Policy Update 1/8/21

By Cassidy Heit posted 01-11-2021 23:30

  

Health Centers Receive Mandatory and Discretionary Funding in Consolidated Appropriations Act

Community health centers received three years of mandatory funding through FY2023 at $4 billion per year and approximately $1.7 billion per year in discretionary funding through FY2023. The discretionary funding amount represents a $57 million annual increase from FY2020.

Teaching Health Centers with graduate medical education (GME) programs also received appropriations of $126.5 million per year for three years, and National Health Service Corps (NHSC) was funded at $310 million per year for three years.
 

HHS General Counsel Issues Opinion Stating 340B Discounts Apply to Contract Pharmacies

While advisory opinions do not carry the force of law, they convey official agency opinions. On December 30, U.S. Health and Human Services Department (HHS) Office of General Counsel Robert Charrow issued an opinion, writing that the 340B statute’s “core requirement” is that “manufacturers must ‘offer’ covered outpatient drugs at or below the ceiling price for ‘purchase by’ covered entities.”

“This fundamental requirement is not qualified, restricted, or dependent on how the covered entity chooses to distribute the covered outpatient drugs,” he wrote. “All that is required is that the discounted drug be ‘purchased by’ a covered entity. In this setting, neither the agency nor a private actor is authorized by section 340B to add requirements to the statute.” He continued, “No amount of linguistic gymnastics can ordain otherwise,” and where the drugs are delivered “is irrelevant.”

Despite the HHS opinion, several drug manufacturers including Eli Lilly and Sanofi appear unwilling to change their current policies. An Eli Lilly representative told Modern Healthcare this week, "We've reviewed the statement from HHS and we disagree with their conclusion. We continue to believe our 340B distribution program complies with all applicable laws and regulations, and we will continue to advocate for fixes to 340B that will help people access affordable medicines instead padding the bottom lines of hospitals and contract pharmacies that pocket discounts for themselves." Read more.


Insulin and EpiPen Pricing Rule Implementation May Be Delayed

The final regulation on insulin and EpiPen pricing for community health centers was published on December 23, 2020, and is scheduled to go into effect on Friday January 22, 2021, two days after Joe Biden is sworn in.  The President-Elect’s transition office has publicly announced that he plans to issue a memo on the afternoon of January 20 blocking “midnight regulations” including regulations that the Trump Administration finalized but that have yet to go into effect. That delay—which will probably be at least 60 days—would give HRSA time to officially rescind the regulation.
 

Second Round of PPP Loans Available

A second round of loans for first-time and second-time applicants have been authorized under the Paycheck Protection Program (PPP), which offers low-interest, forgivable loans guaranteed by the Small Business Administration (SBA) for small businesses and other entities to keep workers on the payroll during the COVID-19 crisis.

The PPP was open to businesses and 501(c)(3) nonprofits with 500 or fewer employees, as well as self-employed workers and some companies that are part of food or hotel chains, among others. Eligibility requirements have been modified in this COVID-19 relief package for second-time loan applicants. To qualify for a second loan, entities would have to:
  • Employ 300 or fewer workers, instead of the current 500-employee threshold.
  • Demonstrate that they had at least a 25% reduction in gross revenue during a quarter in 2020 compared with the same period in 2019, with some exceptions.
  • Exhaust their first loan before receiving a second one

Read new guidance from SBA.
 

Insulin and EpiPen Pricing Rule Implementation May Be Delayed

The final regulation on insulin and EpiPen pricing for community health centers was published on December 23, 2020, and is scheduled to go into effect on Friday January 22, 2021, two days after Joe Biden is sworn in.  The President-Elect’s transition office has publicly announced that he plans to issue a memo on the afternoon of January 20 blocking “midnight regulations” including regulations that the Trump Administration finalized but that have yet to go into effect. That delaywhich will probably be at least 60 days—would give HRSA time to officially rescind the regulation.
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