26 Sep Minnesota’s Largest Newspaper Explores How CMS Proposed Rule Would Hurt 340B Hospitals and Patients
“A drug discount program that helps safety net providers save millions could be significantly weakened under new regulations proposed by the Trump administration.
Apart from looking at higher drug costs, hospitals and clinics say the biggest hit will come to programs and services for low-income or vulnerable patients.
That’s because the safety net providers are required to use the savings earned from discounted drug purchases to invest in programs, such as extending clinic hours, giving free or discounted medications to the uninsured or providing mental health treatment.
Little known outside health care circles, the so-called 340B program requires drugmakers to discount sales of medications to providers that serve a high percentage of low-income or uninsured patients. The prices are set according to a federal formula and vary by drug, but the discounts range from 20 to 50 percent, according to some studies.
‘This is an opportunity for facilities to stretch their scarce dollars,’ said Charles Cooper, 340B program director for Minneapolis-based Fairview Health Services. ‘It is a way to be able to provide services that they feel are needed for their unique settings and populations.’
One study found that in 2013, qualifying providers spent $7 billion on medications under the program, which yielded savings of $3.8 billion. Only drugs used or dispensed in outpatient or emergency room settings are eligible for the discounts.
In July, the federal Centers for Medicare and Medicaid Services, which runs the two large health care programs for the elderly and the poor, proposed a new rule that would, in essence, erase the savings that come with the discount.
At St. Paul-based Regions Hospital, the change could mean that its 340B drug savings, which run about $12 million a year, would be shaved by $2 million to $3 million.”
