340B Program Changes and What to Expect in 2025
340B Program covered entities must stay up to date with the shifting rules and requirements, as well as be aware of what to expect long-term from the program, to effectively plan for the future.
In January 2024, HRSA created a new webpage where all resources related to compliance can be found including the “HRSA Patient Definition Guidelines,” HRSA resources for covered entities, and 340B prime vendor program resources. The webpage also includes a link to HRSA audits of covered entities, which can be used as a tool to help an entity identify common findings and any sanction related to those findings. Those interested on what to expect if their entity had a HRSA audit and there are findings should visit here.
To keep one’s knowledge of the 340B program up-to-date and to ensure they are properly planning for their organization’s future, below is a brief summary of some information to be aware of in 2025.
Updated Modifier Announcement
The Inflation Reduction Act of 2022 created the Part B inflation rebate for manufactures. To establish the program, covered entities were required to begin using modifiers to identify eligible drugs. The modifiers “JG” and “TB” were to be used for drugs or biologicals acquired with 340B drug pricing program discount. The Centers for Medicare & Medicaid Services (CMS) issued new guidance relating to which modifier entities should use for their claims. Effective January 1, 2025, all covered entities must report the “TB” modifier for all claims. Given the effect this will have on billings, CMS is encouraging entities to begin using the “TB” modifier before January 1, 2025.
SUSTAIN 340B Act
The Supporting Underserved and Strengthening Transparency, Accountability, and Integrity New and for the Future of 340B ACT (SUSTAIN 340B Act) is a 51-page bill that seeks to provide clarity about Congress’s intentions toward the program and ensure the program’s endurance long into the future. In February 2024, a U.S. Senate bipartisan group released a nine page “Discussion Draft Explanatory Statement and Supplemental RFI” to highlight the most relevant issues. Section 4 of the bill relates to the definition of a patient. Recent litigation has questioned HRSA’s authority to enforce their definition.
In an effort to provide clarity and integrity, this bill serves to formally define what a patient is. Section 5 of the bill seeks to clarify Child Sites and put rules in place to ensure their integrity. One of the purposed requirements is, “In order to ensure the clinical services of a child site and covered entity are fully integrated, the child site’s providers and medical staff must meet certain requirements in line with the parent site…” Section 6 addresses transparency by purposing among other things, “beginning one year after enactment, covered entities will be required to report specific information about their use of the 340B program for the preceding year as an addendum to their Medicare cost report.” Section 8 will help prevent duplicate discounts. Proposed requirements include, “covered entities must participate in the data exchange with the third-party clearinghouse, including available data from contract pharmacies,” and “covered entities will also be required to repay manufacturers of identified duplicate discounts for 340B drugs.” This discussion draft also contains questions that the bipartisan group seeks to understand before finalizing the bill. This bill is expected to go before Congress during the 2025 legislative session.
In conclusion, the above information is a good starting point to help an organization begin planning for the upcoming year. While the SUSTAIN 340B Act is still in its early stages, it presents the possibility for major changes to the program. Please visit the HRSA website for the latest information and updates.
If you have questions about the information outlined above, McKonly & Asbury’s experienced professionals are here to help. Learn more about our Healthcare practice by visiting our Healthcare industry page or by contacting the director of our Healthcare practice, Janice Snyder, Partner.
