340B Insight

About two years ago, Indiana University Health implemented a 340B-funded comprehensive medication review clinic after pharmacy staff noticed patients at their hospitals were not filling maintenance prescriptions due to high cost. Although patient assistance was available, there was not a systematic approach to connecting qualifying patients with the financial help and education they needed, and the health system started the clinic to fill that gap. IU Health Regional Pharmacy Manager of Ambulatory Services Carrie Krekeler discusses how the clinic came about and how it works to improve patient health outcomes.

Improved Drug Affordability and Patient Education

When a prescription goes through IU Health’s comprehensive medication review clinic, pharmacists and other staff will prioritize finding financial assistance for eligible individuals and teaching patients important information about taking their medications. Krekeler says clinic staff will look for discounts for all medications a patient is on and see what a patient’s insurance will cover, if there are copays, and if prior authorization is needed. Staff then will connect patients to coupon cards, manufacturer assistance programs, or 340B-funded assistance through IU Health.

Demonstrated Results

In the two years since the clinic launched, Krekeler says its success has prompted IU Health to reinvest more 340B dollars to expand its reach. Patients with heart failure and diabetes who have gone through the clinic have seen significant improvements in their key health metrics. The clinic helps patients better maintain their health and stay out of the hospital.

Understanding 340B Is Vital for Such Programs

Krekeler says IU Health was able to launch its clinic after adapting a similar initiative that UC Davis had implemented. The key to getting the IU Health clinic off the ground was obtaining buy-in from executives who understood 340B and finance and were able to see the long-term benefit in investing 340B dollars in this area.

340B savings do not just enable hospitals to provide more care, they also help hospitals pioneer innovative approaches to bringing care directly to patients. For West Virginia University Medicine, which serves a high population of Medicare and Medicaid patients, one of these 340B-funded innovations came from recognizing a need to increase cancer screening rates. WVU Medicine 340B Enterprise Director Karen Famoso tells us how the system’s mobile cancer screening initiative came about.

The Barriers to Cancer Screening

WVU Medicine identified that some of the biggest social determinants of health for its West Virginia patients were relatively unique to the areas it serves. The rural state has significant travel barriers, small population areas, and high poverty rates, a combination that leaves thousands of patients without easy access to a source of primary care.

Mobile Screenings Look for Breast, Lung Cancers

Today, WVU Medicine operates two types of mobile cancer projects: Bonnie’s Bus and LUCAS. The former launched in 2009 and is a mobile mammography unit named after a patient who died because she had limited access to breast cancer screenings. Her family donated funding to the hospital to support this effort. More than a decade later, WVU Medicine introduced the mobile lung screening program LUCAS. That initiative provides low-dose CT scans to patients meeting the screening guideline using a nearly 70,000-pound tractor trailer.

340B Is Key To Sustaining Mobile Screening Efforts

Famoso says WVU Medicine funds its mobile cancer screening programs through grants and donations, but that is not enough to cover the full cost. That is where 340B savings can help cover the operating loss, which was almost $400,000 last year. Without those 340B savings, the health system’s financial situation would not allow investments in mission-focused programs such as Bonnie’s Bus and LUCAS.

Resources

1. Lung Cancer Screening on Wheels
2. HRSA Reviewing Rebate Pilot Proposals and Comments
3. Second Federal Appeals Court Upholds State Contract Pharmacy Law

One important but understated aspect of 340B compliance is the importance of training new and existing team members on how the program works. But what does effective training look like? Pooja Shah, the system pharmacy manager of 340B programs at University of North Carolina Health, walks us through the key elements of an effective and engaging 340B education strategy.

Setting a Baseline of 340B Knowledge

UNC Health utilizes a two-pronged strategy to 340B education for its team: didactic and interactive approaches. The didactic approach involves creating three online, standardized learning modules to educate those who are new to 340B or who interact with it indirectly as well as those who are more involved in day-to-day 340B operations. The interactive approach involves an educational and decision-making structure designed to adapt to new 340B developments in real time. 

