340B good stewardship principles

During 2018 under the retail 340B program, the hospital achieved discounted savings of $2,142,150 compared to $1,489,474, the prior year. In addition to the retail pharmacy, the hospital is also receiving discounts on purchases for outpatient drugs. To receive the discount, the patient must meet a list of criteria: must be in the hospital, must be an outpatient and must receive a drug that has been approved under the 340B drug discount program. When a patient is seen at the hospital and receives a qualified drug, the hospital reports that information to the vendor who provides a discount on the drug purchased. Currently, the hospital is achieving a discount of $385,022 per year on these drugs. The discounts range from 25% to 50% off of the listed purchase price.

Together the 340B program benefitted the hospital $2,527,172 in 2018. The proceeds have helped to alleviate the amount of community benefit the hospital provides per year and to protect services the hospital provides.

Medi-Cal Loss
Charity Care
Sequestration
Total

2018 Community benefit

2018 Review

$9,778,219
$478,268
$133,631
$10,390,118

FAIRCHILD MEDICAL CENTER 340B PARTICIPATION

Fairchild Medical Center is a non-profit, Critical Access Hospital (CAH), and  provides care to a signficant number of patients who are low-income and covered by Medicare and Medi-Cal (Medicaid).  As a non-profit CAH, Fairchild Medical Center receives savings as part of the 340B program, which the US Congress report states is intended, “to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”

Fairchild Medical Center provides care to persons covered by governmental programs at below cost. Recognizing its mission to the community, services are provided to both MediCare and MediCal patients. The Hospital realized MediCal/CMSP payments below the cost the hospital incurs to provide the service of $9,778,219. To the extent reimbursement is below cost, Fairchild Medical Center recognizes these amounts as a service to the community in meeting its mission.


The Hospital maintains a Charity Care Policy which defines how partial and/or full charity care will be based on the individual’s ability to pay as defined by Federal Poverty Income Guidelines utilizing a sliding scale. Confidentiality of information and the individual’s dignity are paramount.

Charity Care is also provided through many reduced price services and free programs offered throughout the year based on activities and services which Fairchild Medical Center believes will serve a bona fide community health need. These include:

Free care for patients who are financially unable to pay for services in total or services in excess of private insurance reimbursement. During 2018, total charges written off for Charity Care were $478,268 with a cost associated with charity at $203,764 to a primary service area a little over 24,000 people.

Fairchild Medical Center currently has Medicare reimbursement reduced 2% to an amount below cost. In 2018, reimbursement was reduced $133,631.

SERVICE LINES

The hospital started in the 340B program in 2013 and the hospital was able to open a dental clinic that serves Denti-Cal adult and pediatric patients in 2015. Prior to opening this service, pediatric patients had to travel up to several hundred miles to receive care.

Many rural hospitals across the country are closing their Labor and Delivery units forcing young mothers to travel much greater distances to deliver their babies. The greater distance traveled puts both mother and baby at greater potential for difficulties. The low volume, high cost and low reimbursement have made it very difficult to maintain a positive bottom line for this service. Fairchild Medical Center delivered 211 babies in 2018.

Scaling back the 340B Program would threaten Fairchild Medical Center’s capacity to offer the services described above to our patients.

IMPACT OF SCALING BACK 340B