Minnesota nonprofit hospitals generating fortune off of government program spent millions overseas
Minnesota nonprofit hospitals generated at least $1.34 billion in net revenue from the federal 340B drug discount program in 2024, more than double the previous year's reported amount, according to a state health department report. Despite being tax-exempt institutions meant to serve low-income populations, these hospitals collectively spent millions of dollars overseas, including in offshore accounts across the Caribbean, Central America, and Europe. State auditors noted significant gaps in data reporting, particularly around high-cost, office-administered drugs, raising concerns about transparency and accountability in how 340B revenues are used.
- ▪Minnesota nonprofit hospitals generated at least $1.34 billion in net revenue from the 340B program in 2024, more than double the $630 million reported in 2023.
- ▪The 340B program allows hospitals to buy drugs at discounted prices and bill commercial insurers and patients at full price, with no federal or state requirements on how the resulting revenue is spent.
- ▪State auditors found that approximately 12% of providers only reported data on dispensed drugs and omitted office-administered drugs, leading to incomplete revenue reporting.
- ▪Despite legislative efforts to improve transparency, many providers failed to fully comply with reporting requirements for all 340B-related reimbursements, including those for high-cost in-clinic treatments.
- ▪The Minnesota Department of Health expressed concern over its inability to accurately trace reimbursements for office-administered drugs, which are typically more expensive than retail-dispensed medications.
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Tax-exempt hospitals in Minnesota that have raked in large sums of revenue from a government safety net program spent tens of millions of dollars overseas over the past fiscal year, raising alarm among watchdogs monitoring the flow of cash in the nonprofit healthcare sector. Minnesota-based hospitals funded by 340B, a federal drug discount program that has drawn concerns from conservatives, together generated at least $1.34 billion in net revenue through the program’s reimbursement system in 2024, according to a February report from the Minnesota Department of Health.
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