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Hospitals Are Not the Only 340B Providers Under Scrutiny

Long-time 340B observers were surprised to see that Sen. Bill Cassidy (R-La.) has expanded his 340B investigation into community health centers. In September, Cassidy, a long-time critic of the program, launched an inquiry into hospital use of the 340B program. Cassidy cited front-page reports in the New York Times and Wall Street Journal that raised questions about whether hospitals were good stewards of the program.

Extensive Document Request

Last month, the senator, who serves as the ranking Republican member of the Senate Health, Education, Labor and Pensions (HELP) Committee, which has jurisdiction over the 340B program, announced he wrote the CEOs of two of the largest U.S. health centers requesting answers to a series of questions about their use of the 340B program. The senator also requested a number of documents including “unredacted copies of pharmacy service agreements with contract pharmacies….and TPA agreements.” In the letter, Cassidy cited a 2018 Government Accountability Office report and wrote it, “found that nearly half of the covered entities it reviewed failed to extend discounts to patients accessing medications at their contract pharmacies.” Cassidy also raised concerns about the government’s 2010 decision to allow use of multiple contract pharmacies, which the senator said allowed “covered entities to use complex arrangements that included multiple pharmacies.”

Unlike the hospital inquiry, the investigation into the health centers was not initiated after high profile news investigations. Cassidy said in his letters to the two health centers that he chose them since they are among the 10 highest paid “CHCs in the nation.” One of the two health centers, Yakima Valley Farm Workers Clinic in Washington state, is “ranked as having the highest compensation among all CHCs in the nation,” Cassidy wrote. Read more >

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