of the funds,
it is likely that the states will requirethe dollars to be invested by recipients
in specific interventions
that improve outcomes or improvethe efficiency of care delivery.
And these are things
that will likely just need seed funding,but not ongoing support.
(12:13):
So, as a providerwho may be interested in eventually
applying to a state for these funds,I think the counsel
that I would offeris: revisit your strategic plans.
I would first look at the statute,what the statute
requires states to includein its Rural Health Transformation Plan.
I would look at the intended uses.
(12:33):
I would even think aboutwhat CMS administrator Dr.
Oz has said about his interests.
And then I'd look at your strategic planand sort of draw, you know,
whatever the center of that Venn diagramis probably the short
list of things where you might want tothrow your hat into the ring for funding
and could make a pretty strong argumentas to why you need those funds.
I would also sort of think about itin terms of an evolving process.
(12:57):
Obviously,there is a lot of uncertainty right now.
Some of this will become clarifiedwhen we see the application to states.
It will become even clearerwhen states submit applications.
And so, kind of start thinking about nowwhat your rationale is for the funding.
Refine that argument and refineany financial argument that you might have
as to what the ROI to the state would befor investments, as you better understand
(13:20):
what CMS wants the states to do with itand the state would like to do with it.
Theremay also be integration opportunities.
One required elementof a state's Rural Health Transformation
Plan focuses on strengthening localand regional strategic
partnerships between rural hospitalsand other healthcare providers.
So, there may be opportunitiesto use the funds
(13:40):
to support partnerships relatedto innovative care delivery models.
And this could include expandingvalue-based care.
States may choose to use RHTP funds
to implement or deploy value-basedcare models in rural areas
that will improve outcomesand reduce the total cost of care.
So, I think providersas you think about that
and that's somethingthat you're interested
in, you should start to evaluatepotential partners and risk-based models,
(14:03):
as well as the data and infrastructurenecessary to succeed
if a state choosesto use the funding for this purpose.
Moving on
to Short-Term Limited Duration Insurance.
HHS, the Treasury announced on August 7ththat they were planning rulemaking
to reconsider the definition of STLDIuntil the new rules are finalized.
However, the departments have saidthat they will not prioritize
(14:26):
enforcement actions against insurersthat do not fully comply
with the 2024 definition,including related notice requirements.
Regulationsexpanding the availability of Short-Term
Limited Duration Insurance were issuedduring the first Trump administration
as an alternative
to plans offered on the health insuranceexchanges and small group markets.
Subsequently, the Biden administrationlimited availability of these plans
(14:49):
and narrowed the definition of them.
So, expanding access to these plansmay leave
individuals underinsured and unawarethey're underinsured.
While these plans typicallymarket themselves as a cheaper alternative
to comprehensive coveragelike what is available on the exchange,
they typically also only paya fixed dollar amount of coverage
per day for hospitalizationthat's insufficient to cover the cost.
(15:12):
If these plans are expanded,hospitals in particular
will need to monitor their penetrationinto the markets they serve
and also adjust financial assistancepolicies and self-pay account
resolution strategies accordingly.
On a related note, I
mentioned earlier HFMA’sarticle about uncompensated care.
The article notes that full-year charitycare deductions for hospitals
(15:35):
with more than 200 beds surgedmore than 30% from 2022 to 2024.
And bad debtrose 18% during the same period.
The increase came even as hospitalswaited to write off medical debt longer.
The rise in bad debt and charitycare is in part fueled by higher rates
of denials and an uptick in ED visits fromuninsured and underinsured individuals.
(15:58):
And so, one of the things to think aboutis if you assume
the enhanced exchange subsidieswill expire at the end of the year,
and this is particularly truefor non-expansion states,
and the OBBBA work requirementsand more frequent eligibility
redterminationsgo into effect in 2027, the uninsured,
or the uncompensated care and bad debtnumbers will increase further.
(16:22):
The exchange subsidies have led to recordhigh enrollment in the ACA marketplaces.
Since 2020, the year before the enhancedsubsidies went into effect,
the number of people with ACAcoverage has grown by 88%
from 11.4 to 21.4 million.
All the growth in the marketplace,and over the last four years,
has really been a result of those enhancedadvance premium tax credits.
(16:47):
Subsidized enrollments upapproximately 106% from 9.6
million in 2020, to 19.7 million in 2024.
