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The Brief – 340B Program 2022

1992 Congress created the 340B Drug Pricing Program to protect safety-net hospitals from escalating drug prices by allowing qualifying providers, generally, hospitals, specialty clinics, and their associated outpatient facilities, to purchase outpatient drugs at a discount from manufacturers.

HHS had set these discounted rates across all hospital groups. Fast forward to 2018, HHS decided to cut the 340B program rates from the average sale price of the drugs plus 6% to the average sales price minus 22.5%.

You do not have to be a mathematician to recognize that is a huge cut for hospitals. It’s $1.6 billion annually to the 340B program. This only affected the hospitals that serve the uninsured, and low-income patients in rural communities. 40% of U.S. hospitals participate in this 340B Program. Participating hospitals rely on profits from the differential between the reimbursement they receive for these drugs and the discounted rates they pay to fund patient care services. On June 17, 2022, with a unanimous decision, the U.S. Supreme Court sided with the hospitals, this is a sigh of relief for these hospitals that are already struggling financially.

ACUTE CARE, INC. partnered with independent physicians and rural health facilities for over 35 years. We help bridge the gap and help facilities manage their providers to their success. If you would like to know more about our Physician Practice Management Solutions.

You can contact: Sam Patterson


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