340B Program

What’s new?

  • On Monday, May 7, 2019 a federal district court judge rules that the Department of Health and Human Services (HHS) shall develop appropriate remedies to reverse the reductions applied to Medicare payments during calendar years 2018 and 2019.
  • HHS has until August 5, 2019 to provide a set of recommendations for hospitals to consider and either accept or suggest modifications, as appropriate.
  • On December 27, 2018 a federal judge ruled in favor of the American Hospital Association (AHA) saying HHS “adjustment” by nearly 30 percent of 2018 Medicare payment rates for many hospitals in the 340B Drug Pricing Program (340B Program) was unlawful.  Click here to read the ruling.
  • On July 17, 2018 a federal appeals court dismissed the AHA lawsuit aimed at stopping the $1.6 billion Medicare Part B drug reimbursement cut to 340B hospitals for lack of presentment, not on the merits of the lawsuit.  This followed the same decision as the lower court.

What’s the issue?

  • The federal 340B Program provides discounted outpatient drugs to government-funded hospitals, health systems and clinics serving low-income patients without using taxpayer dollars.
  • By providing outpatient pharmaceuticals at discounted rates, the 340B Program enables hospitals to provide reduced-price drugs to patients, expand comprehensive health services and offset losses from serving patients who cannot pay.
  • There are six Presence Health hospitals that are covered entities under the 340B Drug Pricing Program.
  • The 340B Program plays an important role in the provision of pharmaceuticals to the vulnerable populations that our hospitals serve and in particular, it has enabled Presence Health hospitals to stretch scarce resources and provide services for underserved and uninsured patients who cannot afford to pay for care.
  • Members of Congress have questioned the use and transparency of the 340B program.  Three bills were introduced in the 115th Congress (2017-2018( to make changes to the 340B program including S 2453 (Sen Chuck Grassley, R-IA), S 2312 (Sen Bill Cassidy, R-LA) and HR 4710 (Rep Buchson, R-IN); however none were advanced.  See External Resources below for bill comparison.

Why does it matter?

  • The 340B Program has helped reduce the high costs of treating our indigent, uninsured and underinsured patients while expanding access to needed medications and services.
  • Through the 340B Program, Presence Health hospitals have increased the number of low-income patients we serve. These patients have received life-saving drugs, and the availability of these discounted drugs through the 340B Program has also reduced readmissions.
  • As a result, our hospitals have used the savings to invest in programs to meet essential community needs, expand health care services to the community and offset losses from uncompensated care.

What is the AMITA Health perspective?

  • 340B helps increase access to life-saving drugs without using taxpayer dollars. AMITA Health believes that the 340B program should be both cost-effective and administered with the highest regard to protecting program integrity. We believe the purpose of the 340B program provides hospitals with revenue to increase health services to needy and uninsured patients.
  • 340B savings allow hospitals with large uninsured, Medicaid or Medicare populations to serve more patients. The 340B Program helps create the financial capacity for high volume providers to innovate and move to population health as well as provide community health programs to vulnerable populations.
  • Congress should protect the 340B program. If the 340B Program were to be restricted, economic consequences would be significant and critical services would be cut back at our AMITA Health hospitals. The loss of the savings associated with the prescriptions in the 340B Program would limit our ability to finance a significant amount of community health services that we currently provide to patients.


AMITA Health Resources

Materials developed by AMITA Health to help you understand, communicate and engage on issues important to health care and our ministry.

Letter to Health Resources and Services Administration – 4/18/2017

Comments on HRSA Interim Final Rule Further Delaying Effective Date of 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation

View Resource

External Resources

Information from third-party organizations that can be resources for you to continue to learn about the issues at hand.

H.R. 6071 – The SERVE Communities Act Brief

H.R. 6071, "Stretching Entity Resources for Vulnerable Communities Act" (SERV Communities Act) clarifies the intent of the 340B program, as well as enhance transparency and accountability in the program.

View Resource

340B Health Congressional Bill Comparison

340B Health Congressional Bill Comparison

View Resource

National Journal 340B Program Summary

340B Program Provides Vital Services and Benefits Low-Income Individuals

340B Medicare Out Patient + View Resource

Featured News

Featured news includes articles from multiple viewpoints and is designed to keep you abreast of the current debate around this issue. This information should not be construed as our point of view.

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Azar says “change is coming” for 340B

HHS Secretary Alex Azar warned hospitals and drugmakers both on Monday that “change is coming” to the 340B program, stressing the “need to disrupt the entire system of ...

Healthcare Drive + July 09, 2018 + View Article

Don’t be penny wise, pound foolish with 340B drug pricing program

OPINION – Like many of my fellow Republicans, I welcome the re-examinations of policy the Trump administration is bringing to Washington. As a physician, I ...

The Hill + July 04, 2018 + View Article