How to Leverage 340B for Hospitals – Part One

What is 340B?

This video is the first in a series on how to leverage the 340B program. 

Let’s talk about a program that is often managed behind the scenes by our healthcare organizations and makes a profound impact on our communities.

340B is a federal drug discount program that was signed into law in 1992 as part of the Public Health Service Act under section 340B. The purpose of the 340B discount is to help our safety-net health care providers stretch scarce federal resources to reach more eligible patients, and provide more comprehensive services to low-income, Medicaid, rural, underinsured, or uninsured patient populations. The program enables healthcare organizations to accomplish their mission of providing health care to all regardless of their ability to pay.

How is 340B Funded?

340B is not funded by taxpayer dollars. Instead, drug manufacturers that participate in Medicaid and Medicare Part B programs are required to make available substantial discounts on drug items purchased by 340B registered covered entities. Impact reports created by 340B covered entities often refer to how these health care organizations rely on 340B savings to keep their doors open and their facilities staffed.

The list of 340B-eligible entities and organizations includes Federally Qualified Health Centers (FQHC), FQHC look-alikes, children’s hospitals, critical access hospitals, free-standing cancer hospitals, sole community hospitals, disproportionate share hospitals, rural referral centers, specialized clinics such Black Lung/Tuberculosis/STD, and the Ryan White HIV/AIDS program grantees, among others. Each of these entity types has different criteria and different qualifications they need to meet in order to register and participate in the program.

Check out our free e-book, The Complete Guide to Maximizing Pharmacy Benefits for Hospitals, to learn more about 340B and other best practice strategies to help your hospital clients lower their pharmacy benefits costs.

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