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On June 15, HHS proposed rescinding a recently issued rule that’s been a source of serious concern for Federally Qualified Health Centers (“FQHCs”), covered entities that serve as a vital support for their communities. The rule, which was issued in late 2020 by the Trump administration, would require FQHCs—a specific type of 340B covered entity—to establish additional procedures to ensure that low-income individuals could access insulin and injectable epinephrine at the discounted 340B price.
Though this rule had good intentions in making life-saving medications more affordable for patients, the overall impact would be harmful, both for community health centers and the patients they serve.
The valuable work done by community health centers has never been more apparent, as we survey their efforts in the COVID-19 pandemic. Not only were FQHCs on the front lines of COVID-19, providing care to the most vulnerable patients and communities, they have also been essential in bringing the pandemic to an end by ensuring these underserved populations are able to receive the vaccine. The financial support they receive through their 340B savings is essential to this work.
Our goal has always been to enhance the integrity and sustainability of the 340B program so that it can continue to benefit safety net healthcare providers — including community health centers — and the patients they serve. We believe that a sustainable 340B program should mean less administrative burden for providers — not more.
That is why Kalderos supports HHS’ move to rescind this rule.
Some background on the insulin rule
The insulin rule first appeared in an executive order signed by President Trump on July 24, 2020. HHS, then led by Secretary Alex Azar, implemented this executive order through a final rule that was issued on Dec. 22, 2020.
The rule requires that FQHCs develop and document “written practices” that would make insulin and injectable epinephrine available at the 340B discounted price to patients with incomes at or below 350% of the Federal Poverty Guidelines and who lack health insurance, or have high cost sharing requirements, high deductibles or high unmet deductibles. If the FQHCs impacted by this rule failed to develop and document these processes, they would no longer be eligible for certain federal grants.
One major concern flagged by FQHCs and their supporters was the unusual classification of “low income” as 350% of FPG; this income threshold is not used anywhere else, and adhering to it in one specific case would be administratively burdensome. FQHCs also noted the challenges of assessing ambiguous and moving targets around high deductibles, especially high unmet deductibles; a patient who qualifies one month might no longer qualify the next month.
Finally, FQHCs noted that they are already required to offer discounted, sliding schedule fees to patients with incomes at or below 200% of the FPG, representing the vast majority of patients they care for. Most health centers already make insulin and many other medications available to low-income patients at deeply discounted prices.
The rule was intended to take effect on Jan. 22, 2021, but was delayed by the incoming Biden administration while they reviewed the policy.
Now, HHS is seeking comments on its proposal to rescind the rule altogether.
Why Kalderos supports rescinding the rule
As we explored in our 2021 annual report, out-of-pocket costs for patients are an urgent and pressing challenge that all stakeholders in the U.S. healthcare system must work together to solve. The out-of-pocket cost of insulin is a particularly immediate concern, and we appreciate any intent to address it.
However, we agree with FQHCs and the Biden administration that this rule is an ineffective way to do so. The potential benefits are extremely narrowly targeted, as most low-income, under-insured patients served by FQHCs can already access insulin and injectable epinephrine at discounted prices. Conversely, the burden this rule would place on those health centers would harm all their patients, by reducing access to many needed services and potentially making it more difficult for these patients to access care in their communities at all.
As a corporate member of the National Association of Community Health Centers, Kalderos is proud to support community health centers both through our corporate sponsorships and through our innovative solutions for drug discount management.
We need solutions that make it easier to participate in the program, not more difficult. That’s why we collaborate with covered entities to develop our provider-facing tools like Review, ensuring that these modern, cloud-based tools reduce day-to-day paperwork, giving providers more time to focus on patients.
HHS is seeking public comment on its proposed rescinding of the rule, and comments can be submitted until July 16, 2021. Read Kalderos’ public comment on our perspective that the insulin rule should be rescinded.
