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Statement from Carolinas Medical Center

Carolinas HealthCare System

Executive Summary of Response to Inquiry from Senator Grassley

Carolinas Medical Center (“CMC”) received an inquiry on September 28, 2012, from Senator Charles Grassley regarding its participation in the 340B program. We submitted our response to his office in a timely manner on October 12, 2012.

In our response, we assured Senator Grassley that CMC was an excellent steward of the 340B program, and that the 340B savings are used to benefit those in need. CMC is one of the largest public safety net hospitals in the region, and qualifies for the 340B program with a Medicare disproportionate share hospital (“DSH”) adjustment percentage of 23.57% in 2011, more than double the required amount. We described how CMC operates multiple outpatient community clinics that offer a wide-range of services at little or no cost to uninsured and Medicaid patients, supported in part by the 340B program.

These outpatient community clinics handled more than 273,000 patient visits in 2011 and serve as valuable medical homes for some of the most at-risk members of the community.

CMC also maintains the region’s only behavioral health emergency department, filling a critical gap in the State’s dwindling mental health network. Because of the 340B program, we are able to dispense expensive mental health drugs at a lower cost to the

patient.

We also stressed to Senator Grassley that CMC upholds the intent and design of the 340B program by using 340B savings to help lower outpatient drug prices for the poor and uninsured. We explained that CMC passes the 340B savings on to community clinic patients by charging only $0-$10 for prescriptions dispensed from the community clinic in-house pharmacies. CMC does not raise the prices, even though the in-house pharmacies operate at an annual deficit of $9.8 million. We also pointed out that CMC provides important pharmaceutical counseling services to patients, which has had a proven impact on lowering emergency room visits and hospitalizations. 340B savings have also helped increase access to cancer infusion centers for the poor and uninsured.

It has been CMC’s longstanding mission to provide access to high quality services for all patients, regardless of their ability to pay. The information and data provided to Senator Grassley establish CMC’s role as a valuable community health care provider, and confirm that CMC uses the savings from the 340B program to maintain and expand access to quality clinical and pharmaceutical services for the poor and uninsured.

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