Further, the enhanced subsidies have cutpremium payments by an estimated 44%
for enrolleesreceiving premium tax credits.
If the subsidies expire,
most marketplace enrollees will seepremium payments increase substantially.
(17:09):
And already we're seeing from rate filingsthat plan premiums will increase
substantially because Congresshas essentially waited too long
to possibly take up legislationthat will extend those subsidies.
The changes to Medicaid and exchangeeligibility and OBBBA
are projected to increase the uninsuredby over 10 million individuals by 2034.
(17:30):
Most of the impact will occur through workrequirements for adults aged 19 to 64,
and increased eligibility
redetermination for individualsenrolled through the expansion pathway.
These two provisions aloneare expected to reduce Medicaid
spending by almost $400billion over 10 years.
Implications for providersis that they really need to start planning
(17:53):
and preparing for increased self-paycollections and uncompensated care now.
I think first, providers need to revisittheir financial assistance policies,
and this is particularly truefor tax-exempt organizations
to make sure they continue to meet
the needs of their communityin light of anticipated coverage losses.
Second, I think most organizationsare using presumptive
(18:14):
eligibility tools to determinewho is eligible for financial assistance.
But if you're not, it'sprobably a good time to start.
Third, in non-emergent situationswhere the patient is not eligible
for financial assistance,providers need to improve upfront cash
collections prior to service,revisit policies that define non-emergent
care, and determine
(18:34):
when it's appropriate to require fullor partial payment in advance of service,
and certainly startthinking about partnerships that can help
with the financing of servicesat the point of care.
Further, beyond revisitingfinancial assistance policies, tax-exempt
organizations should take other stepsto protect their status,
like review effortsto capture all community benefit expenses
on the 990 and amplify effortsto educate stakeholders
(18:57):
on the valuethat tax-exempt organizations provide.
This concludes today's Washington Watch.
Up next, I'll be joined by Brian Bellfor a conversation about 340B.
(19:17):
I'd like to welcome
our guest for today's episode, Brian Bell.
Brian is a principal in the HealthcareConsulting practice at Forvis Mazars.
He focuses on helping clientsidentify and implement
operational efficiencies, cost-reductionopportunities,
and revenue-generating strategiesrelated to the 340B program and pharmacy.
(19:38):
Brian, thanks for joining us today.
Hi Chad.
Yeah, I appreciate the opportunityto speak with you and the healthcare
community today, and as you said,I've dedicated my entire career
to the healthcare organizationsacross the country.
I've been doing thisfor more than 20 years.
And really have focused in on, kind of,a number of areas across the healthcare
(19:59):
spectrum from strategic reimbursement,revenue cycle, provider-based
clinics, margin improvement,and of course, 340B and pharmacy.
And truly my passionand I wake up every day
and enjoy the opportunity to workwith organizations across the country.
And thinking about kind of whatyou just summarized as your background,
it almost sounds like that, you know,the career path took you there, and it's
(20:22):
certainly an important program,particularly given the
financial challenges that covered entities
and other hospitalsand providers are facing.
Can you share a little bit more
about your backgroundas to how you came to the field?
Yeah, absolutely.
And you know, when I started, you know,going to college and really kind of
thinking through what I wanted to do,I really wanted to make a difference.
(20:44):
And I think I focused in on healthcarefrom day one in college and,
you know, worked at a hospitalthrough my internships and then
ultimately started in consulting,I was at a large international firm,
went to a very small regional firm andthen ultimately ended up at Forvis Mazars.
But I thinkwhen I was trying to figure out,
(21:06):
what do I want to be when I grow up,it was truly,
I wanted to try to help make a differenceand that's
really why I focused in on healthcare,kind of, for my entire career.
And then I think 340B and pharmacyis a really special place
because 340B means so muchto the covered entities
that have the abilityto participate in the program.
(21:30):
And really, without it, andI know we're going to spend a lot of time
talking about this, without itthere’d be a lot of, kind of,
differences in the accessand the quality of care that we receive,
you know, as patients on a day-to-daybasis across the country.
No, I think I think you're spot on.
And just a couple of thingsthat you said really resonated with me.
One, I think that wanting to makea difference has certainly been
(21:53):
one of the key themes that we've heardso far amongst all of our guests.
You know,
there are a lot of thingsthat all of us could be doing,
but we're all in healthcarebecause we want to improve the lives
of individuals in our communityto help them achieve optimal health.
