340B Health


in 340B Health News Releases

Statement by Ted Slafsky, President and Chief Executive Officer, 340B Health

Washington, D.C., Nov.1 2017— The final Outpatient Prospective Payment System (OPPS) regulation published by the Centers for Medicare and Medicaid Services (CMS) today will harm patients, raise the cost of prescription drugs and other services, and undermine the vital safety net providers across the country that serve low-income and other vulnerable populations.  By slashing Medicare Part B outpatient drug payments for 340B hospitals by nearly 30 percent, CMS is taking an unprecedented action that will harm patient care.

The 340B program was signed into law by President George H.W. Bush 25 years ago this week. The bipartisan program is designed to stretch the resources of hospitals that serve a significant number of low-income patients who are uninsured, underinsured, or covered by Medicaid and other public payers. It requires drug manufacturers to discount their prices for outpatient products, and the discount does not cost the government or the taxpayers a single cent.

The rule issued today is a backdoor effort to undermine an important drug discount program.  It is a gift to for-profit cancer clinics who shun the poor, uninsured and underinsured. It will not lower the cost of drugs to patients or providers who treat them. It will not expand access to needed care. And it will not save the Medicare program. What it will do, plain and simple, is harm the ability of hospitals to treat their patients and increase the cost of drugs and other health care services.

Responding to a survey earlier this year, 340B hospitals were unanimous in saying implementation of the CMS rule would cause them to cut back services. For example, Genesis Healthcare System in Zanesville, Ohio, estimates a loss of $3 million in Medicare payments could force it to cancel critical services such as substance abuse treatment, cancer treatment, and behavioral health programs. The MetroHealth System Cancer Center in Cleveland, Ohio, estimates an $8 million loss would raise patients’ costs and reduce access to needed services including transportation and care navigation that are supported by 340B savings.

340B Health will examine all available options to reverse this ill-considered policy including working with Congress, where a bipartisan majority of both houses has expressed serious concern about the payment cut. We will also examine legal options, given that the payment reduction undermines Congressional intent behind the 340B program and CMS does not have the authority to target 340B hospitals for reduced payment rates.