340B Health

Hospitals Caring for Low-Income, Rural Patients Urge CMS to Withdraw Proposal to Slash Payments for Outpatient Drugs

in 340B Health News Releases


Washington, D.C., October 19, 2017 – A group of more than 1,300 hospitals serving low-income and rural communities is urging the Centers for Medicare & Medicaid Services (CMS) to withdraw its proposal to cut Medicare reimbursement for outpatient prescription drugs.

Earlier this year, CMS issued a proposed rule that would cut Medicare Part B drug payments to hospitals participating in the 340B drug discount program. Since that proposal, a bipartisan majority of House and Senate members have raised significant concerns. A decision is expected in the near future.

“Slashing payments to 340B hospitals won’t reduce drug prices, won’t increase patients’ access to needed care, but will undermine the ability for these facilities to treat the neediest people in their communities,” said Ted Slafsky, President and Chief Executive Officer of 340B Health, a trade group representing hospitals impacted by the proposed regulation. “At a time of record-high drug prices, this is no time to be damaging 340B hospitals’ ability to provide care.”

CMS’ proposal would cut Medicare Part B reimbursement to 340B hospitals for high-cost drugs by almost 30 percent. These drugs include treatment for expensive cancers, age-related macular degeneration, and rheumatoid arthritis, among other diseases and conditions.

“For my hospital alone, implementation of this regulation would reduce our savings by $3 million a year,” said Matthew Perry, President and Chief Executive Officer of Genesis Healthcare System serving rural communities in and around Zanesville, Ohio. “This would seriously jeopardize the system’s ability to serve as its community’s healthcare safety net and could force it to cancel critical services such as opioid addiction treatment, cancer treatment, and behavioral health programs.”

The impact would also be felt in communities served by urban medical centers. “Our patients would face higher costs, less access to care, and we could lose the ability to assist them with transportation, care navigation, and other valuable services. We cannot simply absorb an $8 million cut,” said Benjamin Li, M.D., Director of the MetroHealth System Cancer Center in Cleveland, Ohio.

Earlier this year, 340B Health conducted a survey of its members to identify the impact the proposed rule would have on hospitals and their patients. Every hospital that responded said the cut would affect their ability to provide services to low-income and rural patients. In addition, 86 percent said it would hamper their ability to provide clinical services, especially infusion and oncology care. Another 74 percent reported the CMS rule would impair their pharmacy services and their ability to provide uncompensated care to those without insurance.

More recently, bipartisan letters regarding the proposed rule were recently sent to CMS from Capitol Hill. A total of 228 Members of the House wrote to CMS asking the agency to abandon it and 57 Senators expressed concern about the proposal and the impact it would have on hospitals’ ability to treat patients.

“While we share the Administration’s concern about high prices, I am hopeful that the leaders of CMS will reconsider their proposal and withdraw it in the name of high-quality, affordable care for millions of patients served by 340B hospitals,” Slafsky added.