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WASHINGTON -- Congress has no intention of getting rid of the 340B drug discount program for hospitals and other healthcare facilities, Rep. Morgan Griffith (R-Va.) told hospital executives Thursday.

"There is no one I've run into that wants to eliminate 340B," Griffith said Monday at the American Hospital Association's (AHA) annual membership meeting here. "What we're trying to do is figure out how we can make sure it's being used the way [it's] supposed to be used."

Griffith added that he had spoken with a friend of his, the late Rep. Don McEachin (D-Va.), who died in 2022, about the issue. "One of the issues he asked me about before [his] passing ... He said, 'Let's work together on 340B so we can get it right.' So I made a promise to him and we will follow through on that."

Griffith emphasized that "I don't want anybody to think that if we're doing a hearing or if we're doing some legislation, that anybody wants to get rid of the program. I think it's a great program and it helps rural areas, and it's something that we need to continue."

Under the 340B program, hospitals, health centers, and other entities that serve a disproportionate share of low-income patients can on what they might otherwise pay for covered outpatient drugs, according to the Health Resources and Services Administration. But concerns about the way the program is administered have increased in recent months, prompting senators John Thune (R-S.D.), Debbie Stabenow (D-Mich.), Shelley Moore Capito (R-W.Va.), Tammy Baldwin (D-Wis.), Jerry Moran (R-Kan.), and Ben Cardin (D-Md.) to in February of a bill to make some changes to the program.

"We believe it is necessary to pass legislation in the 118th Congress that provides clarity, transparency, and accountability in the 340B program in order to ensure the program remains strong, long into the future," they wrote. "Today, we are releasing a legislative discussion draft in an effort to address areas of concern in the program and achieve these goals." In particular, the draft included sections on patient definition and contract pharmacy arrangements.

Hospital funding in the Medicare program also came into the spotlight at the gathering. During a "fireside chat," Ashley Thompson, the AHA's senior vice president of public policy analysis and development, asked CMS Administrator Chiquita Brooks-LaSure about a for fiscal year 2025, which was released last week.

"The inpatient [payment] update was proposed at 2.6%," Thompson said. "For most hospitals, that's woefully inadequate, and I know that CMS's hands are tied to some extent, but when the economy-wide inflation rate itself is 12.4% for the past 2 years, that turns out to be double the 5.2% growth in Medicare funding" for inpatient hospital care over the same period.

"I'm wondering if CMS is exploring better ways to take into [account] ... the increases in labor or supply or drug [costs] on a real-time basis to capture inflation," she said. "Are there any levers that CMS can pull to help us out on this issue?"

"CMS is always open to hearing from stakeholders and we're in a proposed rule process," said Brooks-LaSure, noting that the agency does think that its actuaries are using "appropriate" data sources to look at medical inflation. "But we certainly are open to continuing to look at what various parts of the industry might propose for us to do differently ... and we have limited levers [because] much of how hospitals are paid in the Medicare program is dictated by Congress."

Brooks-LaSure also hinted that her agency might be taking more action to curb prior authorization within the Medicare Advantage program. "Compared to what it was 10 years ago, the volume of frustration that I hear about prior authorization has just exploded, and I think it is really at a point where it is affecting care and our workforce in a way that is extremely problematic," she said.

CMS issued a final rule in January requiring Medicare Advantage organizations, state Medicaid and Children's Health Insurance Program (CHIP) fee-for-service programs, Medicaid managed care plans, and CHIP managed care entities to send prior authorization decisions within 72 hours for expedited (urgent) requests and 7 calendar days for standard (non-urgent) requests. The insurers also must report publicly on their prior authorization metrics.

"Prior authorization of course has its place -- it is important that we make sure that we are using our healthcare dollars appropriately," Brooks-LaSure continued. But then she discussed a recent visit she made to a hospital at which she was exposed to the prior authorization process the oncologists had to go through to get treatments approved.

"First of all, just the number of steps that were necessary [was really compelling], but I think the other thing I heard from the oncologists was just what percentage of time they were spending on prior authorization," she said. "And again, there's a place for it, but we don't want our clinicians feeling so burnt out with dealing with this that they just really don't even want to be in the profession."

"We continue to look at prior authorization" in Medicare Advantage, Brooks-LaSure said. "And we are strengthening our oversight as we really see the stories that are coming in. When we hear complaints, we're talking to the companies and looking over their requirements. We also continue to ask for more data from Medicare Advantage plans because we want to make sure that we know that the dollars are being given to patient care."

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