AIR340B has released a new report saying "only true safety-net facilities" should be eligible for 340B discounts.

AIR340B Releases Study Criticizing DSH Hospital Commitment to the Underserved

Drug distributor AmerisourceBergen’s business consulting unit Xcenda has written an issue brief for drug industry-led group AIR340B saying Congress and the executive branch should revise 340B eligibility standards to keep 340B “from being used solely as a profit center for hospitals and pharmacies that do not serve low-income and underserved patients in the communities where they live.”

The paper found that 38% of 340B disproportionate share (DSH) hospitals, 29% percent of their child sites, and 26% of their contract pharmacies are in medically underserved areas (MUAs)—places designated by the U.S. Health Resources and Services Administration (HRSA) as having too few primary care providers, high infant mortality, high poverty, or a high elderly population.

The government uses the MUA designation mainly to boost Medicare reimbursements for federally qualified health centers, ­to certify rural health clinics, and to grant waivers to physicians as an inducement to work in underserved areas. Providers do not need to be in an MUA to participate in 340B.

“Having so few 340B hospitals, clinics, and contract pharmacies located in MUAs is antithetical to the mission of the 340B program,” Xcenda wrote. “If the 340B program was designed to support covered entities serving low-income and vulnerable patients, why are so few 340B hospitals located in the most medically underserved communities? Additionally, if 340B DSHs are permitted to extend their use of the 340B program through child sites and contract
pharmacies, why are they choosing to affiliate with outpatient practices and for-profit pharmacies that are rarely in MUAs, rather than expanding their footprint to increase access in such MUAs?”

“Congress and HRSA should consider revisiting the eligibility standards for the 340B program to ensure these standards permit only true safety-net facilities to be eligible for 340B discounts,”

Excenda said.

The American Hospital Association (AHA) criticized Xcenda’s paper.

“This drug company-backed ‘study’ seemingly tries to invent their own criteria for 340B eligibility,” said AHA Senior Associate Director of Policy Bharath Krishnamurthy. “While Medically Underserved Areas (MUAs) are an important metric in defining geographic areas of underserved medical needs, it does not mean that there aren’t many underserved and low-income populations in many other areas. Under the 340B statute, to qualify for the 340B program as a DSH hospital, a hospital must have a minimum of around 28% of their patient population as low-income. In addition, according to a recent study, the average 340B DSH hospital has about 40% of their total patient population as low-income. Finally, it is important to highlight that 340B hospitals provided $68 billion in benefits to the communities they serve in 2018 alone.”

Xcenda’s position on 340B DSH hospitals and their contract pharmacies differ from those of other AmerisourceBergen divisions that work with the same hospitals and some of the same pharmacies.

AmerisourceBergen’s Pharmacy Solutions unit helps hospitals and other covered entities implement, maintain, and optimize their participation in 340B. It also helps entities implement, staff, and manage specialty pharmacy services. AmerisourceBergen’s 340B Advisory Services unit supports independent pharmacies that serve as 340B contract pharmacies.

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