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Report Finds Increasing Number of 340B Hospitals Provide Minimal Charity Care

May 13, 2016
A new report released yesterday by the Alliance for Integrity and Reform of 340B (AIR340B), of which BIO is a member, found a dramatic decline in charity care provided by 340B hospitals in 2014, which was the first year of coverage expansion under the Affordable Care Act. The report found that over a third (37 percent) provided charity care representing less than 1 percent of total patient costs – far higher than the 24 percent of hospitals with that low level of charity care in 2011.

Other key findings from the report, which looked at fiscal year 2014 Medicare cost reports, include:

  • The national average level of charity care for both 340B hospitals and non-340B hospitals dropped from 3.3 percent to 2.2 percent from 2011 to 2014.

  • In total, 64 percent of 340B hospitals provide less charity care than the national average for all hospitals, including for-profit hospitals.

  • Similar to the results from Avalere’s previous analysis, a small number of 340B hospitals account for the bulk of overall charity care. Namely, about one in four (24 percent) 340B hospitals are providing 80 percent of all charity care delivered by 340B hospitals, even though these hospitals account for less than half (45 percent) of all 340B hospital beds.

A potential reason noted in the report for the increase in low charity care levels is the ACA's expansion of insurance coverage and Medicaid. While more Americans have become insured, 340B's eligibility criteria have not been updated to align with the program's goal of offering targeted assistance to entities serving as true safety-net care providers for vulnerable or uninsured patients. As a result, an increasing number of hospitals are qualifying for the 340B program as their share of Medicaid patients rises, while providing dismal levels of charity care for the populations the program was intended to service.

Read the full report here.