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Community Oncology Alliance backs hospital payment cuts in 340B rule

Cancer care is being shifted away from the private, physician-owned community oncology clinics and into the much more expensive 340B hospitals.

Susan Morse, Senior Editor

In the ongoing battle between oncologists and hospitals over the 340B drug program, the Community Oncology Alliance has sent a letter to the Centers for Medicare and Medicaid Services supporting the agency's payment cuts to hospitals.

Cancer care is being shifted away from the private, physician-owned community oncology clinics and into the much more expensive 340B hospital settings, the COA said in a Sept. 8 letter to CMS Administrator Seema Verma.

"Hospitals, fueled by profit margins of 100 percent or more on expensive cancer drugs, are consolidating the nation's cancer care system, reducing patient choice and access," the COA said.

[Also: Hospitals oppose cuts to 340B drug program, but oncology group says they're abusing the discount program]

The Community Oncology Alliance said hospitals are abusing a rule that originally went into effect 25 years ago to ensure patients did not fall through the cracks at safety net hospitals. The 340B program has become a profit generator for hospitals, while only a small minority of hospitals are using the program to benefit patients in need, the COA said.

Cancer patients are being denied care at 340B hospitals or placed on wait lists, COA said.

[Also: Congressional hearing examines concerns about oversight, abuse of 340B drug discount program]

"In short, the 340B program is out of control in the hospital sector," COA President Jeffrey Vacirca said to Verma.

Hospital organizations have come out against the rule that would reduce payment from 50 percent of the outpatient prospective payment system to 25 percent. If implemented, the rule would cut services and access for patients, the American Hospital Association and America's Essential Hospitals have said.

[Also: HHS again delays enforcing 340B drug program]

Under 340B, hospitals buy discounted 340B drugs and sell them to patients at full price. This is to allow hospitals that treat lower-income patients the ability to continue to serve that population. Hospitals in the program provide an estimated 60 percent of uncompensated care.

CMS's proposed rule for 2018 is estimated to reduce costs by an estimated $180 million a year.

COA recommends that CMS use the funds saved by the 340B program change to support rural providers.

"As opposed to large hospital "corporations" in urban/suburban areas, rural providers typically operate on lower margins and do catch patients who otherwise would fall through the treatment cracks," Vacirca said.

CMS is accepting comments on the rule through today and is expected to released the final rule on or about November 1.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com

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