On Thursday, April 18, 2024, the Department of Health and Human Services (“HHS”) published a Final Rule implementing 340B Program Administrative Dispute Resolution Regulations (“ADR Rule”), which can be found here. The ADR Rule is set to be published on April 19, 2024, and will go into effect 60 days after the publication date which should be Tuesday, June 18, 2024.
According to HHS, the final ADR Rule aims to accomplish five goals:
- Increase the accessibility of Administrative Dispute Resolution (“ADR”) for covered entities by moving away from a trial-like process to an administrative process that does not rely on the Federal Rules of Civil Procedure or the Federal Rules of Evidence and does not include a minimum threshold for equitable relief.
- Ensure the ADR panel is made up of 340B Program subject-matter experts from the Office of Pharmacy Affairs who can dedicate the requisite time to serve on the panel and who have been screened to ensure they were not involved in previous agency actions related to the claim being presented to the panel.
- Guarantee that the parties have first worked in good faith to resolve the issue before engaging in the ADR process.
- Ensure that the ADR process is only used to resolve the disputes set forth in the ADR provision of the 340B Statute which include the following: overcharges, diversion and duplicate discounts.
- Include a reconsideration process for parties that are dissatisfied with the ADR panel’s decision.
Hall Render submitted comments to the proposed 340B ADR rule and met with the U.S. Office of Management and Budget (“OMB”) regarding key concerns and recommendations for the proposed rule. Overall, we are pleased that a number of our comments were meaningfully addressed in this final version.
Perhaps most importantly, HHS eliminated a Same or Similar Provision, “allowing for a claim to proceed through the ADR process, regardless of whether it is the same as or similar to one that is pending in Federal court.” Additionally, HHS modified the ADR Rule to ensure that no new facts or information may be submitted as part of the reconsideration process. Ultimately, the regulation is in a much better place than its proposed version, and Hall Render will track its impact on covered entities and the 340B Program closely.
Major Considerations and Practical Takeaways
- Any pending claims submitted pursuant to the 2020 final rule will be automatically transferred to the new ADR process.
- HHS clarified that ADR panel decisions will be issued within one year from the claim submission date unless an explanation is provided for the need to exceed the one-year timeframe.
- 340B ADR final agency decisions will be published on an HRSA public-facing website within 120 days of issuance.
- Parties will be informed of their reconsideration rights in the communication of the ADR panel’s decision, and parties will have 30 business days to request a reconsideration of the ADR panel’s decision.
- Covered entities that previously filed a joint or combined claim and are now seeking reconsideration do not need to consent again, but the association or organization filing a claim on their behalf will need to submit an attestation that they have confirmed that all covered entities have agreed to be a part of the reconsideration process.
If you have any questions or would like additional information about this topic, please contact:
- Todd Nova at (414) 721-0464 or tnova@hallrender.com;
- James Junger at (414) 721-0922 or jjunger@hallrender.com;
- Jen Knackert at (414) 721-0924 or jknackert@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
