FOR IMMEDIATE RELEASE
December 14, 2022 CEO of Bon Secours Mercy Health Pressed to Commit Profits from 340B Federal Program to Low-Income Communities it ServesRichmond, Va – Bon Secours Mercy Health (BSMH) is facing mounting pressure to respond to charges that it misuses a federal drug pricing program intended to serve poor communities. A community action group – Richmond Coalition for Health Equity – has written to BSMH’s Cincinnati-based CEO, John Starcher, urging that he issue a statement committing to reinvest all Richmond-area profits earned through the federal 340B discounted drug pricing program into low-income communities, and pledging full transparency on the usage of the 340B program. This follows an investigative story by the New York Times, and additional in-depth reporting by the Richmond Times-Dispatch, revealing questionable practices relating to how BSMH uses Richmond Community Hospital (RCH), located in Richmond’s impoverished East End neighborhood, to generate millions of dollars in profits through 340B and then diverts that money for other purposes. The investigations show how BSMH: - Violated the intent of Section 340B of the federal Public Health Services Act, which requires pharmaceutical manufacturers that participate in Medicaid to provide drugs at significant discounts to non-profit health care providers – such as Richmond Community Hospital – that serve low-income patients and communities.
- Exploited the 340B program to generate enormous profits at Richmond Community Hospital – $110 million in 2020 alone – making RCH the most profitable hospital in Virginia.
- Transferred $48 million from RCH to BSMH headquarters in Cincinnati between 2015 and 2019, treating those funds as internal charges for “shared” or “back office” services that were maximized by basing them on the hospital’s 340B-fueled revenues and profits.
- Cut key services at RCH at the same time the hospital was earning record profits and paying those internal charges.
- Invested heavily in expanding in wealthier areas while cutting services at RCH.
BSMH’s use of 340B in this way has been described as "unacceptable" by the late Rep. Don McEachin, "troubling" by Sen. Tim Kaine, and "disheartening" by Sen. Mark Warner. Richmond Mayor Levar Stoney has called for a federal investigation.
“To learn that many millions of dollars – which means resources and services in a community that has historically not had much – are apparently being siphoned away, is devastating,” said Bryce Robertson, a member of the group. “With its very large presence in Richmond, and its stature as the fifth-largest Catholic health system in the country, Bon Secours Mercy Health can turn this problem into an opportunity to make a powerful, holiday-season statement about itself and Catholic health care in general. Simply put, we are asking CEO Starcher to do the right thing.”
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RESOURCES:
Richmond Coalition for Health Equity webpage News Articles:
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