The 340B Drug Pricing Program

The 340B Drug Pricing Program

The 340B Drug Pricing program allows certain healthcare providers and hospitals to purchase covered outpatient drugs at discounted prices from drug manufacturers.  The program, which is not subsidized by the federal government, is intended to allow providers to stretch scarce federal resources as far as possible to provider more care to patients.  Manufactures must offer 340B discounts to covered entities to have their drugs covered under Medicaid.

What 340B Means to Munson Healthcare

Munson Healthcare is the largest rural provider of healthcare in the state of Michigan.  We provide comprehensive, integrated healthcare services to a geographically dispersed population and are eligible for the 340B Drug Pricing program because we serve a disproportionate share of low-income Medicare and Medicaid patients and because we operate several Critical Access Hospitals and Sole Community Hospitals.

Munson Healthcare is a proud signatory to the American Hospital Association’s 340B Good Stewardship Principles.

  • Communicate the Value of the 340B Program
  • Disclosure of our 340B savings annually
  • Maintain rigorous internal oversight of the 340B program

The Value of the 340B Program to Munson Healthcare

  • $30 million: Amount of savings realized from the 340B program in Fiscal Year 2019.
  • $16.8 million: Amount provided as charity care, in-kind health services, volunteer time, and health education training (FY 16).
  • $15.4 million: Cost of uncompensated care for Medicare patients (FY 16).

These savings also allow us to provide the following community benefits (as of 2016)

  • Financial Navigators for Cancer Patients: Cowell Family Cancer Center patients benefited from our financial navigators, which we hired with 340B savings at a cost of over $100,000.  These navigators assisted these patients in finding $20,000 in savings year to date.
  • Community Health Education: 12,960 people benefited from community health education programs and resources.
  • Community-Based Clinical Services: 982 people benefited from community-based clinical services.
  • Healthcare Support Services: 17,016 people received healthcare support services.
  • Transportation Services: 210 people received a ride to cancer treatment therapy
  • Family Support Services: 16,920 families received support enrolling in public programs.
  • Health Professions Education: 646 health professionals received continuing education from Munson Healthcare.
  • Community Building Activities: Munson Healthcare contributed to 362 community-building activities.
  • Research: $685,465 was spent on research including cancer registry, cardiology, and oncology.
  • Charity Care: Munson Healthcare provided $2.5M in charity care - a full write off of hospital costs - to those in our community who qualified and were unable to pay.

MHC Oversight of the 340B Program

Recognizing the importance of maintaining rigorous oversight of our 340B program, Munson Healthcare has established an internal 340B Steering Committee, comprised of key team members from all system hospitals and a system wide 340B Policy/Procedure Guide to guide system compliance with the 340B program.

Each Munson Healthcare covered entity is accountable for these critical compliance responsibilities: 

  1. Using 340B drugs only for eligible “patients”.
  2. Using 340B drugs only on an outpatient basis.
  3. Registering the main hospital and all “child sites” (outpatient facilities that use 340B drugs with the Office of Pharmacy Affairs (OPA). 
  4. Not purchasing 340B priced medications for Medicaid (FFS and Managed Care) patient utilization
  5. Maintaining auditable records.
  6. Maintaining compliance with eligibility criteria and notifying OPA if the hospital loses eligibility.
  7. Maintaining 340B inventory either physically or virtually separate from non-340B inventory.
  8. Self-reporting to OPA any material breach of 340B requirements.

Federal Oversight of the 340B Program

The Health Resources and Services Administration’s (HRSA's) Office of Pharmacy Affairs (OPA) provides oversight of the 340B program at the federal level.  In addition, 340B covered entities must annually recertify their eligibility to remain in the 340B Drug Pricing Program and continue purchasing covered outpatient drugs at discounted 340B prices.