Compliance News Roundup: Lookout for Compliance Issues with the 340B Drug Pricing Program

1. Vanderbilt University Medical Center pays $6.5M to resolve Medicare fraud allegations: “Vanderbilt University Medical Center paid $6.5 million to settle a whistleblower suit alleging VUMC committed Medicare fraud between 2003 and 2011, according to a Tennessean report. VUMC paid the settlement earlier this week. The lawsuit, filed under seal by three former VUMC anesthesiologists in 2011 and made public in 2013, claimed the health system's surgery scheduling practices violated Medicare billing policies.” Read more here

2. OHRP Generally Conducted Its Compliance Activities Independently, But Changes Would Strengthen Its Independence: “Protecting the rights of human subjects-individuals who volunteer to participate in research-is critical to ensuring their safety and public confidence in research conducted or supported by the Department of Health and Human Services (HHS). OHRP enforces compliance with HHS regulations for protecting human subjects. Congress and others have raised questions about OHRP's independence, and Congress requested that OIG review OHRP procedures and make recommendations to strengthen protections for human subjects and ensure OHRP's independence.” Read more here

3. Deeper Than the Headlines: 340B Drug Pricing Program: The 340B drug pricing program was authorized by the Congress in 1992 to generate savings for certain safety-net health care providers by allowing them to purchase outpatient drugs at discounted prices.  It is estimated that the savings to 340B providers attributable to the program in 2015 was $6 billion.

In a nutshell, drug manufacturers sign a pricing agreement that they will charge certain eligible health care providers (340B providers) at or below specified maximum prices, known as ceiling prices. The manufacturers calculate 340B ceiling prices each quarter by applying a formula to confidential drug pricing data. The 340B providers benefiting from these discounted prices include such safety-net providers as community health centers and hospitals that serve a disproportionate number of low-income patients. Read more here