Budget Amendment ID: FY2027-S4-405
EHS 405
Covered entity reporting to increase accountability to safeguard benefit for vulnerable patients
Mr. Tarr moved that the proposed new text be amended by inserting after section _ the following section:-
"SECTION 1. Chapter 12C of the General Laws is hereby amended by inserting after section 9 the following section:-
Section 9A.
(a) Definitions. For the purposes of this section, the following words shall, unless the context clearly requires otherwise, have the following meanings:-
(1) “340B program”, the federal drug pricing program described in 42 U.S.C. 256b.
(2) “340B program identification number”, the unique identification number assigned to a covered entity under the federal 340B program.
(3) “Charity care”, for a hospital, the cost of charity care as reported on Worksheet S-10, Part I, line 23, column 3 of Form CMS-2552-10, or any successor form or equivalent federal reporting field; and for any other covered entity, unreimbursed or subsidized care provided without expectation of payment or at reduced charge under the entity’s financial assistance policy, sliding fee scale, or comparable affordability policy, as determined by the center by regulation or guidance.
(4) “Contract pharmacy”, a pharmacy with which a covered entity has contracted to dispense covered outpatient drugs on behalf of the covered entity to patients of the covered entity, whether distributed in person, via mail, or by other means.
(5) “Covered entity”, a covered entity as defined in 42 U.S.C. 256b(a)(4).
(6) “Covered outpatient drug”, a covered outpatient drug, as defined in 42 U.S.C. 1396r-8(k)(2), that has been subject to any offer for reduced prices by a manufacturer pursuant to 42 U.S.C. 256(b)(a)(1), and is purchased by a covered entity.
(7) “Expanded prescription drug programs for disadvantaged populations”, services, subsidies, or other initiatives intended to improve access to prescription drugs or prescription-drug affordability for uninsured, underinsured, low-income, medically underserved, or other disadvantaged populations, including free-drug programs, discounted-drug programs, sliding-fee access, reduced cost sharing, enrollment or patient-assistance navigation, and similar supports.
(8) “Financial assistance policy”, the covered entity’s written policy governing eligibility for free or discounted care, financial assistance, reduced charges, or other affordability assistance for patients, including any policy adopted to comply with applicable federal or state law.
(9) “Health Safety Net”, the program and trust fund established pursuant to sections 65 to 69, inclusive, of chapter 118E.
(10) “Low-income patient”, a patient who qualifies for discounted, subsidized, or free care under a financial assistance policy, sliding fee scale, Health Safety Net requirements, or other affordability-assistance criteria established by the covered entity or by law.
(b) Beginning on April 1, 2027, each covered entity shall annually report to the center, in a form and manner determined by the center, the following information about the prior year regarding the covered entity and each offsite outpatient facility associated with the covered entity:-
(1) Identifying information for the covered entity, including:
(i) the name of the covered entity;
(ii) the service address of the covered entity;
(iii) the 340B program identification number of the covered entity; and
(iv) the designation of entity type, as specified in 42 U.S.C. 256b(a)(4).
(2) Delineated by form of insurance or payor type, including but not limited to Medicaid, Medicare, commercial insurance, and uninsured:
(i) aggregate acquisition cost paid for all covered outpatient drugs;
(ii) aggregate payments received from insurers or payors for all covered outpatient drugs;
(iii) total number of prescriptions and percentage of the covered entity’s prescriptions that were filled with covered outpatient drugs;
(iv) total number of claims for covered outpatient drugs for which payments described in clause (ii) were received.
(3) Total operating costs of the covered entity, including itemized costs for:
(i) implementing direct pass through of 340B program discounts to patients of the covered entity in the form of lower cost sharing for covered outpatient drugs at the point of dispensing or administration;
(ii) implementing a sliding fee scale for covered outpatient drugs at the point of sale for patients with incomes less than 200 per cent of the federal poverty guidelines;
(iii) charity care;
(iv) total costs associated with screening patients for other sources of coverage and potential eligibility for government programs or Health Safety Net assistance;
(v) the covered entity’s total internal, direct expenses related to administering the 340B program, including staffing, operational, and administrative expenses; and
(vi) a brief description of the categories of internal, direct expenses included in clause (v).
