Hospitals participating in the Affordable Care Act's 340B drug pricing program are failing to comply with several key requirements of the law, according to a recent study by the Berkeley Research Group.
The drug pricing program allows certain hospitals and other health care providers to obtain discounted prices on covered outpatient drugs, including prescription drugs and biologics other than vaccines, from drug manufacturers. 340B hospitals receive additional financial benefit because of their access to discounted drugs through the program. With the average savings being around 27 percent and the total 340B hospital purchase of $10.7 billion in 2015, the estimated benefit to these hospitals is roughly $4 billion, according to the Berkeley Group's report. Also, even though at least part of the reason most 340B hospitals qualify for the program is because of the volume of low-income patients they serve, studies cited by the Berkeley Group suggest that many of these hospitals are providing relatively low levels of charity or uncompensated care.
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Researchers with the Berkeley Group looked 2012 and 2013 IRS data gleaned from the 990 forms filed annually. The forms are used by hospitals to self-report data related to the ACA requirements for charity care.
The study found that despite an increase in overall hospital compliance with ACA requirements from 2012 to 2013, there were some measures where the level of non-compliance was still at a concerning level for non-340B and 340B hospitals.
For instance, the study found only 37 percent of 340B hospitals limit their charges for patients who were eligible for charity care to amounts generally billed to insured patients.The number was slightly less in non-340B hospitals.
Additionally, fewer than 62 percent of 340B hospitals regularly notified patients of their potential eligibility for charity care before sending their account to debt collection. Once again the number was only about 3.5 percent less in non-340B hospitals. In general, there was not much difference in compliance between 340B and non-340B hospitals, the study found.
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"These study results demonstrate that hospitals, including 340B hospitals, fail to meet certain requirements established in the ACA that were intended to justify the financial benefit of their tax-exempt status," the authors wrote.
The three other categories of requirements showed hospitals as largely in compliance. According to data for 2013, nearly 98 percent of 340B hospitals had drafted the required written charity and emergency care policies. 84.5 percent had not taken any "extraordinary collection actions" against patients, and 97 percent had performed a Community Health Needs Assessment within the last three years. There is a financial penalty for not doing so.
Twitter: @BethJSanborn