And you know, when you thinkabout the 340B program in general,
you know, it's such a key programfor ensuring access
(22:14):
in the most disadvantagedof communities in our areas.
And that's why I think it'sjust such a vitally important program
to ensure that there is equitable accessto high-quality healthcare.
You know, Brian, there's
a lot going on in the 340B space,so what are the things
that you're monitoring, whether it'sregulatory, litigation, legislation,
(22:37):
that you think our listenersshould be following as it relates to 340B?
Yeah, absolutely.
And to say there's a lot of thingsis kind of an understatement.
So, we're closely monitoringa lot of things in this space.
The rebate model, or the pilot rebate
model, is top of mind for a lot of coveredentities around the country.
We're also monitoring futurefederal legislation
(23:00):
that could leadto significant reform of the program,
or keep the program closerto kind of how it operates today.
But we know that there'sa lot of debate in D.C.
over kind of what the 340B programshould look like in the future.
In addition
to some of that 340B federal legislation,we're also actively monitoring
(23:20):
some of the OPPS reimbursement changesas well as potential
site-neutrality changes.
These could be significant.
In addition to the federal side,also really keeping a close eye on
the state laws that are impactingcovered entities in a positive way.
There's also a number of reporting laws, and then a lot of litigation.
(23:41):
So, both at the federal and state level.
And then, kind of throw in the One
Big Beautiful Billand the potential impact on Medicaid.
These have really kept us busy.
Yeah.
Because, Imean, we're seeing a lot of organizations
having to watch their DPP closely justgiven the redeterminations post-COVID.
(24:02):
So, you start to throw in changesas a result of the work requirements.
The more frequent eligibility
determinations for the expansionpopulation starts
to put pressure on that, downwardpressure, again on that DPP, potentially.
You know,let's dive a little deeper into the couple
of the things that you mentioned.
And maybe we'll startwith the rebate model.
(24:22):
You know, we covered it in depthlast episode, but just for those
who didn't have a chance to listen,
to kind of get everybody up to speedso we're all on the same page.
On July 31st, HRSA released
its guidance around the pilotrebate model.
And it, you know, the good news is it's arelatively narrow pilot that's focused on
10 drugs that are subject to the Medicaredrug price negotiations for 2026.
(24:47):
And those are all Part D drugsso the impact is mostly going
to be felt through communityor contract pharmacies.
The model is structuredfor a minimum of one year.
And the important thing to note about thisis that HRSA’s notice states
that HRSA may allowfor an expansion of the rebate model
based on an assessment of the program.
(25:09):
And the key here for whatthe model is intended to address
is manufacturer concernsaround duplication of the 340B rebate
and the Inflation Reduction Actmaximum fair price.
In terms of timing,HRSA is going to approve applications
for a January 1st, 2026start date by October 15th.
(25:33):
And it is requiring that manufacturersapproved provide
at least 60 calendar days noticeto covered entities before implementation.
There are a handful of data elements.
It's a limited handful that coveredentities will be required to submit,
and in theory,
manufacturers will be required to payor deny the rebate within 10 days.
(25:56):
So, just kind of with that background,
what should covered entitiesbe doing to prepare for this?
To start, I was a little bit surpriserdwhen this came out
because it felt like HHS and HRSA had
really kind of stated that they weren'tsupportive of changing, kind of,
the program from a front-end cost savingsprogram to a back-end rebate model.
(26:18):
I think they received some pressureas far as kind of their approach to this.
And that's why this is a pilot.
But to your point, Chad,while I was a little surprised,
this could be a lot worse.
And so fortunately, the pilot’s limited
to the NDCs included in the IRA, and it'sa limited number of manufacturers.
It’d have truly been devastating
(26:39):
if it was all NDCs, all manufacturers,so it could have been worse.
I have a lot of concerns.
The current model,the way we think about the way our retail
pharmacies, contract pharmaciesreceive drugs and the way this
purchasing occurs, the current modeldoesn't really work for a rebate model
because of the way this purchasing set up.
(27:02):
For non-340B,
when we think about the contractpharmacies, they’re going to purchase
on that non-340B account,
and we need to figure outhow that's going to work in the future.
So this is going to be a big processchange
that requires a potential utilizationof an entirely different purchasing model.
