340B Spotlight: A look at 340B eligibility and charity care

Last week the Alliance for Integrity and Reform of 340B (AIR340B)—of which PhRMA is a member—released a new report looking at charity care provided by 340B hospitals. This expands on previous research on the topic conducted in 2014. Even since implementation of the Affordable Care Act, 64 percent of 340B hospitals are providing less charity care than the national average for all hospitals, including for-profit hospitals. This is even as 340B hospitals receive steep discounts on medicines.

Why is looking at charity care important when talking about reforming the 340B program? Hospitals that qualify for 340B do so in part based on the number of Medicaid patients a hospital treats. Accordingly, Medicaid expansion has increased eligibility for 340B even as hospitals’ uncompensated care burden is declining. Today, roughly 45 percent of all Medicare acute hospitals participate in 340B, and they account for 80 percent of sales of 340B medicines.

But are the uninsured, vulnerable patients the program was created to help seeing the benefit of the program? Stricter 340B eligibility criteria are needed to address the market distorting effects of the 340B program.

For more on 340B, check out our latest 340B Spotlight posts and follow the conversation on Twitter using #Sustain340B.

And tune in today to AIR340B’s Summit using #340BSummit.