AHA: GAO report on 340B program misses the mark

The AHA July 7 sharply criticized a Government Accountability Office (GAO) report examining Medicare Part B spending at disproportionate share hospitals (DSH) participating in the 340B Drug Pricing Program.

The report “draws unsubstantiated conclusions about a program that has a proven track record of improving access to care for poor patients and vulnerable communities," wrote AHA Senior Vice President Tom Nickels in an AHASTAT blogpost. “Simply put, the GAO report misses the mark.”

The GAO’s July 6 report said hospitals that participate in the program are either prescribing more drugs or more expensive drugs to their Medicare Part B patients compared to hospitals that don’t qualify for the program.

In his blog post, Nickels noted that the Department of Health and Human Services expressed its concerns about GAO’s methodology. The department said GAO’s conclusion was not supported by its analysis.

When examining Medicare Part B spending per beneficiary at 340B DSH hospitals, Nickels said, “GAO does not adequately account for differences in patients’ health status or outcomes.” In addition, he said the report does not appropriately account for certain differentiating factors and characteristics of 340B DSH hospitals, including their negative 10% outpatient Medicare margins in 2012 and the large percentage of uncompensated care they provide.

In its 340B advocacy, the AHA has pointed out that the program is small but offers big benefits.  

It accounts for only 2% of the $325 billion in annual drug purchases made in the U.S. 

To qualify for the program, hospitals must serve a large proportion of uninsured or low-income patients. These include certain DSH hospitals, children’s hospitals, critical access hospitals, rural referral centers, sole community hospitals and cancer hospitals.