REGIONAL — Rural hospital leaders from across Minnesota gathered at the state Capitol on Tuesday urging House lawmakers to pass legislation they say is critical to keeping small-town hospitals financially viable.
Hospital administrators joined bipartisan lawmakers during a press conference promoting House File 3609, a bill that would add enforcement provisions to Minnesota’s existing 340B contract pharmacy law. Supporters say the legislation would help preserve access to health care in rural communities by ensuring nonprofit hospitals can continue participating in the federal 340B drug discount program.
The Minnesota Senate already passed the companion bill on a bipartisan 42-24 vote, but with only days remaining before the Legislature adjourns May 18, supporters say the measure has stalled in the House.
Tuesday’s press conference, organized by the Minnesota Hospital Association, was intended to increase pressure on House leadership to move the bill forward before the session ends.
The federal 340B program allows qualifying hospitals and clinics, including many rural facilities, to purchase outpatient prescription drugs at reduced prices. For example, a hospital might acquire a medication through the program for $50, while an insurer reimburses $200 when the prescription is filled. Hospitals say the difference helps support services such as emergency care, ambulance operations, behavioral health services, outreach clinics, and charity care, many of which operate at a loss.
The current dispute centers on “contract pharmacies,” which are local retail pharmacies that partner with hospitals to dispense 340B medications.
Drug manufacturers have increasingly tried to restrict those arrangements by refusing to honor discounted pricing when medications are dispensed through certain contract pharmacies. Hospitals argue the restrictions undermine a major source of funding for rural health care services.
Rep. Natalie Zeleznikar, the bill’s chief House author, said the legislation is intended to enforce protections Minnesota already approved in 2024.
“This bill enforces a law that Minnesota already passed in 2024,” Zeleznikar said. “Minnesota’s law is on the books, but it truthfully has no teeth and House File 3609 gives the bill its teeth.”
Among the hospital leaders speaking Tuesday was Ely-Bloomenson Community Hospital President and CEO Patti Banks, who described the unique challenges facing remote communities like Ely.
“We need to be sustainable and viable,” Banks said. “We exist in our community, not only year-round for about the 8,000 people that we serve regularly, but in the summertime we can serve up to 10,000 people or more.”
Banks said the hospital’s location near the Boundary Waters makes reliable local health care especially important because travel times to larger hospitals can quickly become dangerous.
“We are a long, long drive from any other hospital,” Banks said. “On a good day when the roads are good, the minimum drive is just under an hour. On a bad day in the wintertime, you are looking at twice that amount of time to get services.”
Banks said the 340B program directly supports everyday health care operations in Ely.
“It’s not just a federal program on a piece of paper,” Banks said. “It is every prescription that we fill in our retail pharmacy. It is every patient that we serve in our infusion center.”
Other hospital administrators echoed similar concerns Tuesday, describing rising pharmaceutical costs, workforce shortages, and financial strain across Greater Minnesota health care systems.
Richard Ash, CEO of United Hospital District in Blue Earth, said many rural hospitals are already operating under severe pressure.
“This is not theoretical. This is not political theater,” Ash said. “This is important. This is about people’s lives.”
Ash said losing 340B revenue could force hospitals to reduce services that already operate at a loss, including emergency care, obstetrics, and behavioral health programs.
“If the legislature waits until more rural hospitals are gone and services are gone, it will not be a policy failure,” Ash said. “It will be a moral failure.”
Questions surrounding the bill have centered partly on enforcement provisions that would allow Minnesota’s attorney general to pursue alleged violations of the state’s 2024 contract pharmacy law.
Zeleznikar acknowledged Tuesday that negotiations over enforcement language remain part of discussions at the Capitol, but said she now believes the original Senate language should move forward before adjournment.
“And so right now my position is this is too important to not get this passed,” Zeleznikar said.