340B Hospitals Endorse Bill To Block Medicare Payment Rules: Bipartisan Leaders Call Regulation “Misguided”
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Washington, D.C.— A national organization representing nearly 1,300 hospitals and health systems participating in the 340B drug pricing program strongly endorsed bipartisan legislation today that would block implementation of regulations that would slash Medicare Part B payments to 340B hospitals.
The legislation (H.R.4392) has been introduced by Reps. David McKinley (R-W.Va.), Mike Thompson (D-Calif.), Bill Johnson (R-Ohio), David Kustoff (R-Tenn.), Joe Courtney (D-Conn.), and Kathy Castor (D-Fla.). It would prohibit the Centers for Medicare & Medicaid Services (CMS) from implementing or enforcing regulations that would slash Medicare Part B payments to 340B hospitals by nearly 30 percent and redistribute those dollars to hospitals that do not participate in the program, including for-profit facilities.
“We applaud the sponsors of this legislation and urge Congress to take swift action to enact it into law,” said Ted Slafsky, President and Chief Executive Officer of 340B Health. “These rules make draconian cuts in payments to hospitals that care for low-income Americans. Sadly, they would not reduce the price of drugs and would not reduce costs for seniors or Medicare. They are ill-conceived and need to be stopped before they cause damage.”
Since its enactment in 1992, 340B has successfully reduced the cost of outpatient drugs for hospitals, clinics, and health centers caring for poor patients. The law requires drug makers to reduce their prices for qualified providers. In 2015, 340B discounts reduced drug costs by $6.1 billion, helping to shore up the patient safety net in communities across the country. While those discounts represent only 1.3 percent of the total drug market, they allow hospitals and others to provide free or low-cost drugs to patients who are uninsured or underinsured and invest in critical services for patients living with cancer, HIV, and other life-threatening conditions. The 340B discount does not cost taxpayers a dime.
“We are especially thankful to Congressman McKinley for his leadership on this legislation,” said David Ramsey, President and CEO of Charleston Area Medical Center in Charleston, W.Va. “The savings we are able to achieve thanks to the 340B program are the difference between keeping services and cutting them. The loss of funds under the CMS regulation would force us to consider further staff reductions at a time when our communities needs the services we offer most.”
The regulations, due to go into effect on Jan. 1, 2018, would reduce Medicare Part B payments to certain 340B hospitals by $1.6 billion. That money would be redistributed to hospitals – including for-profit facilities that don’t care for many low-income patients. Earlier this year, 228 members of the House of Representatives wrote to CMS urging them to withdraw the regulation; 57 Senators sent a separate letter raising serious concerns with the rule.
“Legislators from both political parties are saying with a clear, unified voice these regulations are misguided and must be stopped,” Slafsky said. “On behalf of our members, 340B Health will do everything in our power to support these leaders.”