HF4349

Purpose

This bill would change how hospitals are paid for certain biological products used in cell and gene therapies to treat rare diseases. It sets up a separate payment for these products in the inpatient hospital setting, but only if a drug maker enters a value-based payment arrangement with the state.

Main Provisions

• Establishes separate reimbursement to hospitals for biological products provided in the inpatient hospital setting as part of cell or gene therapy to treat rare diseases (as defined by current federal law), when the drug manufacturer signs a value-based arrangement with the state commissioner.
• Sets the reimbursement rate to follow the methodology used for drugs given in outpatient settings (the same approach used in another part of state law for outpatient drugs).
• Requires hospitals to be paid the actual acquisition cost (the exact price paid to obtain the biological product).

Effective Date and Requirements

• The changes take effect July 1, 2025, and depend on federal approval of the necessary documentation to enter into a value-based arrangement under another state program.
• The arrangement hinges on the drug manufacturer entering into a value-based agreement with the commissioner.

How this Changes Existing Law

• Adds a new subdivision focused on “Biological products for cell and gene therapy,” creating a specialized reimbursement process.
• Shifts inpatient reimbursement for these products to align with a value-based framework and with the outpatient drug payment methodology.
• Ties reimbursement to the manufacturer’s participation in a value-based agreement and requires federal approval of related documentation.

Key Concepts and Terms Encountered

• biological products
• cell therapy
• gene therapy
• inpatient hospital setting
• rare diseases
• value-based arrangement
• actual acquisition cost
• outpatient setting
• 256B.0625 subdivision 13k
• 256B.0625 subdivision 13e paragraph e
• United States Code title 21 section 360bb
• federal approval
• documentation required

Relevant Terms cell and gene therapy, biological products, inpatient, outpatient, value-based arrangement, actual acquisition cost, rare diseases, federal approval, documentation, 21 U.S.C. 360bb, 256B.0625, subdivision 13k, subdivision 13e, price methodology.