II 

115TH CONGRESS 

2D SESSION S. 2312 

To provide a moratorium on registration of new non-rural section 340B 

hospitals and associated sites, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 16, 2018 

Mr. CASSIDY introduced the following bill; which was read twice and referred 

to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To provide a moratorium on registration of new non-rural 

section 340B hospitals and associated sites, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as ‘‘Helping Ensure Low-in5 come Patients have Access to Care and Treatment’’ or the 

6 ‘‘HELP Act’’. 


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1 SEC. 2. MORATORIUM ON REGISTRATION OF NEW NON2 RURAL SECTION 340B HOSPITALS AND ASSO3 CIATED SITES. 

4 Section 340B(a) of the Public Health Service Act (42 

5 U.S.C. 256b(a)) is amended— 

6 (1) in paragraph (4)(L), by striking ‘‘A sub7 section (d) hospital’’ and inserting ‘‘Subject to para8 graph (11), a subsection (d) hospital’’; and 

9 (2) by adding at the end the following: 

10 ‘‘(11) MORATORIUM ON REGISTRATION OF CER11 TAIN HOSPITALS AND ASSOCIATED SITES OF SUCH

12 HOSPITALS.—During the 2-year period beginning on 

13 the date of enactment of the Helping Ensure Low14 income Patients have Access to Care and Treatment 

15 Act— 

16 ‘‘(A) an entity described in paragraph 

17 (4)(L) shall not be considered a covered entity 

18 under this section unless such entity was a cov19 ered entity on December 31, 2017 (as evidenced 

20 by the entity having been identified as a cov21 ered entity as of December 31, 2017, under the 

22 covered entity identification system established 

23 under subsection (d)(2)(B)(iv)); and 

24 ‘‘(B) no site shall be added to the covered 

25 entity identification system established under 

26 subsection (d)(2)(B)(iv) or be permitted to 


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1 begin participating in the drug discount pro2 gram under this section, as a ‘child site’ or oth3 erwise, on the basis of association with a cov4 ered entity described in paragraph (4)(L) un5 less such site was identified as a child site as 

6 of December 31, 2017, under the system estab7 lished under subsection (d)(2)(B)(iv). 

8 ‘‘(12) REGULATIONS TO BE ISSUED DURING

9 THE MORATORIUM PERIOD TO IMPLEMENT STATU10 TORY REQUIREMENTS CLARIFYING HOSPITAL ELIGI11 BILITY CRITERIA AND HOSPITAL CHILD SITE STAND12 ARDS AND ENHANCING HOSPITAL TRANSPARENCY.— 

13 ‘‘(A) ISSUANCE OF REGULATIONS.— 

14 ‘‘(i) IN GENERAL.—During the mora15 torium period under paragraph (11), the 

16 Secretary shall promulgate regulations 

17 through notice and comment rulemaking to 

18 implement the standards and requirements 

19 described in subparagraph (B). 

20 ‘‘(ii) DEADLINE.—Such final regula21 tions shall be promulgated and take ef22 fect— 

23 ‘‘(I) before the end date of the 

24 moratorium described in paragraph 

25 (11); or 


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1 ‘‘(II) in the event that any of 

2 such regulations have not taken effect 

3 by such end date, the moratorium 

4 under subparagraph (11) shall be ex5 tended until such regulations are final 

6 and effective. 

7 ‘‘(iii) LIMITATION.—The authority to 

8 promulgate regulations under this para9 graph is limited to setting forth the details 

10 necessary and appropriate to carry out the 

11 requirements of subparagraph (B) effi12 ciently, effectively, and in conformity with 

13 such subparagraph. 

