Hos­pi­tals slam GAO re­port crit­i­ciz­ing 340B drug pro­gram

Modern Healthcare - - NEWS - By Vir­gil Dick­son

Hos­pi­tals say the Gov­ern­ment Ac­count­abil­ity Of­fice used faulty method­ol­ogy when it found that hos­pi­tals that serve high num­bers of low­in­come pa­tients abuse a fed­eral drug dis­count by over­pre­scrib­ing med­i­ca­tions. HHS raised sim­i­lar con­cerns about the find­ings.

Hos­pi­tals that serve a dis­pro­por­tion­ate share of unin­sured and low-in­come pa­tients have ac­cess to dis­counted prices on out­pa­tient drugs through the 340B Drug Pric­ing Pro­gram, ad­min­is­tered by the Health Re­sources and Ser­vices Ad­min­is­tra­tion. Drug­mak­ers have ar­gued that the pro­gram is be­ing ex­ploited by hos­pi­tals for fi­nan­cial rea­sons and should be pared back.

A GAO re­port re­leased last week found that in 2008 and 2012, per-ben­e­fi­ciary Part B drug spend­ing, in­clud­ing on­col­ogy drug spend­ing, was sub­stan­tially higher at hos­pi­tals us­ing the 340B dis­count than at other hos­pi­tals. For ex­am­ple, in 2012, av­er­age per-ben­e­fi­ciary spend­ing at 340B hos­pi­tals was $144, com­pared with about $60 at hos­pi­tals not in the pro­gram.

“This in­di­cates that, on av­er­age, ben­e­fi­cia­ries at 340B dis­pro­por­tion­ate-share hos­pi­tals were ei­ther pre­scribed more drugs or more ex­pen­sive drugs than ben­e­fi­cia­ries at the other hos­pi­tals in GAO’s anal­y­sis,” the watchdog agency said.

Hos­pi­tal groups ques­tioned how GAO came up with its re­sults. They ar­gued that the re­port didn’t take into ac­count that 340B hos­pi­tals may see sicker pa­tients than other hos­pi­tals, and they said the GAO may have un­fairly ig­nored other rea­sons for the higher spend­ing, in­clud­ing that pa­tients in non-340B hos­pi­tals more fre­quently re­ceive drugs out­side of hos­pi­tals.

“We’re sur­prised not only by the lack of ev­i­dence and data for GAO’s con­clu­sions and rec­om­men­da­tions, but also by its sug­ges­tion that physi- cians in our na­tion’s es­sen­tial hos­pi­tals would ig­nore pa­tient needs to en­rich hos­pi­tals,” Dr. Bruce Siegel, CEO of Amer­ica’s Es­sen­tial Hos­pi­tals, said in a writ­ten state­ment.

Tom Nick­els, a se­nior vice pres­i­dent at the Amer­i­can Hos­pi­tal As­so­ci­a­tion, agreed. “Sim­ply put, the GAO re­port misses the mark,” he said.

A 340B hos­pi­tal group called 340B Health said the GAO’s study “only ex­am­ined av­er­age dif­fer­ence in per­ben­e­fi­ciary spend­ing by hos­pi­tal type, and did not ex­am­ine any pa­tient dif­fer­ences in terms of out­comes or qual­ity.”

The GAO stood by its method­ol­ogy. Spokesman Chuck Young said that af­ter care­fully ex­am­in­ing sev­eral fac­tors that could af­fect Part B drug spend­ing, in­clud­ing higher shares of low-in­come pa­tients, his agency still found sub­stan­tial dif­fer­ences in spend­ing for 340B hos­pi­tals.

There were 1,039 dis­pro­por­tion­ate­share hos­pi­tals par­tic­i­pat­ing in the 340B Pro­gram as of May 31, 2013, ac­cord­ing to con­gres­sional data. The pro­gram has been around since 1992 but was ex­panded when the Af­ford­able Care Act al­lowed more providers to be­come el­i­gi­ble for the dis­count. The num­ber of par­tic­i­pants tak­ing ad­van­tage of the dis­counts has since grown sub­stan­tially.

The GAO re­port said over­pre­scrib­ing may be the way 340B hos­pi­tals “max­i­mize” Medi­care rev­enue. “While hos­pi­tals may be fi­nan­cially ben­e­fit­ing … this poses po­ten­tially se­ri­ous con­se­quences to the Medi­care pro­gram and its ben­e­fi­cia­ries,” it said.

The watchdog agency sug­gested Congress con­sider elim­i­nat­ing the in­cen­tive to pre­scribe more drugs, or more-ex­pen­sive drugs, than nec­es­sary to treat Medi­care ben­e­fi­cia­ries at 340B hos­pi­tals.

Safety net providers and clin­ics that par­tic­i­pate in the 340B pro­gram are sched­uled to meet this week in Washington to ad­dress crit­i­cisms from drug­mak­ers and oth­ers of the dis­count pro­gram.

An anal­y­sis re­leased last year by Avalere Health and spon­sored by the drug in­dus­try-backed ad­vo­cacy group Al­liance for In­tegrity and Re­form, found that about two-thirds of 340B hos­pi­tals pro­vide less char­ity care than the av­er­age U.S. hos­pi­tal, with char­ity care mak­ing up 1% or less of to­tal costs at a quar­ter of those fa­cil­i­ties.

An anal­y­sis con­ducted by the Berke­ley Re­search Group found that drug pur­chases made at the 340B price rose from $1.1 bil­lion in 1997 to more than $7 bil­lion by 2013, with pro­jec­tions of reach­ing more than $16 bil­lion by 2020.

On the other hand, an anal­y­sis in May by healthcare con­sult­ing firm Dob­son Da­Vanzo & As­so­ci­ates found that 340B hos­pi­tals pro­vided nearly twice as much care to Med­i­caid and low-in­come Medi­care ben­e­fi­cia­ries as did hos­pi­tals not in the pro­gram.

The HRSA es­ti­mated the pro­gram saved providers about $3.8 bil­lion in drug costs in 2013.

“We’re sur­prised not only by the lack of ev­i­dence and data for GAO’s con­clu­sions and rec­om­men­da­tions, but also by its sug­ges­tion that physi­cians in our na­tion’s es­sen­tial hos­pi­tals would ig­nore pa­tient needs to en­rich hos­pi­tals.” Dr. Bruce Siegel CEO Amer­ica’s Es­sen­tial Hos­pi­tals

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