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Rural hospitals urge CMS to pull proposal to slash payments for outpayment drugs

Rule would cut Medicare Part B drug payments to hospitals participating in the 340B drug discount program.

Jeff Lagasse, Associate Editor

A group of more than 1,300 hospitals serving low-income and rural communities is urging the Centers for Medicare and Medicaid Services 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 concerns, with a decision expected in the near future.

[Also: Proposed changes to 340B program would hurt nonprofit hospital margins, Moody's says]

"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 CEO of 340B Health, a trade group representing hospitals impacted by the proposed regulation, in a statement. "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.

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

"For my hospital alone, implementation of this regulation would reduce our savings by $3 million a year," said Matthew Perry, president and CEO of Genesis Healthcare System in Zanesville, Ohio, in a statement. "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, according to Benjamin Li, MD, director of the MetroHealth System Cancer Center in Cleveland, Ohio. He said patients would face higher cost with reduced access to care, and systems like his would no longer be able to assist them with transportation, care navigation and other services.

[Also: Community Oncology Alliance backs hospital payment cuts in 340B rule]

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. And 86 percent said it would hamper their ability to provide clinical services, especially infusion and oncology care. Another 74 percent said 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.

Twitter: @JELagasse
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