A survey completed by 340B Health of its 1,300 member hospitals reports that rural hospitals use the savings from their 340B programs to keep their doors open. However, DSH hospitals, typically larger in size, used their program savings to cover the losses incurred from underpayments by state Medicaid programs. Although DHS and rural hospitals use the funds in different ways, hospitals unanimously report using their savings to benefit low-income and rural patients.

The 340B drug pricing program has been providing economic support to providers for over 25 years. The program, “requires drug manufacturers to provide discounts on outpatient drugs sold to qualified safety-net hospitals, clinics, and health centers.” Previously, 340B Health pinpointed data that indicated the high-quality care 340B hospitals provided to low-income patients. The findings in this most recent survey detail how hospitals use their program savings.

Larger DSH hospitals reported a savings median between 5 and 10 million dollars, while rural hospitals saved under 2 million. Less than one fifth of these savings for DSH came from contract pharmacy agreements, while contract pharmacies accounted for 50% of savings for rural hospitals.

DSH hospitals used their program savings to cover the losses in underpayments from state Medicaid programs, while rural hospitals often used their savings to keep their doors open in an environment of unprecedented closure rates in the rural US. These responses specifically drove 340B Health to infer that cutting the 340B savings would significantly reduce hospitals’ ability to carry out their missions.

The survey also detailed that program compliance can cost up to $200,000 and require 1 to 3 full-time employees working strictly on meeting government standards.

These data beg the question, how do rural hospitals remain compliant when they need their 340B savings just to keep their doors open? If your department asks itself this question regularly, Prairie Health Ventures can help. Our pharmacy services team acts as an extension of your pharmacy. Our 340B management services include:

  • Assistance with the Office of Pharmacy Affairs registration to prove eligibility to participate in the program
  • Best pricing on and oversight of virtual inventory management and compliance software
  • Negotiating and contracting with independent and contract pharmacies
  • Optimization of 340B operations and financial benchmarking analysis
  • Internal self-audit guidance, assistance, and ongoing customer support
  • Education via webinars, conferences, and onsite visits

Contact us today to learn more.

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