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Understanding the 340B Program

What is the 340B Program?

The 340B prescription drug program was developed for safety-net providers, like CHOC, to help provide critical health services to underserved patients.  The program is narrowly tailored to hospitals that serve low-income individuals or isolated rural communities.

CHOC Hospital’s 340B Story

CHOC Hospital is eligible to participate in the 340B program because we provide care to a disproportionate share of low-income Medi-Cal (Medicaid) patients.  In addition to the high-level services provided inside the hospital, we offer numerous outreach programs serving children and families in the community.  These include several primary and specialty care centers in numerous cities in Orange County and beyond, as well as the CHOC Breathmobile, which brings asthma prevention, diagnosis and education to schools.  CHOC also provides financial assistance to qualifying families and treats all patients regardless of ability to pay.

Benefits of the 340B Program

The 340B program supports our goal of meeting the needs of the community by increasing access to quality pediatric healthcare resources to Orange County families, especially low-income and medically-underserved children. Savings generated from the 340B program enables us to provide vital services to the community at low or no cost, including but not limited to:

  • Behavioral health services, including 18 inpatient mental health beds
  • Bedside discharge prescription services to reduce preventable hospital readmission rates
  • Clinical pharmacy services to patients with serious medical conditions to improve medication adherence and outcomes
  • Subsidies for chemotherapy and other specialty medications for Medicaid and uninsured patients requiring continuation of care
  • Promising new treatments, such as gene therapies and CAR-T cell treatments
  • New programs, including the Thompson Autism Center

340B by the Numbers (Fiscal Year 2019)

$11.6 million – approximate 340B savings, of which $4 million is passed on to the state

$250,000 – approximate cost to run the 340B program

$36 million – average annual uncompensated care (over past three years)

46% – disproportionate share hospital (DSH)* percentage

Congress should preserve and protect the 340B program as an essential part of the safety-net that does not rely on taxpayer dollars.

*DSH hospitals serve a significantly disproportionate number of low-income patients and receive payments from the Centers for Medicaid and Medicare Services to cover the costs of providing services to uninsured patients.