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$86M: How One Hospital Will Get Massive 340B Payout

Analysis  |  By Amanda Norris  
   October 25, 2023

The Hospital of the University of Pennsylvania is in line to receive $86 million from the 340B drug program settlement.

Stemming from a legal settlement resolving cuts made to the 340B drug pricing program, the Hospital of the University of Pennsylvania is set to receive a massive payout.

The disbursement amounts to the sixth-largest payout to any hospital in the nation, and accounts for the bulk of the $129.2 million coming to the University of Pennsylvania Health System, according to CMS.

The Philadelphia Inquirer reported on the payout and says the settlement effectively addresses past reductions in the program for the hospital. 

The Pennsylvania hospital says that under the program, it saved $717 million in the year that ended June 30 and it is using some of those savings to help pay for $17.8 million in unreimbursed care in emergency departments, according to the Inquirer.

This comes on the heels of CMS’ announcement earlier this year that it would pay eligible hospitals $9 billion in a lump sum payment under a proposed remedy for the “unlawful” 340B payment cuts.

Robin Damschroder, the CFO for Henry Ford Health, recently shared with HealthLeaders the impact that these payments have on hospitals.

"Henry Ford Health system and a lot of folks rely on 340B discounts and other mechanisms like disproportionate share payments. We're a big teaching institution, so a lot of these special payments that we do in order to teach the healthcare leaders of the future or make sure that we can take care of vulnerable patients are extremely important," Damschroder said.

"So that is an area that we and others are actively—in our advocacy—ensuring that these programs stay intact or evolve to a place that enhances the programs for the people that were trying to care for," said Damschroder.

Cheryl Sadro, the CFO for UC Davis Health, and Tammy Trovatten, the director of government reimbursement for UC Davis Health, also connected with HealthLeaders to discuss the financial impact of these 340B payments.  

One of the things we've been watching and will continue to watch through this process is where we go from here with 340B. We're the only level one trauma center in a multicounty area, and between 340B trauma and transplant, we've garnered a large portion of our bottom line,” Sadro said.


Amanda Norris is the Director of Content for HealthLeaders.


CMS is paying a $9 billion lump sum for its “unlawful” 340B payment cuts.

$86 million of it is set to go to the Hospital of the University of Pennsylvania.

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