How the 340B Program Impacts the South Broward Hospital District in Florida

Can you believe HRSA’s 340B Program will have its 30^th Anniversary in November? If you haven’t heard of the 340B Program let us share that this program has immensely grown patient access to our services including medications. Without it, our county would have been financially burdened in finding ways to provide care to a vast population.  Since 1992, Congress extended to safety-net hospitals a relief from high drug costs that Congress provided to the Medicaid program with the Medicaid rebate law.  Congress enacted Section 340B of the Public Health Service Act, created under section 602 of the Veterans Health Care Act of 1992.  Section 340B requires pharmaceutical manufacturers to enter into an agreement, referred to as a pharmaceutical pricing agreement (PPA) with the Health & Human Services Secretary in exchange for having their drugs covered by Medicaid and Medicare Part B. Under the PPA the manufacturer agrees to provide a discount on covered outpatient drugs at the time of purchase by covered entities.  These safety-net hospital serve the most vulnerable population in their areas in order “to stretch scare federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”

Memorial Healthcare System is one of the largest 2,020 bed safety-net public hospitals in the State of Florida. Memorial has participated in the 340B Program since 2005. Moving forward to thirteen years later of being part of the 340B Program, Memorial has six Disproportionate-Share hospitals, Level One Trauma Center, Memorial Primary Care clinics, Memorial Cancer Institute, seven contract pharmacy entity owned locations comprised of retail, home infusion, specialty pharmacy, and a Ryan White clinic. 

For Memorial to qualify for the HRSA’s 340B Program, we must serve a significantly disproportionate number of low-income patients and receive payments from the Center for Medicaid and Medicare Services to cover the costs of providing care to uninsured patients.  Per HRSA’s eligibility guidelines, the cost reports must reflect a disproportionate share hospital percentage above 11.75%.

Like most large health systems, service lines are always growing and moving locations. These moves can have large impacts to a 340B Program. It could affect budget projections on drug acquisition cost if not planned appropriately.  It can also create challenges on how to acquire the medications for an area when the location is not yet registered on Office of Pharmacy Affairs & Information Services (OPAIS) as wholesalers look for the 340B registered location prior to creating the requested 340B accounts.  Some of the things to consider, that we’ve been asked when child site registered in the Office of Pharmacy Affairs (OPA) is going to move, are:

1.  Will the department be moving on your Medicare Cost Report (MCR) reimbursable line?
2. Will the new location be identified as a new service line or as an expansion of current services?
3. Will the cost center move also move the dollars with it on your MCR?
4. Will the staff servicing the new location be existing staff?
5. When will you cease operations at the “old” location and begin at the new location?

The 340B Program has opened opportunities to allow Memorial to provide patient and family-centered care. Memorial continues to focus on making Memorial a destination center for a broad range of services.  One example is our ability to deliver comprehensive cardiac care.  All the elements of a destination heart care provider – the tools, the technology, and the expertise- already exist at Memorial Cardiac and Vascular Institute, which means we can provide medical, interventional and surgical treatment for all cardiac diseases.  Memorial continues to offer compassionate care to their patients with healthcare services and access to prescription medications regardless of their ability to pay. Some of the location where we offer care to the community are Memorial Primary Care clinics, Adult and Pediatric Mobile Vans, Long-Acting Therapy Clinic, Behavioral Health Clinic, and Maternal Addiction (Mothers in Recovery). Memorial also has developed many other community services and outreach programs to support and provide healthcare assistance. The pandemic created some unique challenges for how to reach patients safely and we had to innovate.  To assist with food insecurities so many Floridians face every day, Joe DiMaggio Children’s Hospital established a food pantry with the help of a grant from Feeding South Florida and the support of the Lions Club.  Upon discharge, patients or family members can stop at the pantry and fill a reusable grocery bag with healthy foods of their choosing.  COVID-19 didn’t stop Memorial’s H.E.R.O.s (Healthcare Employees Reaching Out) volunteers from giving back. From the annual Back to School Supply Drive, connecting with local seniors virtually who were isolation to stay connected, to dropping off food, cleaning supplies, masks, and other needed items to those in need.

One of the most recent and biggest issues we have been facing since September 2020 is how we can mitigate some loses from the sixteen pharmaceutical manufacturers that are restricting our pharmacies access to 340B Pricing.  We rely on the 340B discount to take care of our patients. These setbacks are crucially impacting patients and their health. We also focus on reviewing all our entity-owned contract pharmacies 340B ineligible claims by auditing them to make sure they meet the criteria of a 340B eligible prescriptions. We have also focused on standardizing our medication use across the system, establishing a Central Service Center for the hospitals, expanding Contract Pharmacy arrangements with outside pharmacies, and partnering with nearby health systems to be their Contract Pharmacy of choice for their patients.

To continue succeeding, Memorial has a robust 340B Team of eight staff members. The Corporate Finance 340B team consists of a Program Director, Supervisor and two Senior Auditors Together they collaborate daily with supply chain, pharmacy, IT, legal, and corporate compliance to meet the demands and compliance of the program, legal challenges and finding ways to expand our opportunity.

As the population continues to grow in South Florida specially being a year-round destination to travelers and those relocating to South Florida, new needs arise, and Memorial continues to assess the needs of our community so that we can provide the care they need.  This is how we can continue to push our mission to Health the body, mind, and spirit of those we touch.

Source: https://www.hrsa.gov/opa/index.html

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