The other side of this is resourcesand vendor management,
and these are really goingto be critical components
(27:23):
of how we're successful in a rebate modelworld.
So, covered entities are goingto really need to rely on their vendors
for good data to meet those reportingrequirements that you mentioned.
And then from a resource perspective,internally,
entities are going to need resources.
We're going to have to be ableto submit the claims.
And then there's going to have to be
(27:45):
a team that's built out to follow up.
So, similar to payer
denials, I'd expect that these rebatesare going to be difficult to claim.
And those denied rebatesare going to require follow up,
which is already going to hurta resource-strained entity even more. So,
there's a lot of work to be done.
And when we think about,you know, kind of receiving
(28:07):
which manufacturers are gonna moveforward, you know.
And in mid-October, we can't waituntil then to get our process set up.
So, we're gonna have to start nowto get it set up,
because recovery of that rebate, it'sgoing to be difficult.
We're going to have to focuson resources, technology, and process.
And like I said, we have to start today.
And I think lastly on the rebate model,while
(28:29):
I do expectthat there will be potential litigation,
I think that litigation will startafter the model's already implemented
because we've learned that from past caseswhere we're gonna have to show the harm.
We can't predict harmin order to file a case,
so I think organizations have a short road
ahead with a lot of work to doin order to get prepared for the model.
(28:52):
Yeah.
And, you know, Brian, you raisedan important point about litigation.
One (28:56):
yes, we'll have to wait to show the harm.
But two (28:59):
you know, one might say, okay, I'll wait.
But then you're also bettingthat a court will stay
the model while the case is heard.
And that's a pretty risky bet, I think.
And, you know, one of the things thatyou touched on in terms of implementing
and, you know, I like the analogythat you made from a process standpoint.
(29:21):
As you set this up,I think, kind of like the revenue cycle,
you have to start tracking certain
performance metricsaround this, by manufacturer,
to not only understand your performance,but because this is a pilot,
in theory, that HRSA is going to evaluatebefore it expands.
You need to be able to provide HRSA,
(29:42):
your state legislator,your federal legislators, folks at CMS,
other entities, a picture of howthis is impacting your organization.
And to me, some of the thingsthat I would want to track and set up
the infrastructure to automate to trackis by manufacturer timely processing.
So, how many of the manufacturers
are either paying a rebateor denying it within 10 days?
(30:04):
Denial rates, you know, your manufacturerdenial rate by claims count,
dollar value, percentage of both dollarsand claims, administrative expense,
how much you're spending on staffing,legal, IT and other support costs.
Because one of the thingsthat the notice says is that, you know,
covered entities should not bear costfor this model.
(30:25):
It's possiblethat they may have underappreciated
the people, process and technologythat you'll have to put into place
to succeed under thisand to capture those rebates.
You also mentioned some developmentsfrom the OPPS proposed rule.
What are your thoughts on the proposeddrug pricing survey
and what should providersknow as they respond?
(30:46):
Yeah, I think if you think backto the previous OPPS
reimbursement reductionfor 340B from 2018 through 2022,
the courts ruled in favor of the coveredentities because they stated
the federal government had not completedthat survey to determine the actual,
you know,kind of needs for the reimbursement cut.
So, I think this sets it up where we are
(31:09):
probably going to land on some cuts.
I think back to the OPPS remedy, though.
You know, it provided all of those dollarsback in the form of lump sum.
I think the one thing I wantedto kind of call out to the audience is
there are also a lot of organizationsfocused on the recoupment
of some of the Medicare Advantagereductions from ‘18 through ’22.
(31:29):
So, I think it becomes moreand more important to kind of hyper-focus
in on that as we kind of move into thisnext round of reductions,
but kind of fast forward to the currentproposed survey.
This is the first step in reductionor reimbursement for future 340B Part
B drugs.
When we look at the previous reduction,we were at ASP -22.5%.
(31:53):
So that was from ASP plus 6%.
So a 28.5% reduction.
And in
that ASPplus 6% is where we currently sit.
You know,I really would expect similar reductions
where we're probably going to bein that 28.5% plus range
and really need to prepare for this.
(32:13):
So one, if we're budgeting for the future,
we need to prepare for a reductionfor our separately payable drugs.
We also have to start to focuson our process because, typically,
as we reduce these drugs,it's dependent on a modifier,
and we really wantto be effective in our process
and how we're applying that modifierbecause of the reduction.
