JAMA Open Network Analysis: Medicare Part B Drug Spending Differences Between 340B and Non-340B Hospitals

Susan Xu co-authored “Association of Beneficiary-Level Risk Factors and Hospital-Level Characteristics With Medicare Part B Drug Spending Differences Between 340B and Non-340B Hospitals,” which was published on the JAMA Open Network. The results of the study show that the differences in patient population and hospital-level characteristics may explain drug spending differences between 340B and non-340B hospitals, which raises doubt about the financial incentive theory of the 340B program drug discount and the justification for the Centers for Medicare & Medicaid Services’s 340B payment policy.

Question Is per-beneficiary Medicare Part B drug spending significantly different at hospitals that are part of the federal 340B Drug Pricing Program, which can purchase outpatient drugs from manufacturers at discounted prices, compared with hospitals that are not part of the 340B program, after adequate risk adjustments?

Findings In this cross-sectional study that included 35 364 beneficiaries and 2446 hospitals, there was no statistically significant difference in Medicare Part B drug spending between 340B hospitals and non-340B hospitals, after controlling for beneficiary-level risk factors and hospital-level characteristics.

Meaning  These findings raise doubt about the financial incentive theory of 340B program drug discounts and the rationale behind Centers for Medicare & Medicaid Services’ 340B drug payment policy that reduce payment for 340B acquired drugs by 28.5 percent.

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Watch Susan Xu’s comments on her research, published study and findings.