HRSA Withdraws 340B Program “Mega Guidance” from OMB Review

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On January 30, 2017, the Health Resources and Services Administration (HRSA) withdrew its 340B Program Omnibus Guidelines (Guidelines) from regulatory review by the Office of Management and Budget (OMB).  HRSA published the proposed version of the Guidelines in August 2015, setting forth numerous broad proposals, as summarized in our 8/31/2015 issue of Health Headlines.  Among other things, HRSA had proposed to revise the definition of eligible patient.  Neither HRSA nor HHS has commented on the withdrawal of the Guidelines.

The Guidelines (also referred to as “mega guidance” and “omnibus guidance”) are a product of years of agency deliberations.  Initially announced on HRSA’s website as a proposed rule scheduled for publication in June 2014, the Guidelines were delayed, and then re-drafted as guidance rather than rulemaking.  The reason for the “downgrade” was HRSA’s judicial setback in trying to assert plenary authority to promulgate rules implementing the 340B Program (i.e., 42 U.S.C. § 256b).  As reported in the 6/16/2014 issue of Health Headlines, in May 2014, the U.S. District Court for the District of Columbia ruled that HRSA is authorized to promulgate rulemaking pertaining to the 340B Program only with respect to the three areas for which the statute expressly authorizes HHS to promulgate rulemaking: (1) the administrative resolution process, (2) the methodology for calculating ceiling prices, and (3) the imposition of civil monetary penalties.  Yet, according to HRSA’s statements on its website, HRSA’s planned “mega rule” (which was not yet published) addressed much broader issues:  the definition of an eligible patient, compliance requirements for contract pharmacy arrangements, hospital eligibility criteria, and eligibility of off-site facilities.  As reported in the 11/17/2014 issue of Health Headlines, following the D.C. District Court’s ruling, HRSA began reworking the “mega rule” into a guidance document.

HRSA published the proposed Guidelines in August 2015.  The proposed Guidelines covered, among other issues, all of the issues that were planned to be covered by the “mega rule”:  the definition of an eligible patient, contract pharmacy arrangements, hospital eligibility criteria, and eligibility of off-site facilities.  Among the proposals, the proposed revision to the definition of an eligible patient drew the most criticism from health care providers.  (See e.g., comment by the American Hospital Association to the proposed Guidelines.)   While the reason for the withdrawal of the Guidelines is not clear at this time, it may have been attributable to the change in White House Administrations.  As it stands, the proposed Guidelines remain non-finalized agency guidance.

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