Ohio Medicaid hospital financing package would expand hospital fees, tighten 340B eligibility

The Ohio Department of Medicaid outlined a hospital financing package that would raise the state—s hospital franchise fee and create a standardized set of state-directed payments for hospitals, while limiting some hospital participation in the 340B drug discount program.

The package, presented by Medicaid Director Maureen Corcoran, would increase the franchise fee to generate roughly $900 million in new revenue in the first year and about $1 billion in the second year, the department said. That revenue would be matched with federal funds and split between state priorities and targeted hospital payments, with the administration proposing a 60/40 split between state-directed uses and hospital-directed funds.

Corcoran said the proposal also seeks to curb rapid growth in non-rebatable drug spending tied to hospital participation in the 340B program. "Our projections are that in 02/1927, we…