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Hospitals in Non-Expansion States Will Face 340B Challenges

A Bloomberg Government analysis (login required) from Oct. 17 estimates that hospitals that fill a safety net role in states expanding their Medicaid program as part of the Affordable Care Act (ACA) will be more likely to meet eligibility requirements for the 340B Drug Pricing Program than similar hospitals in non-expansion states. The 340B program enables eligible hospitals and other eligible entities to purchase drugs at discounted prices.

The analysis finds that the 340B program is likely to grow in states expanding their Medicaid program because more hospitals will meet 340B program eligibility requirements. As more people become eligible for Medicaid, the number of Medicaid patients a hospital treats will increase, making it easier for the hospital to meet part of the requirement for becoming an eligible 340B entity. The analysis also finds that it will not be as easy for the 340B program to grow in non-expansion states, which presents additional challenges for hospitals that are already facing cuts to other funding sources such as disproportionate share hospital payments.

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