Association of Beneficiary-Level Risk Factors and Hospital-Level Characteristics With Medicare Part B Drug Spending Differences Between 340B and Non-340B Hospitals

Abstract

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. OBJECTIVE To 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. RESULTS The 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

Comparison of Generic Prescribing Patterns Among 340B-Eligible and Non-340B Prescribers in the Medicare Part D Program

“…We observed variation in both directions at the therapeutic class level, but we found no evidence that 340B-eligible prescribers were systematically overprescribing brand-name drugs to generate revenue. This variation may result from differences in patient health status across 340B-eligible and non-340B prescribers, as 340B-eligible patients with Medicare are more likely to be dual eligible and/or disabled . Variation may also be more present in classes with lower overall utilization, as the highest-use class, cardiovascular agents, saw near-equal generic prescribing rates.…”

“…This variation may result from differences in patient health status across 340B-eligible and non-340B prescribers, as 340B-eligible patients with Medicare are more likely to be dual eligible and/or disabled. 3 Variation may also be more present in classes with lower overall utilization, as the highest-use class, cardiovascular agents, saw near-equal generic prescribing rates. Limitations of this study include possible errors in data matching and class-level aggregation that may have obscured prescribing variation for specific conditions.…”

“…If true, this could increase patient cost sharing and result in higher overall prescription drug spending. Prior analysis found no difference in Medicare Part B drug spending across 340B and non-340B institutions, but to our knowledge, no analysis has been performed in the Medicare Part D market. In this cross-sectional study, we examine generic prescribing patterns for 2020 among 340B-eligible and non-340B clinicians in the Medicare Part D program to assess whether 340B revenue incentives may influence prescribing.…”

Errors in Methods

“…In the first sentence of the second paragraph and the first sentence of the sixth paragraph of the “Statistical Analysis” subsection of the Methods section, “multivariate regression” should be changed to “multiple regression.” This article has been corrected. 1 …”

“…In the Original Investigation titled “Association of Beneficiary-Level Risk Factors and Hospital-Level Characteristics With Medicare Part B Drug Spending Differences Between 340B and Non-340B Hospitals,” published February 18, 2022, there were errors in the Methods section. In the first sentence of the second paragraph and the first sentence of the sixth paragraph of the “Statistical Analysis” subsection of the Methods section, “multivariate regression” should be changed to “multiple regression.” This article has been corrected …”