(32:36):
You know, from a survey perspective,
it'll be interesting to seewhat the response rate will be.
You know, if you think back to when the government previously tried
to kind of do a survey the,you know, public health emergency hit,
the response rate was low, and we kind ofdidn't move forward with that.
(33:00):
So, this is a big deal.
I think as we thinkabout reimbursement of future costs
going up, a rebate model,all these different things coming at us,
this is just one more thingthat we have be laser focused in on
to make sure that, you know,we're preparing for it.
And then ultimately also looking athow do we fill that gap,
(33:21):
whether it's, you know, new services,lowering costs, etc.,
to kind of fillthe gap for future reimbursement cuts?
Yeah, I know those arethose are all great points.
And, you know, to your point about lowresponse rate: in the OPPS proposed
rules, CMS does spend a lot of timediscussing that response rate.
And it almost seemslike they are anticipating
(33:45):
another low response rate,although I think most of that was due
to the, as you noted, public healthemergency, because in the spring of 2020,
I feel like we were all working 16 hoursa day doing something else at least.
And so like
they've talked about, well,you know, if you don't respond,
we may take this as an indicationthat your separately payable drug price
(34:08):
or costs are de minimis and we may startto look into more packaging.
Or, if you don't respondspecifically to the survey
so that we can geta statistically valid picture,
we may just assume again
that your drug prices for separatelypayable drugs are de minimis.
And so,however they want to sort of segment
the different hospitals that respond,we may just assume that for whatever
(34:32):
segment we assign you,you've got that, we’ll
put you in the lowest cost quartileor decile however they want to do it.
And you know that if they were to do thatstrategy
would obviously put downward pressure,I think, very artificially on
whatever the proposed discountwill ultimately end up being in the 2027
proposed OPPS rule,which is the timeline that they laid out.
(34:55):
You know, you also make an important pointabout starting to prepare now
for this cut, because they've telegraphedthat it is coming.
And I think you're spoton, you know, looking at new services,
looking for cost savings opportunities,but also understanding that
if they do this again,or when they do this again,
it will, like the last time, very likelybe done on a budget neutral manner.
(35:16):
So it's going to shift moneyaround the OPPS system
and create winners and losers.
But I do think that you can'tautomatically assume
that just because you won last time,you'll win again
because your service mix may have changed.
Something may have happened differently.
So I do think you have to plan on
taking a
haircut and preparingfor that haircut appropriately.
(35:37):
I think the last thing, you know,in addition to kind of the
proposed ruleregarding the 340B reimbursement
is the accelerationof the recoupment of the OPPS remedy.
I think there's not, you know, a lotwe can do at that recoupment.
It is going to,you know, go from a half percent to 2%.
(35:59):
And I think just assessing thisto kind of understand
what it will do for payments, it will be a change for non-drug services.
And, I think the biggest thingthat I'm hearing from clients is there's
all of these things coming at us,whether it's the change in reimbursement,
whether it's the recoupment of the priorOPPS remedy,
(36:21):
the IRA, rebates, etc.
I think as we think about all this,a lot of organizations are just
going through that process of saying,okay, run me the 10 what-if scenarios
that we can do our kind of diligenceto figure out which path
we should go, depending on which,you know, item moves forward.
(36:42):
And I think just focusing in on the dataand running those what-if scenarios,
whether you're working with
consulting groupor whether you're doing this internally,
I think it's just going to be really,really important to understand.
While we don't have a crystal ball,kind of creating your own crystal ball
so at least you know the outcomeif x, y or z hits.
Yeah.
No, I think that's exactly right.
(37:04):
You know, the other thing that I would addin this is,
as you look at, because of the recoupment,the conversion factor,
you know, the post-recoupment conversionfactor
nationallyis barely over the 2025 conversion factor.
So out of the gate before you startto apply any state-specific
or hospital-specific budgetneutrality adjustments,
(37:25):
you could end up with a negative
increase to the conversion factor,depending on who you are, where you are.
And that's going to be tough.
What advice would you give 340B
covered entitieswhen it comes to telling their story?
Obviously, there's been a lot of scrutinyover the program from legislators,
the manufacturers tendto aggressively assert that there is abuse
(37:52):
of the program based offof sort of cherry-picked anecdotes.
So how do you, how do
covered entities help
combat this sort of misinformationcampaign?
Yeah.