Compliance Meetings Facilitate Discussion

UNC Health uses entity-level and system-level oversight committees to discuss key 340B compliance issues and relevant metrics. Shah says these meetings offer ways to inform senior leadership about key 340B changes and keep other stakeholders, such as hospital compliance and legal credentialing professionals, in the loop.

340B Education Is Best When Nimble

As hospitals evaluate their 340B education efforts, Shah says it’s important they explore existing resources but also work with stakeholders to discuss what would best serve them when learning about 340B. Hospitals also can change existing governance structures to incorporate 340B discussions. Shah says the ability to stay nimble and be able to quickly identify and assemble key players in the 340B space is key to keeping teams informed amid times of change.

Resources

1. Read Our Appeals Court Brief Opposing 340B Rebate Schemes

Mid-August to mid-September marks the time every year when hospitals need to recertify for 340B. Failure to recertify in time could cost a hospital its ability to participate in 340B. 340B Health Senior Manager of Policy and Compliance Rebecca Swartz joins us to walk listeners through the process.

Why recertification is “exceptionally important”

Swartz says annual recertification is not just important, it’s also one of the central tenets of 340B compliance. All hospital types except critical access hospitals need to make sure they’re meeting the minimum disproportionate share percentage threshold. Hospitals also need to affirm that they are non-profit facilities and that all their registered parent and child sites continue to have reimbursable outpatient costs and charges on their Medicare cost reports.

The cost of losing eligibility is high

Failure to recertify 340B eligibility in a timely manner can lock hospitals out of their access to 340B pricing for a year or more. That could deprive a hospital of crucial resources to provide the care and support its patients need.

Tips for a smooth recertification

Swartz says a key to making the process go smoothly is to start early and make sure hospital officials have the necessary worksheets and other documentation before the recertification process begins. Authorized officials and primary contacts should be on the lookout for returned tasks from HRSA and other messages to ensure their recertification process is complete. Taking screenshots of each step of the process also can help identify and fix discrepancies that might arise.

Resources

1. Annual Hospital Recertification Began August 11
2. 340B Health Webinars
3. HRSA Announces 340B Rebate Pilot Program for up to 10 Drugs in 2026 
4. 340B Health Responds To HRSA 340B Rebate Pilot Program

Patients with behavioral health and substance use disorders often struggle with accessing and staying on the daily oral medications they need to keep their disorders controlled. That’s why SSM Health uses some of its 340B savings to run long-acting injectable (LAI) clinics in the St. Louis area to help these patients achieve better health. We speak with SSM Health Vice President of Pharmacy Financial Operations Michelle Schmitt to learn how much of a role 340B plays in that patient care mission.

LAI clinics offer comprehensive services

SSM Health’s three LAI clinics offer injections for patients with conditions such as bipolar disorder, schizophrenia, and alcohol and opioid use disorders that might last as long as three to six months. Clinic visits also give the patients access to a full team of pharmacists, psychiatrists, nurses, therapists, and others to help them navigate treatment and stay healthy.

340B funds are key to patient access

Because behavioral health is often a subsidized service, 340B savings are crucial to the operations of the clinics. They also enable SSM Health to offer financial assistance to patients living up to 400% of the poverty level so they can afford the treatments they need to stay on the road to recovery.

Cuts to 340B would be detrimental to patients

Schmitt says losing access to 340B pricing could mean a 60-70% price increase in the cost of LAI drugs, which would threaten the viability of the clinics and the financial assistance that many patients rely on to access their treatments. She says these clinics are a great example of how 340B is about much more than just price discounts; it provides resources for health systems to meet unique community health needs and serve patients where they are.

Resources

1. Federal Legislation Would Ban Harmful Drug Company Restrictions on 340B

About three years after being signed into law, one provision of the Inflation Reduction Act (IRA) that is of particular importance to 340B hospitals is about to take effect: Medicare price caps. Jan. 1, 2026, marks the date that the first 10 Medicare drugs will be subject to a maximum fair price (MFP). Meetali Desai, director of pharmacy business services at UMass Memorial Medical Center, joins us to explain how this will affect 340B hospitals and health centers such as hers.