14 ‘‘(B) STANDARDS AND REQUIREMENTS.— 

15 ‘‘(i) HOSPITAL CHILD SITE STAND16 ARDS.— 

17 ‘‘(I) IN GENERAL.—Hospitals de18 scribed in subparagraphs (L) and (M) 

19 of paragraph (4) may register off20 campus outpatient facilities associated 

21 with the hospital (also known as ‘child 

22 sites’) to participate in the drug dis23 count program under this section (be24 ginning after the moratorium under 

25 paragraph (11) ends), if— 


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1 ‘‘(aa) the site is listed on the 

2 hospital’s most recently filed 

3 Medicare cost report on a line 

4 that is reimbursable under the 

5 Medicare program (or, if the hos6 pital is a children’s hospital that 

7 does not file a Medicare cost re8 port, the hospital submits to the 

9 Secretary a signed statement cer10 tifying that the facility would be 

11 correctly included on a reimburs12 able line of a Medicare cost re13 port if the hospital filed a cost 

14 report); 

15 ‘‘(bb) such cost report dem16 onstrates that the services pro17 vided at the facility have associ18 ated costs and charges for hos19 pital outpatient department serv20 ices under title XVIII of the So21 cial Security Act (or, if the hos22 pital is a children’s hospital that 

23 does not file a Medicare cost re24 port, the hospital submits to the 

25 Secretary a signed statement cerVerDate Sep 11 2014 00:46 Jan 18, 2018 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2312.IS S2312

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1 tifying that the services provided 

2 at the facility include or consist 

3 solely of outpatient services); 

4 ‘‘(cc) the facility is wholly 

5 owned by the covered entity; 

6 ‘‘(dd) the Secretary has 

7 made a determination, under the 

8 process described in section 

9 413.65(b) of title 42, Code of 

10 Federal Regulations (or any suc11 cessor regulations), that the facil12 ity meets the Medicare provider13 based standards under section 

14 413.65 of title 42, Code of Fed15 eral Regulations (or any suc16 cessor regulations); 

17 ‘‘(ee) the facility provides a 

18 full range of outpatient services, 

19 in addition to drugs; and 

20 ‘‘(ff) the facility adheres to 

21 the charity care policy and any 

22 sliding fee scale policy of the par23 ent hospital. 

24 ‘‘(II) DE-REGISTRATION.—If at 

25 any time following registration one or 


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1 more of the standards listed above are 

2 no longer satisfied, a registered hos3 pital shall immediately notify the Sec4 retary, de-register the facility, and 

5 keep the facility from making any 

6 purchases under the drug discount 

7 program under this section or rep8 resenting to third parties that it may 

9 purchase under such program. 

10 ‘‘(ii) HOSPITAL ELIGIBILITY STAND11 ARDS FOR HOSPITALS NOT OWNED OR OP12 ERATED BY A UNIT OF STATE OR LOCAL

13 GOVERNMENT.—For purposes of subpara14 graphs (L)(i) and (M) of paragraph (4): 

15 ‘‘(I) A private hospital has been 

16 formally granted governmental powers 

17 by a unit of State or local government 

18 if— 

19 ‘‘(aa) the Secretary receives 

20 a certification from a State or 

21 local governmental entity that 

22 such governmental entity has for23 mally delegated, through State or 

24 local statute or regulation or, if 

25 permitted by applicable State or 


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1 local law, through a contract with 

2 a State or local government, to 

3 the hospital a power, described in 

4 detail in the certification; 

5 ‘‘(bb) the power delegated as 

6 described in item (aa)— 

7 ‘‘(AA) is a bona fide 

8 power that is usually or ex9 clusively exercised by sov10 ereign governments, and is 

11 not merely the power to pro12 vide health care services on 

13 behalf of the government or 

14 to otherwise act on behalf of 

15 the government; and 

16 ‘‘(BB) in the case of a 

17 hospital, is limited to the 

18 power to tax, issue govern19 ment bonds, or quarantine 

20 individuals with commu21 nicable diseases; and 

22 ‘‘(cc) the certification de23 scribed in item (aa) is accessible 

24 to the public as part of the infor25 mation describing the hospital in 


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1 the covered entity identification 

2 system established under sub3 section (d)(2)(B)(iv) (provided 

4 that such system specifies, for 

5 each covered entity hospital, 

6 whether it is publicly owned or 

7 operated, a private nonprofit hos8 pital formally granted govern9 mental powers by a unit of State 

10 or local government, or a private 

11 nonprofit hospital with a contract 

12 with a State or local government 

13 to provide health care services to 

14 low-income individuals who are 

15 ineligible for Medicare and Med16 icaid). 

