Federally qualified health centers in Southwest Virginia shut down eight school-based health clinics, prompting the Virginia Community Healthcare Association to ask U.S. Rep. Morgan Griffith, R-Salem, to intervene.
The association, which represents federally qualified health centers across Virginia, sent Griffith a letter Thursday about the closures.
The school clinics extended primary care into communities with limited access to services. They were funded with savings from the federal 340B drug pricing program, which allows qualifying hospitals and clinics serving underserved patients to buy prescription drugs at discounted prices, bill insurers at standard rates, and keep the difference.
According to the association, those savings have helped safety-net providers reinvest in community services, including the school clinics. In her letter, Virginia Community Healthcare Association CEO Tracy Douglas wrote that the Southwest Virginia clinic coalition had generated about $2.7 million in annual 340B savings, but that amount was projected to fall by $400,000 as demand for care rose.
At the same time, lawmakers and regulators have continued to debate changes to the 340B program. After some hospital systems in Virginia and other states were found to have misused the program, state and federal officials spent years considering reforms to increase accountability, limit how 340B funds are used, and change payment structures.
Responses to those proposals have varied among drug companies, pharmacies, hospital systems, and smaller clinics. Outgoing Sen. Bill Cassidy, R-La., recently released draft legislation that federally qualified health centers and other smaller clinics said could harm them by changing reimbursement timelines. President Donald Trump’s administration also continued to pursue regulatory changes that would reduce the program.
“Because of the drama around the effectiveness of the program, we’re forced to have to make tough decisions,” Douglas said in a recent interview.
Douglas said 340B savings had helped cover losses from operating the school-based clinics and said using those funds that way matched the program’s purpose. She also recently joined a roundtable with Gov. Abigail Spanberger, Virginia hospitals, free clinics, state health agencies, and health insurers.
With enhanced Affordable Care Act subsidies expired, and with changes to Medicaid and hospital funding included in the federal reconciliation bill passed last summer, providers warned lawmakers about growing financial pressure. As more Virginians lose or risk losing coverage, providers said demand for health centers, free clinics, and hospital emergency rooms was likely to rise.