Federal lawmakers have introduced a handful of legislative solutions since March. In one bill<\/a>, senators from Kansas and Minnesota list a myriad of tactics, including allowing older closed facilities to reopen.<\/p>\n Another proposal introduced<\/a> in the House by two Michigan lawmakers is the Rural 340B Access Act. It would allow rural emergency hospitals to use the 340B federal drug discount program, which Congress created in 1992.<\/p>\n The 340B program, named after its federal statute, lets eligible hospitals and clinics buy drugs at a discount and then bill insurance companies, Medicare, or Medicaid at market rates. Hospitals get to keep the money they make from the difference.<\/p>\n Congress approved 340B as an indirect aid package to help struggling hospitals stay afloat. Many larger hospitals say the cash is used for community benefits and charity care, while many small hospitals depend on the drug discounts to help cover staffing and operational shortfalls.<\/p>\n Currently, emergency hospitals are not eligible for 340B discounts. According to a release<\/a> from U.S. Rep. Jack Bergman (R-Mich.), the House proposal would \u201ccorrect this oversight.\u201d Backers of the House bill include the American Hospital Association and the National Rural Health Association.<\/p>\n In Iowa, Briesemeister said the 340B federal drug discount program \u201ccan be used for tremendous good.\u201d The small-town hospital uses money it makes from 340B to subsidize emergency services and uninsured and underinsured patients who frequent the emergency department, he said.<\/p>\n Chuck Grassley, Iowa\u2019s longtime Republican senator, shepherded the Rural Emergency Hospital program into law. His spokesperson, Gillie Maddox, did not respond directly to questions about why the federal law creating rural emergency hospitals omitted the 340B program. Instead, Maddox said the designation was a \u201cproduct of bipartisan negotiations.\u201d<\/p>\n A survey conducted by the health analytics and consulting firm Chartis, along with the National Rural Health Association, found that nearly 80% of rural hospitals had participated in 340B and nearly 40% said they reaped $750,000 or more annually from the program.<\/p>\n Sanford Health, a largely rural health system headquartered in Sioux Falls, South Dakota, considered converting a handful of smaller critical access hospitals into rural emergency hospitals.<\/p>\n Martha Leclerc, vice president of corporate contracting for Sanford, said the system analyzed how much revenue would be lost by closing inpatient beds, which is also a requirement of the emergency hospital program, and by being unable to file for drug discounts.<\/p>\n In the end, she said, switching did not \u201cmake a lot of sense.\u201d<\/p>\n While many rural hospitals are clamoring for the 340B provision to be added to the rural emergency hospital program, opponents have said 340B can be a cash cow for hospitals that don\u2019t serve enough vulnerable patients.<\/p>\n Nicole Longo is deputy vice president of public affairs for the Pharmaceutical Research and Manufacturers of America, the nation\u2019s largest, most influential pharmaceutical lobbying group. She wrote in a recent blog post that hospital systems and chain pharmacies are \u201cexploiting the program\u201d and said patients have not benefited from the growth in the program.<\/p>\n In an interview, Longo said PhRMA supports rural emergency hospitals being able to access 340B because they are treating \u201cvulnerable patients in underserved communities\u201d and are \u201ctrue safety net providers.\u201d<\/p>\n PhRMA, she said, wants to encourage a thoughtful conversation about \u201cwhich types of hospitals should be in the program.\u201d Last year, PhRMA formed an unlikely pact with community health centers to create the Alliance to Save America\u2019s 340B Program, or ASAP 340B.<\/p>\n Vacheria Keys, associate vice president of policy and regulatory affairs at the National Association of Community Health Centers, said, \u201cThere is a new day of openness, from all parties.\u201d<\/p>\n Use of the drug discount program skyrocketed after provisions in the Patient Protection and Affordable Care Act,\u00a0passed in 2010<\/a>, increased the number of hospitals and clinics allowed to contract with an unlimited number of retail pharmacies, such as Walgreens and CVS, which are paid a fee to dispense the discounted drugs.<\/p>\n Adam J. Fein, president of the industry research organization Drug Channels Institute, reports that the 340B program is the second-largest federal drug program, trailing Medicare Part D. The flow of drugs purchased under the 340B program reached $53.7 billion in 2022<\/a>, about $9.8 billion more than in 2021<\/a>.<\/p>\n In response to the exploding use of contract pharmacies, pharmaceutical manufacturers have restricted the drugs they offer at a discount through the pharmacies. That throttling is affecting rural hospitals<\/a> like Labette Health, a Kansas hospital whose president asked President Joe Biden for help in dealing with the pharmaceutical companies.<\/p>\n Rena Conti, an associate professor of markets, public policy, and law at Boston University\u2019s Questrom School of Business, has studied the drug discounts for years and said she has \u201csignificant worries about expanding\u201d the 340B program.<\/p>\n \u201cThere is a lot of money being generated in this program that we really can\u2019t understand exactly how much that really is and exactly who it is benefiting,\u201d Conti said.<\/p>\n At the same time, said Conti, a health care economist, giving rural hospitals access to the federal drug discounts \u201cmakes sense because they are hospitals that are serving particularly vulnerable patient populations.\u201d<\/p>\n KFF Health News<\/a> is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF\u2014an independent source of health policy research, polling, and journalism. Learn more about KFF<\/a>.<\/p>\n![](\"http:\/\/sshop.me\/wp-content\/uploads\/2024\/05\/Briesemeister-resized.jpg\")
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