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HRSA Finalizes 340B Dispute Resolution Process

The Health Resources and Services Administration (HRSA) finalized a rule creating a 340B Drug Pricing Program administrative dispute resolution (ADR) process for covered entities and drug manufacturers.

This rule marks a long-delayed implementation of an Affordable Care Act (ACA) requirement that HRSA create a binding ADR process within 180 days of the law’s enactment. HRSA first issued an advance notice of proposed rulemaking on this issue in 2010, followed by a proposed rule in 2016. The final rule is effective Jan. 13, 2021.

In the rule, HRSA provides details on the ADR process, including the composition of an ADR panel, the types of claims covered entities and manufacturers can bring before the panel, and timelines for bringing and resolving claims and submitting consolidated claims.

Using the ADR process, covered entities can bring claims against manufacturers for being overcharged for covered outpatient drugs; manufacturers can bring claims against covered entities for violations of the prohibition against duplicate discounts or diversion. Covered entities and manufacturers can bring claims within three years of an alleged violation for damages or equitable relief totaling more than $25,000. The claims will be reviewed by a three-member ADR panel, chosen by the HRSA administrator from a six-member ADR board that consists of members from HRSA, the Centers for Medicare & Medicaid Services, and the Office of General Counsel. The final rule also allows covered entities to jointly file claims against manufacturers. Associations and organizations may file claims against manufacturers on behalf of their covered entity members. Decisions of the panel will constitute a final agency decision that is binding on the involved parties, which means they can be appealed through the judicial process.

America’s Essential Hospitals is analyzing the final rule and will send members a detailed Action Update in the coming days.

Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Shahid Zaman is a senior policy analyst at America's Essential Hospitals.

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