01/14/2020 | News release | Distributed by Public on 01/14/2020 19:43
The Government Accountability Office (GAO) released a new report on 340B hospital eligibility complianceand made a number of alarming observations that underscore the need for more accountability in the 340B program. The key takeaway: It is likely that there are nongovernmental hospitals participating in 340B that are not eligible for the program but have taken advantage of the lax oversight of 340B so they can reap the financial benefits of the program.
To participate in the 340B program, hospitals must meet several criteria set out in the 340B statute. Private nonprofit hospitals ('nongovernmental hospitals') must demonstrate to the Health Resources and Services Administration (HRSA) that they are nonprofit and have a contract in place with a state or local government to provide health care services to low-income individuals not eligible for Medicare or Medicaid. GAO took a closer look at the 'contracts' 248 hospitals used to qualify for 340B and concluded that 'HRSA's current processes and procedures do not provide reasonable assurance that nongovernmental hospitals seeking to participate and benefit from the 340B Program meet the program's eligibility requirements.' Some of the problems GAO identified include:
These findings are especially alarming considering all the studies that have been released in recent years raising concerns with the 340B program and its market-distorting effects on the U.S. health care system. For example, the Berkeley Research Groupfound the amount hospitals and other 340B entities retained from the sale of brand medicines purchased through the 340B program was nine times larger in 2018 than in 2013. And in December, Milliman released datashowing 340B hospitals are reimbursed on average three times what they pay for physician-administered medicines.
There are far too many hospitals participating in 340B simply to abuse the program in order to generate additional revenue, and vulnerable, low-income patients are the ones paying the price. Many of these same hospitals use questionable billing practices that target poor and needy patients. In fact, a Kaiser Health News analysisfound that 45% of nonprofit hospitals routinely bill low-income patients that qualify for charity care. Enough is enough. Lawmakers need to take action and stop patients from getting caught in profit-driven hospital practices. HRSA could start by reviewing the six recommendations GAO made in their new report.