NYC Gazette

An investigation into New York City-based Sun River Health is "ongoing," according to the office of U.S. Sen. Bill Cassidy (R-La.), the ranking member of the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP).

The investigation focuses on Sun River Health's involvement in the 340B Drug Pricing Program, which provides discounted prescription drugs to eligible healthcare organizations.

Established in 1992, the 340b program enables eligible hospitals and healthcare organizations to purchase outpatient medications at significantly discounted prices. Health care providers participating in the 340B program can use the savings to fund essential services and programs, such as free or low-cost medication assistance, expanded access to healthcare, and community outreach initiatives.

Participating hospitals, however, “often extend their 340B discounts to clinics in well-off communities, where they can charge privately insured patients more than those on Medicaid,” reported the Wall Street Journal.

“In some cases, the program appears to be bolstering profits in well-off areas more than it is underwriting services in less-privileged neighborhoods,” reported the Journal.

Cassidy sent a letter to Sun River Health CEO Anne Kauffman Nolon last fall requesting detailed information regarding the health system’s participation in the 340B program, particularly concerning the utilization of profits generated from the program and their impact on low-income and uninsured patients.

“Sun River Health, a 340B covered entity, serves more than 250,000 individuals through an extensive network of more than 400 providers located across 48 sites in the state of New York and is ranked as having the tenth highest compensation among CHCs in the nation,” said the letter.

Specifically, Cassidy sought information on Sun River Health's pharmacy services agreements, audit records dating back to 2018, patient demographics, communities served, and drug cost-sharing policies for uninsured patients.

The documents were requested to be delivered by Dec. 7, 2023.

Sun River Health did not respond to NYC Gazette's request for an update on the organization's response to Cassidy's letter.

HELP Committee staffer Stephen Lawrence said, "we don't comment on ongoing investigations," in response NYC Gazette's request for an update on the investigation. 

Concerns have been raised regarding the equitable distribution of discounts to patients, as highlighted by reviews conducted by the Government Accountability Office (GAO) and the Office of Inspector General (OIG) within the Department of Health and Human Services. 

In response to these concerns, Cassidy introduced the HELP ACT (Helping Ensure Low-income Patients have Access to Care and Treatment).

The bill aims to address loopholes in the 340B program, ensuring that participating healthcare providers pass on discounts on prescription drugs to low-income patients.

Proposed measures include increased transparency, stricter reporting requirements and a temporary halt on new enrollments to prevent abuse while maintaining access for critical healthcare providers serving low-income areas.

Sun River Health was founded in Peekskill by Jeannette J. Phillips in the early 1970s before emerging as one of the largest federally qualified health center networks in the nation. Phillips died in September 2023, about a month and a half before Cassidy’s investigation was launched.

In April 2023 Sun River Health was granted $2 million in federal funds to expand its operations at its Beacon Health Center.

At the time, State. Rep. Pat Ryan (D-Gardiner) asked for more federal funding.

“Congress must fully fund Community Health Centers like Sun River Health across the country.  The Federal government shouldn’t play political games with our families’ health and safety,” Ryan said, according to Mid Hudson News.