17 ‘‘(II) A private hospital has a 

18 contract with a State or local govern19 ment to provide health care services to 

20 low-income individuals who are not 

21 entitled to benefits under Medicare or 

22 Medicaid if— 

23 ‘‘(aa) the hospital submits a 

24 copy of the contract to the Sec25 retary for review; 


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1 ‘‘(bb) the Secretary deter2 mines that the contract creates 

3 an enforceable obligation for the 

4 hospital to provide direct medical 

5 care to low-income individuals in6 eligible for Medicare and Med7 icaid in an amount that rep8 resents at least 10 percent of the 

9 hospital’s total costs of care; and 

10 ‘‘(cc) the contract is avail11 able to the public as part of the 

12 information describing the hos13 pital in the covered entity identi14 fication system established under 

15 subsection (d)(2)(B)(iv). 

16 ‘‘(III) If at any time a hospital 

17 not owned or operated by a unit of 

18 State or local government no longer 

19 meets one or more requirements 

20 under subclause (I) or (II), the hos21 pital shall immediately notify the Sec22 retary, dis-enroll from the drug dis23 count program under this section, and 

24 stop making purchases under such 

25 program and representing to third 


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1 parties that it may purchase under 

2 such program. 

3 ‘‘(iii) HOSPITAL TRANSPARENCY RE4 QUIREMENTS.— 

5 ‘‘(I) HOSPITAL REQUIREMENTS

6 TO IDENTIFY SECTION 340B DRUGS.— 

7 In the case of covered entity hospitals 

8 described in subsections (L) and (M) 

9 of paragraph (4): 

10 ‘‘(aa) Claims for covered 

11 outpatient drugs purchased 

12 under the drug discount program 

13 under this section shall be sub14 mitted to public and private 

15 payors using the 340B modifier 

16 established by the Secretary 

17 under the prospective payment 

18 system for hospital outpatient de19 partment services, in conform20 ance with paragraph (22) of sec21 tion 1833(t) of the Social Secu22 rity Act, subsection (h) of 

23 1847A, subparagraph (F) of sec24 tion 1927(a)(5), and paragraph 

25 (5) of section 1857(g), that is 


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1 ‘JG’ (or ‘TB’ in the case of a 

2 claim for reimbursement under 

3 such system submitted by a hos4 pital described in subparagraph 

5 (M) of paragraph (4)). 

6 ‘‘(bb) Such hospitals shall 

7 report to the Secretary on an an8 nual basis, in a form and manner 

9 specified by the Secretary— 

10 ‘‘(AA) the hospital’s ag11 gregate annual revenue from 

12 drugs purchased under the 

13 program under this section, 

14 minus its aggregate annual 

15 acquisition costs for such 

16 drugs broken out by hospital 

17 and by each child site; 

18 ‘‘(BB) the patient mix, 

19 broken down by expected 

20 payment source (including 

21 at least the Medicare pro22 gram under title XVIII of 

23 the Social Security Act, a 

24 State plan under the Med25 icaid program under title 


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1 XIX of such Act, private in2 surance, and uninsured), for 

3 each child site of the hos4 pital listed in the covered 

5 entity information system 

6 established under subsection 

7 (d)(2)(B)(iv), the costs in8 curred at each site for char9 ity care (as described in line 

10 23 of Worksheet S–10— 

11 Hospital Uncompensated 

12 and Indigent Care Data to 

13 the Medicare cost report or 

14 as reported in any successor 

15 form); 

16 ‘‘(CC) the percent of 

17 total revenues at each site 

18 derived from infusion or in19 jection of physician-adminis20 tered drugs; and 

21 ‘‘(DD) with respect to 

22 such hospital and each child 

23 site of the hospital, the 

24 names of all third-party ven25 dors or other similar entities 


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1 that the covered entity con2 tracts with to provide serv3 ices associated with the pro4 gram under this section 

5 (broken down by covered en6 tity and by each child site). 