And this is really,really important to get right.
It's going to be crucial to highlight
how essentialthe 340B program is for expanding care
(38:16):
and providing top-quality servicesto vulnerable populations.
And kind of
going back to the initial regulation, andwhat were the goals of the 340B program?
It's going to be really importantto tell that story.
And, you know, when I think aboutmost of the covered entities I work with,
the 340B savings aren’tgoing straight to the bottom line.
You know,we hear that a lot where we're just,
(38:38):
you know, padding out the bottom linewith these savings.
But at the end of the day,a lot of the covered entities,
or most of the covered entities,are just trying to maintain slim margins,
and they're trying to avoid cutting services and cutting staff.
And really knowing and showing how you usethese savings is really important,
(38:58):
especially because they coveruncompensated care underpayments.
And we need to really have the abilityto show those things and say,
okay, yes, here's what our savings were,
but this is how we used our savings.
And when we think about 340B savings, it
truly enables covered entitiesto offer services like infusion,
(39:20):
cancer treatments locally,which might be otherwise unavailable.
You know, during this past year,
my mom received cancer treatmentat her local hospital
because that hospitalparticipates in 340B.
Otherwise she would have had to drive,
you know, an hour, at least, each way,and I think that's the story in a lot of
(39:43):
communities.
In rural communities, 340B providesthe means for those patients
to receive care at home.
And I think we have to effectively,you know, convey this impact
to the communities and legislators,kind of demonstrating that 340B savings
help expand those services and stretchthe scarce federal resources,
and I think telling our storyhas been pivotal
(40:06):
in the statesthat have passed state legislation.
It's because the covered entities
and the associations in those stateshave been able
to tell their story effectively, in order to make a difference.
I think that's right.
And I think you hit on something
important there with the examplethat you gave with your mother.
(40:27):
You know, it's a combination of having ...
being able to humanize the datathat you're sharing and the impact,
because no one should have to drivean hour after getting cancer treatment ...
either to or from.
Much less, and then you startto get into questions of, you know,
your mother obviously could afford,could have afforded it
if she needed it,but a lot of people can't,
(40:48):
and so they would end up having to foregotherapy.
Let's talk about the OneBig Beautiful Bill Act
and its changes to Medicaideligibility enrollment.
How could these changes impactorganizations’
abilityto either become or remain 340B eligible?
This is a concern that
(41:08):
a lot of organizationsacross the country are working
on, or at least thinking through,especially when many hospitals are already
struggling to qualify for 340Bbased on their shrinking DSH percentage.
There's been a lot of challengeswith maintaining Medicaid days,
increase total days,and declining SSI percentages.
(41:32):
So, when we think about increasingrequirements for Medicaid,
that this could ultimately increasethe likelihood that some covered entities
will lose the ability to participate iftheir Medicaid days continue to go down.
And as we add requirements,and I think we've seen some statistics
that the number of Medicaid patientswill decrease with new requirements.
(41:53):
So I think these eligibility changes
will have a significant impacton qualifying for 340B
and ultimately also lead to an increasein uncompensated care.
Which on the other side,this expands the need for 340B
and then I think, take the cost sideand the 340B side out of it.
(42:15):
It will also impact quality.
So, a lot of these patients, you know,to your point around, some patients have
the ability to, you know,pay for the care, get to their care.
But, quality will be impactedif more patients are uninsured
and don't have the abilityto seek out that care that they need.
(42:37):
Yeah.
No, I think that's right. And
honestly, so, right underneaththe rebate model in terms of things
related to 340B that keep me up at nightis the OBBA Medicaid cuts because,
while there aren't 340B provisionsin the bill, the Medicaid cuts are such
that it does have a pretty direct impacton 340B access.
(42:58):
And I think that's something that,as you think about those,
the Medicaid cuts rolling through first,in terms of what happens with provider
taxes and state-directed payments,and then also on the uncompensated care
side, that really, to your point,just heightens
the need for that discount.
So I think that's going to be a challengethat hospitals are going
(43:20):
to have to work through.
If you were one of thosehospitals on the bubble,
what would you do to focus on improvingidentification of Medicaid eligible days?
And what else can these hospitalsdo to help preserve their 340B status?
In addition to scrubbing data,you know, to improve Medicaid days,
(43:40):
and that's how I started out my career,I did a lot of those DSH reviews,
and organizations acrossthe country are doing those.
