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For Immediate Release
May 11, 2012

Grassley Seeks Answers from Alabama Hospital on Discount Drug Program

WASHINGTON – Sen. Chuck Grassley of Iowa is asking questions about an Alabama hospital’s use of a federal discount drug program after a hospital official appeared to advocate gaming the program to gain eligibility.  The program is meant for the poorest, uninsured patients but is exploding in popularity, raising concerns about program integrity from Grassley, the non-partisan Government Accountability Office, and others.

Grassley wrote to the president of the University of Alabama Hospital at Birmingham after learning of a hospital official’s presentation at a conference that appeared to advocate changing a patient’s status from inpatient to outpatient to become eligible for the discount drug program, among other changes.

In his letter Grassley called the presentation “deeply concerning.”  He wrote, “The recommendation to change an individual’s admissions status or their treatment can have serious health consequences and should be based on a medical determination of what is best for the patient. Altering a patients’ treatment from inpatient to outpatient merely to become 340B eligible not only endangers patients but such action violates the intent of the 340B program.”

Grassley asked a series of questions about the hospital’s participation in the 340B program.  He also asked the Health Resources and Services Administration whether it intends to audit the hospital’s use of the program.  The Government Accountability Office notes an inadequate level of oversight by the Health Resources and Services Administration and a lack of necessary direction on program requirements. The Government Accountability Office found, “the 340B program has increasingly been used in settings, such as hospitals, where the risk of improper purchase of 340B drugs is greater.”

In March, Grassley and three other senators and a member of the House of Representatives asked a wide range of stakeholders for a detailed accounting of how they operate the 340B program.

The text of Grassley’s latest letter is here.