Senate Health & Welfare hears testimony on H 266 as hospitals warn 340B reporting would be burdensome

At a Senate Health & Welfare Committee hearing, witnesses raised concerns that H 266, a bill addressing 340B prescription drug pricing, would impose heavy reporting burdens on hospitals and clinics and would not reliably capture drugs paid through bundled payments.

The 340B program allows certain health centers and hospitals to purchase outpatient drugs at discounted prices. Testimony at the committee hearing focused on whether facilities can produce the payer-level, drug-by-drug payment data the bill seeks and whether that information would be accurate or actionable.

Dawn, identified in testimony as a 340B coordinator at Hartford Medical Center, told the committee that hospitals often cannot itemize drug payments because many payers reimburse services through bundled rates such as inpatient diagnosis-related groups or bundled outpatient procedures. “We can tell you that. But what we get paid for is we don't know,” she said, describing the difficulty of separating drug payments from bundled service payments. Dawn also said small hospitals lack the software and staffing larger systems use to extract the line-level data the bill would require.

A representative identifying himself as John, who said he is with Hartford Childcare and Hartford Medical Center and described himself as a 340B coordinator, told the committee the manual work would be substantial: he said verifying eligibility and extracting relevant lines from electronic pharmacy downloads can require reviewing about “2,000” medication records line by line, a task he called a “major burden” for smaller hospitals.

Minnesota’s experience was cited as a caution. Witnesses noted a Minnesota Department of Health review found widespread data-quality problems and that many reporting entities failed to submit complete information, requiring extensive follow up. Committee members and witnesses said that using procedure J‑codes and service-line payments — an approach Minnesota considered — still excludes drugs paid under bundled rates, meaning the most important missing data may remain unreported.

Jeff Offered of Milton Pharmacy said wholesalers may have comprehensive transaction data and suggested the committee consider those datasets as one potential source. He also urged the committee to study alternative data sources and distribution models carefully, noting risks of abuse in some contracting arrangements. Multiple witnesses raised concerns about “contract pharmacy” arrangements and whether manufacturer limits on contract pharmacies have reduced participation by local pharmacies.

Committee members asked clarifying questions and noted that the version of H 266 before the committee differs from a version that reportedly passed the House and that the House version contains specific reporting requirements. No formal action or vote on the bill occurred at the hearing; the committee indicated it may return to the issue in a future meeting in February.

The discussion emphasized two recurring themes: first, that bundled payment systems and non-itemized billing make it technically difficult for hospitals to report payer-level spending on specific drugs; and second, that other data sources — wholesalers or wholesalers’ transaction records — merit further study as potentially less burdensome ways to capture drug-level spending. Witnesses urged additional study, pilot testing, and caution before imposing statewide reporting requirements.

The committee did not take a vote. Members said they plan to review the submitted written testimony and may request further information from hospitals, pharmacies and wholesalers before considering legislative changes to 340B reporting.