Banner Health, Ascension executives join hundreds of hospital CEOs defending 340B program

Banner Health
CEOs from more than 700 hospitals sent a letter to congressional leaders on Tuesday, calling on them to protect the 340B drug discount program, among them Banner Desert Medical Center. (Banner Health)

CEOs from more than 700 hospitals sent a letter (PDF) to congressional leaders on Tuesday, calling on them to protect the 340B drug discount program. 

The 340B program requires drugmakers to provide discounted drugs to hospitals, health centers, and other healthcare providers that serve disproportionate numbers of low-income and rural patients.

But the program has been under increased scrutiny after enjoying years of bipartisan popularity, including three expansions in Congress. Critics argue that hospitals are taking advantage of the discounts to line their wallets and are snapping up oncology providers to boost the number of pricey specialty drugs they can prescribe under the program.

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RELATED: 340B overhaul at the top of Congress, Azar's mind

The health systems and hospitals which signed on to the letter said the group is concerned cuts to the 340B program would increase the prices of need and existing drugs.

The Centers for Medicare & Medicaid Services adjusted the payment rate in the 340B program in a final rule issued late last year, shifting the payments from up to 6% above the average sales price of a drug to 22.5% less than the average sales price. The change, the agency said, was part of the administration’s goal to reduce drug prices.

“We are concerned about recent regulatory actions that have reduced the reach of this vital program and by legislative proposals that would undo more than two decades of bipartisan work to preserve the health care safety net," the CEO's said in the letter.

Maureen Testoni, Interim President & CEO of the organization 340B Health said the letter is being sent now because there is increased focus from both the Senate and House regarding 340B, including proposals that were considered by the House Energy and Commerce Committee in July.

"Some of that legislation was really concerning to us," Testoni told FierceHealthcare in an interview. "One of the bills would have a proposal which would have cut the number of hospitals that participate in the 340B program in half. Another one would have significantly reduced the number of patients that can qualify for the 340B program.

In June, the Government Accountability Office said the 340B drug discount program is in need of a major overhaul including additional oversight by the Department of Health and Human Services (HHS). 

RELATED: GAO: 340B hospitals, outside pharmacies need more oversight

Testoni said she believes the 340B program still has broad support on Capitol Hill, pointing to proposal by Rep. David B. McKinley, R-W.Va., to roll back the cuts to 340B hospitals.

The intent of the letter is to ensure that members of Congress can consider the vast support from hospital leaders as part of their future decision making, she said. "Having this many CEOs—I mean, 700 hospitals—all sign on to a single document is unusual," she said. "To get them all do it for the 340B program really demonstrates how vital it is for the nation’s safety net hospitals."

According to 340B Health, hospitals that are part of the 340B program made up 38% of acute care hospitals and provide 60% of all uncompensated and unreimbursed care in the U.S. in 2015. Those hospitals provided $26 billion in uncompensated and unreimbursed care, they said. 

“Twenty-two of our 28 hospitals in six states participate in 340B, so we know very well how important it is to protect this assistance for our patients," said Peter Fine, president & CEO of Phoenix-based Banner Health, in a statement. 

"In our larger disproportionate share hospitals, the program enables us to provide a wider range of comprehensive services to people who are uninsured and traditionally underserved—services that would need to be scaled back along with any 340B reductions," he said. "For our more rural critical access hospitals, cuts to 340B would threaten the only places for people in the communities to get their care in the first place.”

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