340B hospitals must report how they spend drug savings

The text as introduced · 780 words

90R1225 JG-D

By: Oliverson
H.B. No. 703

A BILL TO BE ENTITLED

AN ACT

relating to the 340B program and reporting requirements for the

program; authorizing an administrative penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subtitle A, Title 6, Health and Safety Code, is

amended by adding Chapter 441A to read as follows:

CHAPTER 441A. 340B PROGRAM TRANSPARENCY AND ACCOUNTABILITY

Sec. 441A.001. DEFINITIONS. In this chapter:

(1) "340B covered entity" means an entity described by

42 U.S.C. Section 256b(a)(4)(L), (M), (N), or (O) that is

authorized to participate in the 340B program and has a service

address in this state. This term includes any off-site outpatient

facility affiliated with the entity.

(2) "340B program" means the federal drug discount

program established by Section 340B, Public Health Service Act (42

U.S.C. Section 256b).

(3) "Charity care" means the unreimbursed cost to a

hospital of:

(A) providing, funding, or otherwise financially

supporting inpatient or outpatient health care services for a

patient classified by the hospital as financially indigent or

medically indigent; or

(B) providing, funding, or otherwise financially

supporting health care services provided to financially indigent

patients through other nonprofit or public outpatient clinics,

hospitals, or health care organizations.

(4) "Financially indigent" means an uninsured or

underinsured patient who is accepted for care with no patient

obligation or a discounted patient obligation to pay for the

services rendered based on the hospital's financial criteria and

procedure used to determine whether the patient is eligible for

charity care. The criteria and procedure must include income

levels and means testing indexed to the federal poverty guidelines.

(5) "Medically indigent" has the meaning assigned by

Section 311.031.

Sec. 441A.002. 340B PROGRAM REPORTING REQUIREMENTS. (a)

Not later than April 1 of each year, a 340B covered entity shall

provide to the department a written report of the following

information and transactions:

(1) a description of the entity's participation in or

participation on behalf of a 340B covered entity in the 340B program

for the preceding calendar year;

(2) the entity's:

(A) name;

(B) service address;

(C) 340B program identification number; and

(D) designated entity type under 42 U.S.C.

Section 256b(a)(4);

(3) the total acquisition cost of all prescription

drugs the entity:

(A) obtained under the 340B program; and

(B) administered or dispensed to a patient;

(4) the total amount of payments the entity received

for all prescription drugs the entity:

(A) obtained under the 340B program; and

(B) administered or dispensed to a patient;

(5) the total amount of the entity's payments to

pharmacies under contract for the purpose of dispensing

prescription drugs obtained under the 340B program;

(6) the number of claims for prescription drugs

described by Subdivision (4) the entity submitted;

(7) a description of the entity's use of any savings

obtained as a result of participating in the 340B program,

including the amount of savings used for providing:

(A) charity care;

(B) community benefits; or

(C) any unreimbursed or unsubsidized health care

under a similar program;

(8) the total amount of the entity's payments to any

other entity that is not:

(A) a 340B covered entity; or

(B) a contracted pharmacy described by

Subdivision (5);

(9) the entity's total cost to administer the 340B

program;

(10) the total number of prescription drugs the entity

dispensed or administered to patients for which a payment was

reported under Subdivision (4);

(11) the percentage of the entity's total claims for

prescription drugs obtained under the 340B program;

(12) the number and percentage of low-income patients

the entity served who received care under a sliding fee scale for a

prescription drug dispensed or administered under the 340B program;

(13) the entity's total operating costs;

(14) the entity's total costs for providing charity

care; and

(15) a copy of the entity's financial assistance

policy for the reporting year.

(b) To the extent possible, a 340B covered entity must

report information described by Subsections (a)(4)-(6) according

to the payer type, including the following categories:

(1) commercial;

(2) Medicaid;

(3) Medicare; or

(4) uninsured.

(c) The information submitted under Subsection (a) is

confidential and is not considered public information under Chapter

552, Government Code.

(d) Not later than November 15 of each year, the department

shall prepare a report aggregating information submitted under

Subsection (a). The department must:

(1) submit an electronic copy of the report to each

member of the legislature; and

(2) post the report on the department's Internet

website.

Sec. 441A.003. ADMINISTRATIVE PENALTY. The department

shall impose an administrative penalty in an amount of $1,000

against a 340B covered entity that violates this chapter or a rule

adopted under this chapter.

SECTION 2. This Act takes effect September 1, 2027.