Faced with continuing concerns about rural hospital closures, lawmakers have put forward a series of proposals to revise a federal program designed to maintain life-saving services in small towns across the country.
In Anamosa, Iowa, a town of fewer than 6,000 people more than 900 miles from the nation’s capital, rural hospital director Eric Breesmeister will be closely watching Congress’ next move. Breesmeister’s 22-bed hospital admits an average of seven inpatients a night and, according to its most recent federal report, makes just $95,445 a year in net profit from serving patients.
But Breesmeister isn’t interested in converting the facility into a regional acute care hospital, which would bring in millions of extra dollars each year from the federal government. In exchange for the funding, participating hospitals would keep their emergency departments open but give up inpatient beds.
“It wasn’t meant for us,” said Breesmeister, CEO of UnityPoint Health Jones Regional Medical Center. “I think the program was designed for hospitals that wouldn’t exist without it.”
Nationwide only About 2 dozen Since the program began last year, 10 of the more than 1,500 hospitals covered have become rural acute care hospitals. Meanwhile, rural hospitals continue to close, with 10 having closed since the fix became available.
Federal lawmakers have proposed several legislative solutions since March. One invoiceSenators from Kansas and Minnesota cited a variety of tactics, including allowing older facilities that have been closed to reopen.
another The proposal was submitted Two Michigan lawmakers are introducing legislation in the House of Representatives called the Rural 340B Access Act, which would allow rural acute care hospitals to take advantage of the 340B federal drug discount program enacted by Congress in 1992.
The 340B program, named after the federal law, allows eligible hospitals and clinics to purchase drugs at a discount and then charge insurers, Medicare and Medicaid the market price. The hospitals get to keep a profit from the difference.
Congress approved 340B as an indirect aid measure to help struggling hospitals stay afloat. Many large hospitals say the money is being used for community outreach and charity care, while many smaller hospitals rely on drug discounts to make up for staffing and operational shortfalls.
Currently, emergency hospitals are not eligible for the 340B discount. To release The House proposal would “correct this oversight,” according to Rep. Jack Bergman (R-Mich.). Groups supporting the House bill include the American Hospital Association and the National Rural Health Association.
In Iowa, Brismeister said the 340B federal drug discount program “can be used for very good things.” A small hospital in the city is using 340B funds to subsidize emergency medical services and the uninsured and underinsured patients who frequent the emergency department, he said.
Longtime Republican Sen. Chuck Grassley of Iowa led the push for the rural acute care hospital program into law. His spokeswoman, Gillie Maddox, did not directly answer a question about why the federal law creating the rural acute care hospitals removed the 340B program. Instead, Maddox said the designation was the “product of bipartisan negotiations.”
About 80% of rural hospitals participate in 340B, and about 40% said they derive more than $750,000 in annual revenue from the program, according to a survey conducted by healthcare analytics and consulting firm Chartis in collaboration with the National Rural Health Association.
Sanford Health, a primarily rural health system headquartered in Sioux Falls, South Dakota, has considered converting a handful of smaller critical access hospitals into rural acute care hospitals.
Martha Leclerc, Sanford’s vice president of corporate contracting, said the system analyzed how much revenue would be lost by closing inpatient beds, which are also a requirement of the emergency hospital program, and by not being able to apply for drug discounts.
In the end, the career change “didn’t really make sense,” she said.
While many rural hospitals have been pushing for 340B to be added to the Rural Acute Care Hospital Program, opponents say 340B could be a cash cow for hospitals that don’t adequately care for vulnerable patients.
Nicole Longo, vice president of public affairs for the Pharmaceutical Research and Manufacturers of America, the nation’s largest and most influential pharmaceutical lobbying group, said in a recent blog post that hospital systems and chain pharmacies are “abusing the program” and that patients aren’t benefiting from the program’s expansion.
In an interview, Longo said PhRMA supports rural acute care hospitals’ access to 340B because these hospitals treat “vulnerable patients in underserved areas” and are “true safety net providers.”
She said PhRMA wants to encourage thoughtful conversation about “what types of hospitals should participate in this program.”Last year, PhRMA struck a surprise pact with local medical centers to create the Alliance to Save America 340B Program, or ASAP 340B for short.
“It’s a new era of openness for all stakeholders,” said Vachelia Keyes, vice president of policy and regulatory affairs at the National Association of Community Health Centers.
Provisions of the Patient Protection and Affordable Care Act have led to a surge in the use of drug discount programs. Passed in 2010allowed hospitals and clinics to enter into unlimited contracts with retail pharmacies such as Walgreens and CVS and receive commission in return for dispensing drugs at a discount.
Adam J. Fain, president of the Drug Channel Institute, an industry research organization, reports that the 340B program is the second largest federal drug program after Medicare Part D. The flow of drugs purchased through the 340B program is: It will reach $53.7 billion in 2022.Approximately $9.8 billion Than 2021.
The surge in the use of contract pharmacies has led pharmaceutical companies to limit the drugs they offer at discounted prices. Impact on rural hospitals For example, the president of Lovett Health hospital in Kansas has asked President Joe Biden for help in negotiating with pharmaceutical companies.
Lena Conti, an associate professor of markets, public policy and law at Boston University’s Questrom School of Business, has studied drug discounts for years and said she has “significant concerns about the expansion” of the 340B program.
“There’s a ton of money being generated by this program, but we don’t really know exactly how much it is or who is benefiting from it,” Conti said.
At the same time, Conti, the health economist, said extending federal drug discounts to rural hospitals “makes sense because these are hospitals that serve particularly vulnerable patient populations.”
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