The Good and Bad News for Covered Entities

The good news, Desai says, is that there is potential for the 340B ceiling prices to go down for certain medications. This is because the MFP will become the new “best” price in the formula for calculating 340B prices. However, because the law will cap reimbursement rates to MFP when Medicare patients receive those drugs, 340B hospitals will see their 340B savings amounts go down for those dispenses.

Updated Calculator Can Help Hospitals Gauge Potential Impact

340B Health recently updated its calculator for hospitals to use to estimate the effects of MFP pricing based on the newest data. This new calculator allows users to project what the potential impact from the IRA could be on a hospital, including if drugmakers decide to lower their list prices significantly to avoid IRA inflation penalties. This drop in prices of Medicare drugs could result in 340B hospitals seeing higher ceiling prices and reduced savings.

Reduced Savings Could Impact Patient Care

Desai says Medicare price caps, combined with other financial pressures on hospitals, could mean some rough times ahead for hospitals that care for a large proportion of low-income patients. She encourages 340B teams to share their results from the IRA calculator with their senior leadership and with 340B Health as the hospital community prepares for the impact of these caps.

Resources

1. Use Our IRA Calculator and Share How Your 340B Savings Will Change
2. Read Our Analysis: Second Federal Court Affirms HRSA's Authority Over 340B Rebates

Health systems eligible for 340B savings must strike a balance by staying compliant with purchasing rules while also maximizing the amount of eligible savings they can obtain to invest in patient care. Angela Campitelli, the director of the pharmacy 340B program at MetroHealth System in Cleveland, explains how a hospital system such as hers implements a purchasing strategy that achieves that balance.

Following rules for 340B purchases

Disproportionate share (DSH) hospitals, children’s hospitals, and cancer hospitals are subject to a group purchasing organization (GPO) prohibition that bars them from buying covered outpatient drugs on GPO accounts. That requires maintaining a purchasing system that involves buying drugs at wholesale acquisition cost (WAC) for neutral inventory and then replenishing at 340B, WAC, or GPO pricing depending on how the drug is used.

How the cycle can break down

Purchasing drugs outside of the outlined processes could cause violations of the GPO prohibition or other 340B rules, which could lead to sanctions that might include losing eligibility for 340B. That is why health systems such as MetroHealth use staff education, regular auditing, and other safeguards to ensure they are purchasing and replenishing drugs on the correct accounts.

Investments in the strategy

Campitelli recommends 340B hospital teams bring their senior leadership on board to invest in auditing and other resources to ensure a strong purchasing strategy. Such investments will help avoid potential rule violations while ensuring that hospitals are not walking away from 340B savings to which they are entitled.

Resources

1. 340B Health Appeals Rebate Ruling; Federal Court Agrees to Fast-Track Drugmaker Appeals

After months of litigation in a federal district court, a key decision recently came out in the legal fight over 340B drug rebates. 340B Health Vice President of Legal and Policy Amanda Nagrotsky updates us on the development.

Court deals a blow to drugmakers

D.C. district court judge Dabney Friedrich ruled on May 15 that manufacturers cannot unilaterally implement rebate models for 340B, agreeing with the Health Resources & Services Administration (HRSA) that the agency effectively has preapproval authority over rebates. In her decision, the judge cited early results from a 340B Health survey finding that shifting 340B to a rebate model would divert significant hospital resources from patient care. Drugmakers have already appealed the ruling.

Some bright spots for drugmakers in this decision

Although the decision largely went against pharmaceutical companies, the judge ruled that the 340B statute does not categorically prohibit rebates, leaving the door open for government approvals of rebates. The judge also agreed with drugmakers’ assertions that HRSA should consider how rebate models could improve 340B compliance and how requiring the sharing of data through rebates could aid in drug company audits of covered entities.

Will HRSA stop all rebates from proceeding?

Despite this decision, the legal fight over rebates isn’t over yet. The judge found that, for three of the manufacturers in these cases, HRSA has yet to issue final decisions with respect to their proposed rebate models. In the case of Sanofi, the judge found that HRSA failed to adequately explain the legal basis for rejecting the drugmaker’s rebate model, and she directed the agency to reconsider its decision and explain whether and how it would violate the 340B statute. HRSA sent rebate guidance to the White House for approval earlier this month, though as of recording this episode it was not known what that guidance would say.

