Dataset Information

Impact of the 340B Drug Pricing Program on Cancer Care Site and Spending in Medicare.

ABSTRACT: OBJECTIVE:To examine the impact of the 340B drug discount program on the site of cancer drug administration and cancer care spending in Medicare. DATA SOURCES/STUDY SETTING:2010-2013 Medicare claims data for a random sample of Medicare Fee-for-Service beneficiaries with cancer. STUDY DESIGN:We identified the 340B effect using variation in the availability of 340B hospitals across markets. We considered beneficiaries from markets that newly gained a 340B hospital during the study period (new 340B markets) as the treatment group. Beneficiaries in markets with no 340B hospital were the control group. We used a difference-in-differences approach with market fixed effects. DATA COLLECTION:Secondary data analysis. PRINCIPAL FINDINGS:The probability of a patient receiving cancer drug administration in hospital outpatient departments (HOPDs) versus physician offices increased 7.8 percentage points more in new 340B markets than in markets with no 340B hospital. Per-patient spending on other cancer care increased $1,162 more in new 340B markets than in markets with no 340B hospital. CONCLUSIONS:The 340B program shifted the site of cancer drug administration to HOPDs and increased spending on other cancer care. As the program expands, continuing assessment of its impact on service utilization and spending would be needed.

SUBMITTER: Jung J

PROVIDER: S-EPMC6153182 | biostudies-literature | 2018 Oct

REPOSITORIES: biostudies-literature

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Impact of the 340B Drug Pricing Program on Cancer Care Site and Spending in Medicare.

Jung Jeah J Xu Wendy Y WY Kalidindi Yamini Y

Health services research 20180122 5

<h4>Objective</h4>To examine the impact of the 340B drug discount program on the site of cancer drug administration and cancer care spending in Medicare.<h4>Data sources/study setting</h4>2010-2013 Medicare claims data for a random sample of Medicare Fee-for-Service beneficiaries with cancer.<h4>Study design</h4>We identified the 340B effect using variation in the availability of 340B hospitals across markets. We considered beneficiaries from markets that newly gained a 340B hospital during the ...[more]

PMID: 29355925

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Project description:BackgroundThe 340B Drug Pricing Program entitles qualifying hospitals to discounts on outpatient drugs, increasing the profitability of drug administration. By tying the program eligibility of hospitals to their Disproportionate Share Hospital (DSH) adjustment percentage, which reflects the proportion of hospitalized patients who are low-income, the program is intended to expand resources for underserved populations but provides no direct incentives for hospitals to use financial gains to enhance care for low-income patients.MethodsWe used Medicare claims and a regression-discontinuity design, taking advantage of the threshold for program eligibility among general acute care hospitals (DSH percentage, >11.75%), to isolate the effects of the program on hospital-physician consolidation (i.e., acquisition of physician practices or employment of physicians by hospitals) and on the outpatient administration of parenteral drugs by hospital-owned facilities in three specialties in which parenteral drugs are frequently used. For low-income patients, we also assessed the effects of the program on the provision of care by hospitals and on mortality.ResultsHospital eligibility for the 340B Program was associated with 2.3 more hematologist-oncologists practicing in facilities owned by the hospital, or 230% more hematologist-oncologists than expected in the absence of the program (P=0.02), and with 0.9 (or 900%) more ophthalmologists per hospital (P=0.08) and 0.1 (or 33%) more rheumatologists per hospital (P=0.84). Program eligibility was associated with significantly higher numbers of parenteral drug claims billed by hospitals for Medicare patients in hematology-oncology (90% higher, P=0.001) and ophthalmology (177% higher, P=0.03) but not rheumatology (77% higher, P=0.12). Program eligibility was associated with lower proportions of low-income patients in hematology-oncology and ophthalmology and with no significant differences in hospital provision of safety-net or inpatient care for low-income groups or in mortality among low-income residents of the hospitals' local service areas.ConclusionsThe 340B Program has been associated with hospital-physician consolidation in hematology-oncology and with more hospital-based administration of parenteral drugs in hematology-oncology and ophthalmology. Financial gains for hospitals have not been associated with clear evidence of expanded care or lower mortality among low-income patients. (Funded by the Agency for Healthcare Research and Quality and others.).

Project description:ImportanceCritics of the federal 340B Drug Pricing Program raised concerns that the program might provide financial incentives for participating hospitals to prescribe more and/or more expensive drugs because the revenue generated from Medicare reimbursement exceeds the purchase price by a substantial margin. Studies showing higher Medicare Part B drug spending at hospitals that are 340B hospitals, which can purchase outpatient drugs from manufacturers at discounted prices, compared with non-340B hospitals were used by the Centers for Medicare & Medicaid Services to justify their 340B payment policy that reduced Medicare payments for drugs in the 340B program in 2018 and thereafter. The Centers for Medicare & Medicaid Services attributed higher spending to the 340B benefit and believed that payment cuts would reduce the financial incentives associated with higher spending. However, the lack of sufficient risk adjustments is a significant concern of study validity.ObjectiveTo examine whether per-beneficiary Medicare Part B drug spending is significantly different between 340B and non-340B hospitals while adequately controlling for patient-level and hospital-level risk factors.Design, setting, and participantsA cross-sectional study was conducted from October 1, 2020, to May 30, 2021, using 2017 administrative claims data from a random 5% sample of Medicare fee-for-service beneficiaries. Included beneficiaries had at least 1 separately payable non-pass-through drug claim in 2017, were fully enrolled in Part A and Part B through 2017, and did not die in 2017.Main outcomes and measuresThe outcome was separately payable Part B drug spending.ResultsThe sample included 35 364 beneficiaries (21 825 women [61.7%]; 29 996 White patients [84.8%]; mean [SD] age, 70.6 [12.0] years) and 2446 hospitals. A total of 918 hospitals (37.5%) were in the 340B program and 938 hospitals (38.3%) were teaching hospitals. There was a higher percentage of teaching hospitals among 340B hospitals (517 of 918 [56.3%]) than non-340B hospitals (421 of 1528 [27.6%]), and beneficiaries who went to 340B hospitals were more likely to be non-White than those who went to non-340B hospitals (3360 of 19 139 [17.6%] vs 1583 of 13 710 [11.5%]). The Part B drug spending difference between 340B and non-340B hospitals was not statistically significant after controlling for beneficiary-level risk factors and hospital-level characteristics ($568; 95% CI, -$283 to $1419; P = .19).Conclusions and relevanceThe results 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.