But in addition to that,
in order to improve their likelihoodto maintain 340B status,
hospitals are really focused in onwhat else can we do.
(44:01):
And in some of these areasinclude converting behavioral health
units from exempt unitsto being included in those Medicaid days,
working in the communityto, you know, treat
those Medicaid patients, whether it'swithin behavioral health or otherwise.
And also reducing their total days
(44:22):
by focusing in on long length-of-stays.
Just developing a strategic way
to reduce those length-of-staysaround sound processes.
And also by utilizing, you know,swing beds and skilled nursing facilities
or rehab facilitiesto ultimately give the patients
(44:43):
the care they need, but potentiallynot in that hospital setting.
And we've seen that since, really,the start of, you know,
the public health emergency where we havea lot of these longer length-of-stays and
typically those longer
length-of-staysaren't our Medicaid patients.
So when we think about the DSHcalculation, that's why
(45:06):
we continueto see that decline in DSH percentage,
which is leading to organizationsfalling out of the 340B program.
Given the margin challengesmany organizations are facing,
what strategieshave you seen covered entities use
to grow their programsand to capture additional savings?
(45:26):
So, organizations are doingeverything they can to compliantly
grow their 340B program.
So, they're focusing in on entity-owned
retailand specialty pharmacy capabilities.
This is an area that has not been a focusof the manufacturer restrictions.
This expansion also provides the abilityto provide
(45:48):
high-quality care,financial assistance to our patients.
And like I said,avoid some of the contract
dispensing feesas well as the restrictions.
Organizations are also focused inon reducing the impact of the manufacture
restrictions, whether it's throughalternative models, submitting claims
data or a combination of approaches to
(46:11):
compact these manufacture restrictions.
They're also really focusedon provider-based clinics for
the increased reimbursement, but I thinkmore importantly a 340B eligibility.
So historically, if we've had clinicsthat aren't 340B eligible,
how do we make those eligible
put them on a reimbursable lineso that they're eligible for 340B?
(46:32):
They're also focused in on other services.
And a lot of these servicesare provided by pharmacists
and really allowing pharmaciststo operate at the top of their license,
whether they're around,you know, more traditional pharmacy,
pharmacist-led services,whether it's around vaccines,
specialty care, medication, therapy management.
(46:56):
They're really going all-in in order
to not only expand 340B,
but also really focus in onhow do we continue to expand quality.
And then lastly, looking at referrals
and, you know, part of the 340Bregulation allows us to capture
closed loop referralsand doing that in a compliant way.
(47:20):
So, I think that's going to be really,really important, and it's part of kind
of all these different piecesaround medication therapy management
and making sure that we're expanding 340B
in a compliant way ishow do we capture everything
within the confinesof the patient definition.
I think that's great advice and sort ofgreat thoughts on terms of strategies.
(47:42):
You know, we've talked a little bit about
contract pharmacy restrictionsand you alluded to it a little bit.
And we've certainly seen a lot of states,particularly
this state legislative cycle, or year,
pass more laws to addressthe contract pharmacy restrictions.
And I anticipate we'll see more of that,you know, in the coming legislative year.
(48:06):
But for those states that haven't enactedlegislation,
what strategies can coveredentities use to address the restrictions?
In the states that haven’t enactedlegislation, I would start by, you know,
and when I say I, that meansall of the covered entities in the state,
by putting pressure on your legislatorsto pass state law.
In the states that have passed laws,these laws are effective,
(48:29):
they're defensive, and they're being followed by
most of the drug manufacturers.
I talked a little bitabout the Arkansas law,
but this is a law that went all the wayto the Supreme Court.
And ultimately the Supreme Courtcame back and said, yes, as a state,
you can build out these lawsto protect your covered entities.
Working with your hospital associations
(48:52):
and other trade organizations is critical.
When I think about the lawsthat have passed,
it's been due to kind of the diligenteffort of these associations to work
with legislators and push these laws tothe finish line, and really,
tell the story of what it
(49:13):
means when we don't have the contractpharmacies.
It's not an easy challenge,but I think I would kind of challenge
everyone that it's worth your timeand your effort.
For those states that have law,we're back to 2020
or pre-2020 340B savings.
And there's many groups that are spending
their time and money and effortsto give 340B a bad name.
(49:36):
And we've seen the headlines,we've seen all of those different things
that are happening.