Resources

1. Read Our Analysis of the First Federal Court Decision on Rebates
2. 340B Health Continues Court Fight Against Rebates

More than a third of patients released from the hospital never fill their discharge prescriptions, but “meds-to-beds” programs can help improve that statistic. That is the approach Renown Health in Reno, Nev., took with the help of its 340B savings. Renown Vice President of Pharmacy Services Adam Porath joins us to describe how this meds-to-beds program improves patient care.

Hospital readmissions down, patient convenience up

Renown Health’s 340B-funded program offers medication to patients who are being discharged from the hospital, either through bedside delivery, pneumatic tube, or a unique discharge lounge. The effort began as a pilot for Medicaid patients in 2016, and it demonstrated patients in the program were 25% less likely to be readmitted to the hospital once discharged. These health improvements plus the added convenience of medication access for patients convinced the system to expand the program.

340B pricing to patients who cannot pay

Porath says Renown Health refers patients who cannot afford discharge medications to its social services team, which can authorize providing the drugs to those patients at the 340B-discounted rate. The team also will work with patients to see if they qualify for coverage such as Medicaid or other programs to reduce their out-of-pocket costs. Porath said Renown’s meds-to-beds program provides drugs free of charge to about 30 patients per month.

The keys to success

Renown Health’s meds-to-beds program has been a success, with more than 80% of eligible patients participating as of the end of 2024. The hospital expanded the services to all patients and started operating it 24/7 in April 2024. Porath said the keys to success include regular reporting to stakeholders and innovations to handle a large volume of patients discharging at once. Such changes allow all parties to stay in the loop with the development of the program and to celebrate successes as they occur.

Resources

1. Read Our Analysis of the First Federal Court Decision on Rebates
2. Second Federal Judge Allows 340B Health, Member Hospitals To Intervene in Rebate Lawsuit

Big potential changes to how 340B operates plus heightened interest in both new protections and new restrictions for covered entities means there is much to keep track of in the 340B world. 340B Health CEO Maureen Testoni joins us to make sense of recent developments in the nation’s courts and beyond.

Rebates Get Their Day in Court

340B Health, two member hospitals, and the government met drug companies in court in late April to challenge drugmaker attempts to replace 340B discounts with rebates. Testoni says the judge cited potentially devastating consequences to hospitals if rebates proceeded but also had probing questions for the government on how it is working to address drugmaker compliance concerns. The Dept. of Health and Human Services is set to release guidance by early June on the rebate issue, and the court’s decision could come out soon.

The White House Proposes 340B Big Oversight Shift 

A leaked copy of the Trump administration’s latest budget proposal includes a plan to move the Office of Pharmacy Affairs (OPA) from the Health Resources & Services Administration to the Centers for Medicare & Medicaid Services. Testoni says the oversight shift is concerning because of a stark difference between the purpose of 340B and the operations of Medicare and Medicaid. CMS also imposed years of Medicare payment cuts to 340B hospitals that the U.S. Supreme Court eventually overturned.

340B Protections, Mandates Take Center Stage

States continue enacting laws to protect hospital access to 340B pricing, but they also are moving forward with reporting mandates and proposals to define how hospitals should use their savings. Testoni said reporting and use-of-savings mandates lead to misdirected views on the purpose of 340B, which goes far beyond direct patient care and cost assistance. On Capitol Hill, a report from a long-running investigation of 340B recently came out, contributing to the debate over possible new restrictions.

Resources

1. Federal Government Signals Upcoming Guidance on 340B Rebate Models Amid Legal Challenges
2. Brief Your Leaders on White House Plans for Major 340B Changes
3. Nebraska Is 12th State To Enact Contract Pharmacy Protections
4. Indiana Becomes Fifth State To Mandate 340B Reports From Hospitals
5. Key Senator Concludes 340B Investigation, Calls for Major Reforms
6. New 340B Health Research
7. 340B Impact Profiles