MEDICARE DRUG PAY CUTS TAKE AIM AT 340B HOSPITALS SERVING AMERICA’S MOST VULNERABLE PATIENTS
Washington, D.C.— Today, the Centers for Medicare & Medicaid Services (CMS) released its proposed 2027 Medicare outpatient prospective payment system (OPPS) rule, which includes a proposal to reduce Medicare Part B reimbursement for separately payable 340B drugs by more than 37% for most 340B hospitals. Under the proposal, OPPS hospitals would be paid at average sales price (ASP) minus 33.4% for the affected 340B drugs, while CMS would continue paying non-340B hospitals ASP plus 6% for those same drugs. The proposal would revive steep payment cuts that are even worse than those CMS implemented during the first Trump administration. 340B Health strongly opposes these harmful proposals.
The following statement is attributed to Maureen Testoni, president and CEO of 340B Health, the national trade association representing more than 1,600 hospitals participating in 340B:
“At a time when many hospitals are already struggling with rising costs, workforce shortages, and a growing demand for care all the while looming Medicaid cuts begin to take effect, CMS’s proposal will take away vital resources that patients and underserved communities rely on. The Congressional Budget Office (CBO) projects that H.R.1, enacted last year, would reduce federal Medicaid spending by an estimated $911 billion over 10 years and increase the number of uninsured people by 10 million.
“What is most concerning is that CMS’s proposal takes savings that Congress intended to help safety-net hospitals maintain and increase services for their patients and instead uses that revenue to pay more to non-safety net providers. This proposal is not about cutting costs for seniors, as they will face higher payments for non-drug Part B services.
“340B hospitals rely on 340B to stay afloat because they provide high levels of care to the uninsured and patients covered by public programs, which typically pay less than the cost of care. 340B savings don’t sit on a balance sheet, these resources ensure safety-net hospitals can stretch scarce resources to provide more care to more patients. 340B hospitals provide approximately 77% of all Medicaid hospital care and 67% of the nation’s unpaid care, supporting critical services such as cancer treatment, behavioral health, specialty clinics, and other services that often operate at a loss. By effectively eliminating those savings when hospitals provide 340B drugs to Medicare patients, CMS is jeopardizing access to that care.
“We urge Congress and the administration to carefully consider how these cuts would harm safety-net hospitals and the patients they serve and ultimately ensure that CMS drops this proposal in its entirety.”
Contact: Jon Tilton at jon.tilton@340bhealth.org or 202-536-2285