340B Changes Would Hurt Hospital Margins
Proposed changes in the federal section 340B prescription drug discount program would hurt hospital margins.
So says Moody’s Investors Service, the credit rating agency.
According to Moody’s, the margins of non-profit hospitals are already under pressure because revenue increases are not keeping pace with prescription drug costs. Reductions of payments under the 340B program recently proposed by the Centers for Medicare & Medicaid Services would make a challenging situation worse, Moody’s speculates.
Under the 340B program, eligible hospitals purchase prescription drugs at a discount, supply them to eligible outpatients, and use the savings they gain to provide additional services and outreach to the low-income residents of their communities.
Skeptics maintain that hospitals simply pocket the savings.
Under the regulation proposed by CMS, federal payments to 340B-eligible hospitals would be greatly reduced.
All Pennsylvania safety-net hospitals participate in the 340B program and benefit considerably for it.
Learn more about the issue and Moody’s report on the potential impact of changes in the program in this Healthcare Finance News article.



The idea is to prevent people from going from doctor and doctor and pharmacy to pharmacy seeking prescriptions for dangerous drugs, and it appears to be working. The state’s Department of Health reports that the number of people who visited five or more doctors to obtain prosecutions for drugs covered by the program fell 86 percent in a year and the practice of visiting ten or more doctors in search of such drugs disappeared entirely.
MACPAC advises the administration, Congress, and the states on Medicaid and CHIP issues. It is a non-partisan agency of the legislative branch of government.
Leesa Allen, deputy secretary of the Pennsylvania Department of Human Services’ Office of Medical Assistance Programs and state Medicaid director, has been appointed to the board of directors of the National Association of Medicaid Directors.
Including those who provide services to the more than 2.8 million Pennsylvanians enrolled in the state’s Medicaid program.