A Minnesota requirement for covered entities to submit data on the costs they pay and the payments they receive for 340B drugs yielded its first annual report this past November. Today’s guest, Minnesota Hospital Association Director of State Government Relations Danny Ackert, tells us why the report’s findings don’t tell the whole story.

The Context for the Dollars

The first Minnesota report concluded that covered entities received a net of $630 million in payments for 340B drugs in 2023 and paid $120 million to contract pharmacies and third-party administrators. But Ackert notes the figures do not account for what entities would have paid for drugs at non-340B prices, nor what pharmacy administrative costs they would have had if they did not have access to 340B.

Where the Money Goes

Ackert notes that the report does not spell out how hospitals in the state use their 340B savings to stretch resources and provide more care and support to patients. He notes that Minnesota hospitals spend about $15 billion a year providing care. They also face an annual shortfall of about $1.8 billion from Medicare and Medicaid underpayments, a figure that does not even account for charity care, bad debt, and other unreimbursed hospital spending. Some rural hospitals in the state rely on 340B savings just to stay open.

What Other States Can Learn

Although submitting data for the report and countering misconceptions about its findings have been challenging for Minnesota hospitals, Ackert also notes that it has given them an opportunity to educate policymakers about 340B. By learning more about the report and following the state’s example, hospitals in other states considering reporting mandates can put themselves in a position to explain to lawmakers why 340B is so vital.

Resources:

1. Minnesota 340B Covered Entity Report
2. Episode 89: How New 340B Reporting Requirements Are Affecting Hospitals (February 2024)
3. 340B Medicare Hospital Pay Cuts Floated as an Option for Congress