(4) The covered entity’s expenditures and activities related to patient affordability and access, including:
(i) total expenditures on financial assistance, reduced charges, reduced cost sharing, or patient affordability assistance;
(ii) total expenditures associated with Health Safety Net-related services, screening, enrollment assistance, or uncompensated care; and
(iii) total expenditures on any similar program for providing unreimbursed or subsidized health care, and a written description of such a program.
(5) The number and percentage of low-income patients of the covered entity who were served by a sliding fee scale for a covered outpatient drug dispensed or administered under the 340B program.
(6) For any covered entity that is a nonprofit hospital, a statement whether the hospital maintains or supports any expanded prescription drug programs for disadvantaged populations and, if so, a description of each such program, including the populations served, the type of drug-access or affordability assistance provided, whether and how 340B program savings, revenues, or margin support the program, and the amount of such support if reasonably determinable.
(7) A description of the relationship between the covered entity’s 340B program and the covered entity’s obligations or practices, as reflected in and supported existing written policies, procedures, or publicly reported materials, concerning:
(i) charity care;
(ii) financial assistance;
(iii) reduced charges for eligible patients;
(iv) billing and collection restrictions applicable to financial-assistance-eligible patients;
(v) emergency medical care policies; and
(vi) community-benefit spending priorities related to prescription-drug access, affordability, or access to medications for disadvantaged populations.
(8) The covered entity’s metrics for patient financial assistance and safety-net support, including:
(i) the number of patients receiving free care, discounted care, or other financial assistance under the financial assistance policy;
(ii) the number of patients screened for eligibility for government programs or Health Safety Net assistance;
(iii) the number of patients assisted in applying for such programs; and
(iv) the number of patients receiving reduced cost sharing or reduced charges funded in whole or in part by 340B program savings or revenues.
(9) Total payments made by the covered entity or any agent of the covered entity to:
(i) contract pharmacies for 340B program-related services and other functions;
(ii) third-party administrators for managing any components of the covered entity’s 340B program; and
(iii) any other third parties in connection with 340B program-related compliance, legal, educational, and/or administrative costs.
(10) Total number of contract pharmacies, and:
(i) the number of contract pharmacies located out-of-state and the states in which such out-of-state contract pharmacies are located;
(ii) the total number of prescriptions and orders for covered outpatient drugs filled by the covered entity and by each offsite outpatient facility associated with the covered entity, and the percentage of such prescriptions or orders that were filled at contract pharmacies, delineated by in-state and out-of-state contract pharmacies;
(iii) the total remuneration paid to or retained by contract pharmacies or their affiliates for any 340B program-related services performed on behalf of the covered entity and each offsite outpatient facility associated with the covered entity; and
(iv) of the remuneration reported in clause (iii), the amount paid to or retained by out-of-state contract pharmacies or their affiliates and the amount paid to or retained by in-state contract pharmacies or their affiliates.
(11) A narrative explanation of whether and how the covered entity’s participation in the 340B program advances its charitable mission, strengthens compliance with financial assistance obligations, or expands access to care for uninsured, underinsured, low-income, or medically underserved populations.
(12) A written description of any board-level or committee-level oversight of the covered entity’s use of 340B program savings or revenues for charity care, financial assistance, Health Safety Net-related services, or other affordability purposes.
(c) Certification. An officer of the covered entity shall certify the completeness and accuracy of the report submitted pursuant to subsection (b).
(d) Public posting.
(1) The center shall post all reports submitted by covered entities pursuant to subsection (b) on a publicly accessible website.
(2) The center may coordinate with the office of the attorney general to align reporting under this section with existing reporting requirements and expectations; provided, however, that nothing in this section shall diminish the center’s authority to require covered entity-specific reporting concerning the relationship between 340B program participation and charity care, financial assistance, or patient affordability assistance.
(3) The center may promulgate regulations or issue guidance necessary to standardize reporting under this section, including definitions of low-income patient and standardized utilization measures.
(4) In issuing regulations or guidance under this section, the center may require covered entities to report data in a manner that permits comparison between: (i) 340B program-related revenues or savings; and (ii) expenditures or support attributable to charity care, financial assistance, reduced charges, Health Safety Net-related services, community benefit activities, and other patient affordability activities.
SECTION 2. This act shall take effect upon its passage."