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  • Washington Highlights

    HRSA Releases Proposed Rule on 340B Administrative Dispute Resolution

    Mary Mullaney, Director, Hospital Payment Policies
    For Media Inquiries

    The Health Resources and Services Administration (HRSA) on Nov. 29 issued a proposed rule to establish and implement an administrative dispute resolution (ADR) process for certain disputes arising under the 340B Drug Pricing Program.   

    The proposed rule notes that under the 340B statute, the purpose of the ADR process is to resolve (1) covered entities’ claims that they have been overcharged for covered outpatient drugs by manufacturers and (2) manufacturers’ claims that a covered entity has violated the prohibition on diversion or duplicate discounts. The proposed rule states that the ADR process is an administrative process designed to assist covered entities and manufacturers in resolving these disputes.  

    HRSA issued previous proposed rules [refer to Washington Highlights, Oct. 14, 2016] and a final rule on Dec. 14, 2020. According to this proposed rule, HRSA “encountered policy and operational challenges” during implementation of the final rule, thereby resulting in revisions to the ADR process that required issuance of this proposed rule.  

    Proposed changes to the ADR process include: (1) establishing a more accessible ADR process that is reflective of an administrative process rather than a trial-like proceeding, (2) revising the structure of the 340B ADR Panel so that it is comprised of 340B Program subject matter experts, (3) ensuring that the parties have worked in good faith before proceeding through the ADR process, (4) aligning more closely the ADR process with the provisions set forth in the 340B statute (diversion, duplicate discounts, and overcharges), and (5) including a reconsideration process for parties dissatisfied with a 340B ADR Panel’s decision. 

    HRSA is accepting comments on the proposed rule until Jan. 30, 2023.