December 14, 2017—Hospitals in the 340B drug discount program are ramping up efforts to get Congress to block deep cuts in their Medicare Part B drug payments set to begin Jan. 1.
In a Dec. 13 letter to the bipartisan leadership of Congress, 340B Health, which represents more than 1,300 hospitals and health systems in 340B, said the impending cuts “will cause tremendous disruption and loss of services for low-income and rural patients.”
Under final rules published by CMS on Nov.13, Medicare Part B drug payments to many 340B hospitals would be sharply reduced by 28.5 percent, resulting in a loss to those institutions of $1.6 billion in 2018.
340B Health also joined six other national safety net organizations in a separate letter to Congressional leaders in a joint letter with America’s Essential Hospitals, Children’s Hospital Association, The Hemophilia Alliance, National Association of Counties, National Alliance of State and Territorial AIDS Directors, and National Rural Health Association. “This payment cut will take away desperately needed resources that safety net providers use to treat vulnerable patients, inconsistent with the purpose of the 340B program,” the groups said.
Bipartisan legislation has been introduced by Reps. David McKinley (R-W.Va.) and Mike Thompson (D-Calif.) that would block the Centers for Medicare & Medicaid Services (CMS) from implementing the cuts under Medicare’s Outpatient Prospective Payment System. As of Dec.14, that legislation had 142 sponsors. On Dec. 5, six leading Senators—three prominent Republicans and three Democrats—wrote to their leaders urging action on legislation blocking the cuts. The group included Republicans John Thune (S.Dak.), Rob Portman (Ohio), and Shelly Moore Capito (W.Va.) and Democrats Bill Nelson (Fla.), Debbie Stabenow (Mich.), and Tammy Baldwin (Wisc.).
If allowed to take effect, the CMS regulation “will cause hospitals to cut back on services, close service sites, and let go clinicians and other caregivers,” said 340B Health President and Chief Executive Officer Ted Slafsky. Sam Ross, MD, Chief Executive Officer of Bon Secours Baltimore Health System, and Chair of the 340B Health Board of Directors, also expressed his concerns.
“Allowing these cuts to go into effect will have very real consequences on hospitals and their patients. The 340B drug pricing law was intended to allow safety net providers to stretch their scarce resources to serve more low-income patients and communities. The regulation flies in the face of this goal,” said Ross.
“Bipartisan majorities in both houses of Congress have made it clear that they do not support the discriminatory cut in payments to 340B hospitals. Now is the time to take action to ensure these misguided reductions do not take effect,” added Slafsky.
CMS’ proposed regulations are also being challenged in court by national, state, and local hospital organizations. The U.S. District Court for the District of Columbia has scheduled a hearing on Dec. 21 to hear arguments from the hospitals and the government. The hospital groups argue that the CMS regulation is unlawful and exceeds the government’s authority under Medicare law and the Public Health Service Act.