7 ‘‘(II) PUBLIC AVAILABILITY.— 

8 The Secretary shall make the infor9 mation reported to the Secretary 

10 under subclause (I)(bb) available to 

11 the public (with redactions of any in12 formation the Secretary determines to 

13 be proprietary or confidential, and in 

14 no case shall the report attribute spe15 cific discount information, including 

16 the ceiling price, to any individual 

17 drug product) in an annual compila18 tion of the reported information avail19 able on the internet website of the De20 partment of Health and Human Serv21 ices, and as part of the information 

22 describing the hospital and the rel23 evant child site in the covered entity 

24 identification system established 

25 under subsection (d)(2)(B)(iv).’’. 


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1 SEC. 3. 340B CLAIMS MODIFIER. 

2 (a) MEDICAID.—Section 1927(a)(5) of the Social Se3 curity Act (42 U.S.C. 1396r–8(a)(5)) is amended by add4 ing at the end the following: 

5 ‘‘(F) 340B CLAIMS MODIFIER.— 

6 ‘‘(i) IN GENERAL.—All claims sub7 mitted to a Medicaid fee-for-service pro8 gram or a medicaid managed care organi9 zation (as defined in section 

10 1903(m)(1)(A)) for reimbursement of a 

11 unit of a covered outpatient drug subject 

12 to an agreement under section 340B of the 

13 Public Health Service Act shall include the 

14 340B modifier established by the Secretary 

15 under the prospective payment system for 

16 hospital outpatient department services 

17 under section 1833(t) that is ‘JG’ or the 

18 Submission Clarification Code of ‘20’ de19 veloped by the National Council for Pre20 scription Drug Programs (NCPDP). 

21 ‘‘(ii) DATA SHARING.—Each single 

22 State agency shall make available to a 

23 manufacturer of a covered outpatient drug 

24 any fee-for-service or managed care claim 

25 for reimbursement for a unit of such drug 

26 for the purpose of verifying the propriety 


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1 of any claim for a rebate payment under 

2 an agreement under subsection (b) with re3 spect to such drug. At the manufacturer’s 

4 request, in lieu of making such a claim 

5 available to the manufacturer, the single 

6 State agency may instead provide a list of 

7 claims (and relevant data concerning each 

8 claim) for covered outpatient drugs that 

9 were purchased under an agreement under 

10 section 340B of the Public Health Service 

11 Act or other summary data specified by 

12 the manufacturer. 

13 ‘‘(iii) REPORT.—Each single State 

14 agency shall publish an annual report on 

15 utilization of covered outpatient drugs sub16 ject to an agreement under section 340B 

17 of the Public Health Service Act by the 

18 Medicaid fee-for-service program or a med19 icaid managed care organization (as de20 fined in section 1903(m)(1)(A)) during the 

21 preceding calendar year. The State agency 

22 shall not include confidential patient-spe23 cific, drug-specific, or manufacturer-spe24 cific information in any such annual re25 port.’’. 


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1 (b) MEDICARE.— 

2 (1) MEDICARE PART B.— 

3 (A) HOSPITAL OUTPATIENT DEPARTMENT

4 SERVICES.—Section 1833(t) of the Social Secu5 rity Act (42 U.S.C. 1395l) is amended by add6 ing at the end the following paragraph: 

7 ‘‘(22) 340B CLAIMS MODIFIER.—All claims sub8 mitted under the system under this subsection for 

9 reimbursement of a unit of a covered outpatient 

10 drug subject to an agreement under section 340B of 

11 the Public Health Service Act shall include the 340B 

12 modifier established by the Secretary under such 

13 system that is ‘JG’ (or ‘TB’ in the case of a claim 

14 for reimbursement under such system submitted by 

15 a hospital described in subparagraph (M) or (N) of 

16 section 340B(a)(4) of the Public Health Service Act 

17 or a rural sole community hospital described in sub18 paragraph (O) of such section).’’. 

19 (B) OTHER PART B CLAIMS.—Section 

20 1847A of the Social Security Act (42 U.S.C. 

