GAO Report Calls for More Oversight of 340B Hospital Eligibility

A recent report from the Government Accountability Office (GAO) published Jan. 10, 2020, calls on the Health Resources and Services Administration (HRSA) to improve processes to reasonably assure that participating non-governmental hospitals meet 340B Drug Pricing Program eligibility requirements.

The 340 Drug Pricing Program (340B Program) is administered by the U.S. Department of Health and Human Services' (HHS) Health Resources and Services Administration (HRSA). Under the 340B Program, certain hospitals and other qualified entities that care for many low-income and uninsured individuals receive discounted prices on outpatient drugs from drug manufacturers. About two-thirds of hospitals participating in the 340B Program (approximately 1,700) are non-governmental hospitals (i.e., private, nonprofit hospitals).

The GAO makes several recommendations for achieving greater oversight of hospital eligibility. Among these, the report recommends that HRSA:

• Implement a process to verify that all non-governmental hospitals have contracts in place, including throughout hospitals’ audit periods;
• Amend its contract reviews to include an assessment of whether contracts meet statutory requirements;
• Provide better guidance on contract reviews.

HHS agreed with all of the GAO’s recommendations except the recommendation to implement a process to verify that all non-governmental hospitals have contracts in place. HHS says that HRSA does not have the resources to carry out the recommended verification process and it would over-burden the agency.

Read the full report.
Read GAO recommendations.