Insights: Article

340B Mega-Guidance is Pulled: What This Means to You

By Renee Gravalin

February 10, 2017

On Jan. 30, 2017, the proposed 340B Mega-Guidance was pulled from the Office of Management and Budget (OMB) where it was awaiting final approval before being published. The proposed Mega-Guidance was released on Aug. 28, 2015, and had gone through the comment process, been updated, and was awaiting final approval, which was expected in December 2016.

Based on executive orders that had been issued by President Trump, pulling the Mega-Guidance was not entirely unexpected. It's still uncertain what the pulling of the guidance actually means. Another executive order provides that for each regulation put into place, two need to be removed. This may have an impact as well, as OMB does not have many regulations it can remove.

As uncertainty casts its shadow on the 340B Mega-Guidance, we will be carefully watching any activity related to it and the 340B program.

Another gray area is the Republicans' goal to repeal the Affordable Care Act (ACA). Certain provisions within the ACA affect the 340B program. These include:

  • Expanding the 340B program to include rural and cancer hospitals.
  • Answering questions regarding children's hospital eligibility.
  • Increasing the Medicaid rebate percentage, which in turn, increased the 340B discount.
  • Creating the 340B ceiling price website.

It's important to note that a true repeal is very unlikely, as 60 percent of the Senate will need to vote for the repeal of the ACA. It is more likely that certain provisions of the ACA would be repealed via the budget reconciliation process, requiring only a 50 percent vote of the Senate to pass. With the current balance of power favoring the Republicans, it seems that portions of the ACA will likely be changed. In addition, the general consensus is that there will need to be a replacement plan to any provisions of the ACA that are repealed, which is going to take time to sort out.

You may be wondering if repealing certain provisions within the ACA will impact the 340B Program items contained within the ACA. In order to repeal provisions under the budget reconciliation process, the provisions need to impact revenues or spending. It is believed that that the provisions of the ACA related to the 340B Program are "merely incidental" to the budget reconciliation process, so they shouldn't be subject to repeal under the budget reconciliation process. That said, all of this will need to go through the Senate hearing process. If the 340B Program provisions of the ACA are included within the budget reconciliation process, it will be up to the Senate parliamentarian to determine if that is appropriate.

At this point, we are in wait-and-see mode with the 340B Program, the Mega-Guidance and the ACA. Policy makers in Washington D.C. say the 340B Program has somewhat taken a back-burner with the various executive orders and changes the current administration wants to make. However, changes to the 340B Program could be added to legislation as a sort of bargaining chip so any impacts remain to be seen.

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