Proposed Pharmacy Carve-out Policy Dropped by MDHHS

Posted on February 21, 2020

A proposed policy that would have had a significant impact on the 340B prescription drug program for hospitals in Michigan has been dropped by the Michigan Department of Health and Human Services (MDHHS).

The proposal would have carved all outpatient prescription drugs out of Medicaid managed care coverage, which would have prevented hospitals from using 340B pricing for outpatient prescription drugs. Instead, Gov. Gretchen Whitmer’s fiscal year (FY) 2021 budget proposal includes a plan to find state budget savings on prescription drugs through a statewide preferred drug list.

The MHA engaged in extensive advocacy efforts on the detrimental impact this proposed rule would have had on Michigan’s safety-net hospitals. The association hosted an educational webinar for members in January and issued comment letters on the proposed policy.

The 340B Drug Discount Program is a federal program created by Congress to help provide relief from escalating drug prices to safety-net hospitals and other healthcare providers serving vulnerable patient populations. It requires drug companies to offer discounts of up to 50% on many outpatient drugs. The program makes a meaningful difference in the regions served by participating hospitals and helps ensure patients and communities have access to much-needed care and healthcare services.

The MHA thanks Michigan hospitals for engaging in advocacy efforts on this proposed policy and the importance of the 340B program and will provide updates to members as conversation continues on how to best manage prescription drug costs and reimbursement during the FY 2021 budget process. Members with questions may contact Laura Appel at the MHA.

Tags: Laura Appel, 340B

Posted in: Member News

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