So, in order to combat those,we must do everything within our power
in order to tell our storyand really combat
some of those anti-340B adsin order to protect the program.
You know, just want to pick upon two threads from what you said.
One, just want to tip the cap to Arkansas,because I do think that
(50:00):
that Supreme Court case was the thing thatsort of emboldened other states to try,
because my sense was a lot of other stateswere kind of sitting on the fence
waiting to see what would happen
with the legal challenge,and then once it cleared,
they felt more comfortable moving forward.
The other piece, and you're right, thereis, again, a lot of
money being spent by manufacturersto try to portray
(50:22):
the program in a certain light or whatthe program does.
And those messages thus far in
many states have not resonatedbecause of that persistent sort of effort
that the hospitals, the covered entities,their associations have made.
But I do think you need to kind ofput your back into it,
because these are well-funded groups.
(50:44):
So no, great points, great points.
And then whatother challenges or covered entities
facing related to the 340B program?
You know, the one thing that we seein pharmacy every day, and really across
the healthcare spectrum is (50:58):
organizations are doing more with less.
So, this is a huge challengefor organizations.
And when we think aboutif 340B is reduced or
if additional requirements are added,it's only gonna further this issue.
The manufacturer restrictionshave been devastating
for covered entitiesand they've required a lot of extra work.
(51:19):
Not only just to work to pass the statelaw, but to work through the restrictions,
meet the ever-changing requirements
and keeping up with those requirements.
There's also been a number of challengesfor organizations as disease states change
and drugsgo from branded to generic along with
(51:40):
some of the manufacturer financialassistance plans, including rebates.
And this has been a huge hitfor some of the federal grantees
across the country that have focused inon a particular disease state.
The drug goes from brand to generic,
and then some of the financial assistancegoes away.
(52:00):
340B covered entities are also operatingin an environment
where we don't have a clear futurefor cost and reimbursement.
And, you know, it's hard to plan whenwe don't have kind of that clear path.
So I think that's another areawhere, it's a huge challenge to say
we don't necessarily know what our costand our reimbursement will be,
(52:22):
I wasgoing to say in 2026, but I'm not sure
we know by the end of 2025what those things will look like.
So really focusing in on these challengesis taking up a lot of time.
It's also taking up a lot of efforts,but it's really, really important
to spend those time and efforts in orderto, kind of, face these challenges
that are continuing to growand continuing to move forward.
(52:48):
Thank you for sharing that.
If you could leave our listenerswith one takeaway
related to the 340B program,what would it be?
And I think it's back to one ofour initial kind of conversation points.
And it's knowing your story.
So knowing your story, telling your story,and advocating
for your organization and 340B program.
Resource demands are difficult.
(53:10):
I think finding trusted advisorsthat will help
you meet organizational goalsis really, really important.
And then I think also taking timeto sit back and celebrate
some of the good, you know,and not forgetting about all of the good
that your organizationdoes in your communities.
There are days that are difficult,margins are tight, but
(53:30):
each and every day health organizationsare making a difference.
And, you know, for me, I'm thankfulfor the access and the quality of the care
that is available to meand my family each and every day.
So I think it's really,really important to, yeah,
we have a lot of challenges rightnow, but really focusing in
on, and celebrating,some of the success as well.
(53:54):
Brian.
Thank you. I think that's fantastic.
And I like the way that we've sort ofbrought it full circle
back to the impact on the communityand making sure that we can help
individuals and communitiesachieve health.
Brian, thanks again for joining me todayand sharing your insights.
And thank you to all our listenersfor tuning in.
If you'd like to learn more about 340Bstrategies and policies,
(54:14):
we have links to some of ourrelated content in the show notes.
I hope you'll join me in two weeksfor the next episode
of Achieving Health.
You can follow
Achieving Healthon your favorite podcast platform or visit
forvismazars.us/AchievingHealthPodcastto learn more.
New episodes are released the firstand third Wednesday of each month.
(54:38):
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of Forvis Mazars Global, a leading globalprofessional services network.
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(55:00):
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The information set forth in
this podcast contains
the analysis and conclusionsof the panelists based upon his, her,
or their research and analysis of industryinformation and legal authorities.
Such analysis and conclusionsshould not be deemed opinions
or conclusions by Forvis Mazarsor the panelists
(55:22):
as to any individual situationas situations are fact-specific.
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