21 1395w–3a) is amended by adding the following 

22 new subsection: 

23 ‘‘(h) 340B CLAIMS MODIFIER.—All claims submitted 

24 under this part (other than under the prospective payment 

25 system for hospital outpatient department services under 


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1 section 1833(t)) for reimbursement of a unit of a covered 

2 outpatient drug subject to an agreement under section 

3 340B of the Public Health Service Act shall include the 

4 340B modifier established by the Secretary under such 

5 payment system that is ‘JG’.’’. 

6 (2) MEDICARE ADVANTAGE AND MEDICARE

7 PART D.—Section 1857(e) of the Social Security Act 

8 (42 U.S.C. 1395w–27(e)) is amended by adding at 

9 the end the following new paragraph: 

10 ‘‘(5) 340B CLAIMS MODIFIER.—All claims sub11 mitted to a Medicare Advantage organization or a 

12 PDP sponsor under this part and part D, respec13 tively, for reimbursement of a unit of a covered out14 patient drug subject to an agreement under section 

15 340B of the Public Health Service Act shall include 

16 the 340B modifier established by the Secretary 

17 under the prospective payment system for hospital 

18 outpatient department services under section 

19 1833(t) that is ‘JG’ or the Submission Clarification 

20 Code of ‘20’ developed by the National Council for 

21 Prescription Drug Programs (NCPDP).’’. 

22 (3) REPORT ON UTILIZATION UNDER MEDICARE

23 PART B.—The Secretary of Health and Human 

24 Services shall publish an annual report on utilization 

25 under part B of title XVIII of the Social Security 


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1 Act (42 U.S.C. 1395j et seq.) of covered outpatient 

2 drugs purchased subject to an agreement under sec3 tion 340B of the Public Health Service Act (42 

4 U.S.C. 256b) during the preceding calendar year. 

5 The Secretary shall not include confidential patient6 specific, drug-specific, or manufacturer-specific in7 formation in any such annual report. 

8 (c) EFFECTIVE DATE.—The amendments made by 

9 this section take effect on the date that is 6 months after 

10 the date of enactment of this Act and apply to claims sub11 mitted on or after that date. 

12 SEC. 4. REPORTS TO CONGRESS. 

13 Section 340B of the Public Health Service Act (42 

14 U.S.C. 256b) is amended by adding at the end the fol15 lowing: 

16 ‘‘(f) REPORTS TO CONGRESS.— 

17 ‘‘(1) OIG REPORT.—Not later than 2 years 

18 after the date of the enactment of this subsection, 

19 the Office of the Inspector General shall submit to 

20 Congress a final report on the level of charity care 

21 provided by covered entities described in subpara22 graphs (L) and (M) of subsection (a)(4) and sepa23 rately by child sites of such covered entities. 

24 ‘‘(2) GAO REPORTS.— 


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1 ‘‘(A) INITIAL REPORT.—Not later than 1 

2 year after the date of the enactment of this 

3 subsection, the Comptroller General of the 

4 United States shall submit to Congress a re5 port— 

6 ‘‘(i) analyzing the State and local gov7 ernment contracts intended to satisfy the 

8 requirement under subsection (a)(4)(L)(i) 

9 for a covered entity to qualify as an entity 

10 described in subparagraph (L) of sub11 section (a)(4); 

12 ‘‘(ii) assessing the amount of care 

13 such contracts obligate such entity to pro14 vide to low-income individuals ineligible for 

15 Medicare under title XVIII of the Social 

16 Security Act and Medicaid under title XIX 

17 of such Act; and 

18 ‘‘(iii) analyzing how these contracts 

19 define low-income individuals and whether 

20 the Secretary reviews such determinations. 

21 ‘‘(B) SUBSEQUENT REPORT.—Not later 

22 than 2 years after the date of the enactment of 

23 this subsection, the Comptroller General of the 

24 United States shall submit to Congress a final 

25 report on the difference between the aggregate 


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1 gross reimbursement and aggregate acquisition 

2 costs received by each such covered entity (in3 cluding child sites of such entity) for drugs sub4 ject to an agreement under this section.’’. 

Æ 


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