The Government Accountability Office found major oversight problems with a controversial drug discount program for safety net hospitals.
The federal watchdog report requested by the House Energy and Commerce Committee comes amid increasing scrutiny of the program that mandates drug makers to provide discounts to safety net hospitals that provide care to low-income patients. The pharmaceutical industry has argued that the discount program, goes by the name 340B, has run rampant due to rapid expansion, while hospital groups charge that efforts to cut it will imperil care for low-income patients.
The GAO found several problems with how the Department of Health and Human Services oversees contract pharmacies under the program.
“Specifically, manufacturers cannot be required to provide both the 340B discount and a rebate through the Medicaid Drug Rebate Program,” GAO said in its report. “However, [HHS’ Health Resources and Services Administration] only assesses the potential for duplicate discounts in Medicaid fee-for-service and not Medicaid managed care.”
GAO recommends that HRSA must improve its audits and give guidance to covered hospitals and facilities on how to avoid duplicate discounts, among other recommendations.
The House committee has done its own probe of how HHS oversees the program. The panel found that “oversight has not kept pace with program growth — lacking rigorous oversight, meaningful reporting requirements and reliable data,” according to Reps. Greg Walden, R-Ore., and Michael Burgess, R-Texas. Walden chairs the main committee and Burgess chairs the committee’s health subcommittee.
HRSA has estimated that covered facilities in the program saved about $6 billion on drug purchases in 2015 by participating in the program.
GAO also examined pharmacies that contract with hospitals that get the discounts. Out of the more than 12,000 hospitals and facilities in the discount program, approximately one-third contract with an outside pharmacy to provide prescriptions covered under the program.
GAO looked at 55 covered hospitals and found that 30 of them provided low-income or uninsured patients discounts on drugs through some or all of their contracted pharmacies. But 25 of the hospitals or facilities do not report if low-income or uninsured patients can get discounted drugs at the contracted pharmacy.