Project description:ImportanceThe federal 340B program lowers the acquisition cost of prescription drugs and places no limits on what hospitals charge payers. Congress established the program to allow 340B profits (the difference between payments and acquisition costs) to subsidize other safety-net services. Little is known about the magnitude of revenues and profits from the 340B program among participating hospitals.ObjectiveTo report revenues and estimated profits from the 340B program that hospitals collect from Medicare and Medicare beneficiaries for outpatient clinic administration of prescription drugs covered under Medicare Part B.Design, setting, and participantsThis cross-sectional descriptive study used 100% Medicare outpatient Part B claims from January 1, 2013, to December 31, 2016, from fee-for-service Medicare beneficiaries administered separately payable drugs at general acute care nonprofit or public hospitals without special payment designations. Claims data (N?=?11?298?860) were aggregated to the hospital-year level (N?=?6000) and linked to hospital finances and 340B participation from Medicare cost reports and the 340B covered entity list.Main outcomes and measuresOutcomes studied were revenue and estimated profits, assuming a 50% discount from 340B-discounted drug administrations to Medicare patients, as well as Medicare 340B profits relative to hospital net operating revenue, uncompensated care, and disproportionate share hospital payments.ResultsDuring the study period, hospitals received approximately $2.1 billion in 340B revenue from Medicare in 2013, increasing to $3.7 billion in 2016. Estimated 340B profits from Medicare in 2016 totaled $1.9 billion, and per-hospital estimated 340B profits were $2.5 million but exhibited variability (median, $0.8 million; interquartile range, $0.1 million-$2.8 million). In 2016, median estimated 340B profits from Medicare were 0.3% (interquartile range, 0.1%-0.7%; mean, 0.4%) of hospital operating budgets and 9.4% (interquartile range, 1.8%-26.5%; mean, 16.6%) of hospital uncompensated care costs.Conclusions and relevanceEstimated profits that hospitals derived from administering 340B-discounted drugs to Medicare patients are small compared with operating budgets yet substantial compared with uncompensated care costs for many hospitals. Revenue and profit estimates from 340B-discounted drugs represent a lower bound because data on revenue from the sale of outpatient retail dispensed drugs by hospital contract pharmacies and commercial insurer claims are not available.

Project description:BackgroundHealth care providers who participate as an accountable care organization (ACO) in the voluntary Medicare Shared Savings Program (MSSP) have incentives to lower spending for Medicare patients while achieving high performance on a set of quality measures. Little is known about the extent to which early savings achieved by ACOs in the program have grown and been replicated by ACOs that entered the program in later years. ACOs that are physician groups have stronger incentives to lower spending than hospital-integrated ACOs.MethodsUsing fee-for-service Medicare claims from 2009 through 2015, we performed difference-in-differences analyses to compare changes in Medicare spending for patients in ACOs before and after entry into the MSSP with concurrent changes in spending for local patients served by providers not participating in the MSSP (control group). We estimated differential changes (i.e., the between-group difference in the change from the pre-entry period) separately for hospital-integrated ACOs and physician-group ACOs that entered the MSSP in 2012, 2013, or 2014.ResultsMSSP participation was associated with differential spending reductions in physician-group ACOs. These reductions grew with longer participation in the program and were significantly greater than the reductions in hospital-integrated ACOs. By 2015, the mean differential change in per-patient Medicare spending was -$474 (-4.9% of the pre-entry mean, P<0.001) for physician-group ACOs that entered in 2012, -$342 (-3.5% of the pre-entry mean, P<0.001) for those that entered in 2013, and -$156 (-1.6% of the pre-entry mean, P=0.009) for those that entered in 2014. The corresponding differential changes for hospital-integrated ACOs were -$169 (P=0.005), -$18 (P=0.78), and $88 (P=0.14), which were significantly lower than for physician-group ACOs (P<0.001). Spending reductions in physician-group ACOs constituted a net savings to Medicare of $256.4 million in 2015, whereas spending reductions in hospital-integrated ACOs were offset by bonus payments.ConclusionsAfter 3 years of the MSSP, participation in shared-savings contracts by physician groups was associated with savings for Medicare that grew over the study period, whereas hospital-integrated ACOs did not produce savings (on average) during the same period. (Funded by the National Institute on Aging.).

Dataset Information

Impact of the 340B Drug Pricing Program on Cancer Care Site and Spending in Medicare.

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Impact of the 340B Drug Pricing Program on Cancer Care Site and Spending in Medicare.

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