340B Health


in 340B Health News Releases

WASHINGTON, DC.— A new report demonstrates that 340B hospitals are treating many of the nation’s most vulnerable populations. Based on 2016 Medicare data, the report concludes that 340B hospitals treat a higher percentage of patients who are dually eligible for Medicaid and Medicare, are disabled, or are of certain ethnic/racial minorities than non-340B hospitals or private physician offices.

The report, prepared for 340B Health by L&M Policy Research, compares hospitals participating in the 340B drug pricing program with other hospitals that are not participating. It also compares 340B hospitals with private physician offices. Congress created 340B to help safety-net hospitals, clinics, and health centers stretch their scarce resources to care for more patients and offer more comprehensive services. To participate, hospitals must prove that patients with low incomes represent a disproportionate share of their total patient load.

The researchers looked at populations that traditionally have been underserved by our nation’s healthcare system and found:

  • The percentage of African American patients treated in 340B hospitals is 66 percent higher than in non-340B hospitals and 75 percent higher than in physician offices;
  • The percentage of patients at 340B hospitals who are disabled is 29 percent higher than in non-340B hospitals and 110 percent higher than in physician offices; and
  • 340B hospitals’ percentage of patients who are enrolled in both Medicare and Medicaid (i.e., dual-eligible) is 43 percent higher than in non-340B hospitals and 71 percent higher than in physician offices.

“This new report demonstrates how 340B hospitals are meeting the high bar set by Congress for participation in the drug discount program. By numerous measures, 340B hospitals are treating the lion’s share of patients who typically are less able to access needed care and are more likely to be burdened by chronic illnesses such as diabetes and HIV/AIDS,” said Maureen Testoni, president and chief executive officer of 340B Health.

Hospitals, clinics, and health centers that qualify for 340B receive discounts on outpatient drugs purchased from manufacturers. The savings derived from those discounts are reinvested in patient care. This includes free or low-cost prescription drugs as well as comprehensive services for patients who are uninsured or underinsured, such as care for HIV, opioid use disorder treatment, trauma care, and medication management services. The 340B savings that help enable these services do not rely on taxpayer dollars.

Hospitals qualifying for 340B must meet strict thresholds of care for low-income patients. In order to qualify, a hospital must have a Medicare disproportionate share (DSH) adjustment percentage greater than 11.75 percent, which indicates that the portion of a hospital’s patient load comprised of Medicaid and low-income Medicare patients is at least 27 percent. According to research published in 2018, 42 percent of 340B hospital patients were considered low-income compared with only 27 percent at non-340B hospitals in fiscal year 2015. In that year, 340B hospitals provided 60 percent of all uncompensated care in the U.S. while representing only 38 percent of the nation’s acute care hospitals.

Contact: Richard Sorian at richard.sorian@340bhealth.org or 202-536-2285.