Proposed Rule on Handling 340B Disputes Moves Forward

Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.

By Bronwyn Mixter

June 16 — A proposal on handling disputes arising from a safety-net drug discount program is moving closer to public release.

The White House Office of Management and Budget started its review June 15 of the proposed rule (RIN: 0906-AA90 ) under the 340B discount program, according to the OMB's website. The proposal from the Department of Health and Human Services, which administers the program, is required under the Affordable Care Act.

The HHS proposal would establish a binding administrative dispute resolution process for claims raised by covered entities such as hospitals that say they were overcharged for drugs under the 340B program. This process also would be available to drug manufacturers, according to the OMB's explanation of the rule. The 340B program requires drug manufacturers to provide outpatient drugs to eligible health-care organizations at significantly reduced prices.

Bloomberg Intelligence analyst Brian Rye told Bloomberg BNA in a June 16 e-mail that “both drugmakers and eligible 340B providers have expressed a number of concerns about the program's oversight, resulting in a heightened importance for regulations governing the dispute resolution process.”

Delay of Rule

The proposed rule has been delayed several times. The HHS spring regulatory agenda said the proposal would be published in September. However, the fall 2015 regulatory agenda said it would be published in May. And in the spring 2015 regulatory agenda, it was scheduled to be published in December 2015.

Randy Barrett, vice president of communications at 340B Health, a group that represents health-care providers receiving discounts in the program, told Bloomberg BNA in a June 16 e-mail that “we are very pleased to see movement on this process.”

Kyle Vasquez, an attorney with Polsinelli in Chicago, told Bloomberg BNA that, at a time when audit and repayment activity continues to rise in the 340B program, it's “important that stakeholders have a formal dispute resolution process available, but one that balances the interests of both covered entities and [drug] manufacturers.”

He noted that the HHS initially opened the issue up for comments in an advance notice of proposed rulemaking in 2010, as opposed to starting the process with a proposed rule, “so it may be some time before stakeholders see a final rule on this particular issue.”

“Stakeholders should be prepared to issue comments to the proposed rule in the coming months pending OMB’s official signoff on the draft proposed rule,” Vasquez added.

To contact the reporter on this story: Bronwyn Mixter in Washington at

To contact the editor responsible for this story: Brian Broderick at

For More Information

The OMB's posting on the rule is at

More information on the 340B program is at

Request Health Care on Bloomberg Law