The Centers for Medicare and Medicaid Services will pay eligible hospitals $9 billion to offset payment cuts that the Supreme Court deemed illegal, the agency said. in a proposed rule issued Friday.
CMS cut about 30% of Medicare 340B payments for most outpatient drugs between 2018 and September 27, 2022. The Supreme Court ruled in June 2022 that CMS had no authority to reduce reimbursement because CMS does not collect data on what the hospital pays for outpatient drugs.
On Friday, CMS proposed a one-time $9 billion payment to be allocated by the end of 2023 or early 2024 to each of the 1,600 hospitals affected by the 340B to be covered less due to policy has now expired. Vendors and other stakeholders have 60 days to submit comments on the proposal, which CMS expects to finalize by November 1.
“This fills that up [payment] Meena Seshamani, CMS deputy administrator and director of the Centers for Medicare. .
The 340B drug discount program for hospitals treating low-income and uninsured patients reduces drug prices by up to 50%. Hospitals, especially those in rural areas, say the program is important, especially as suppliers struggle with higher supply and labor costs.
The proposed rule needs to be budget-neutral, meaning CMS will reduce reimbursement for other services and products so that annual Medicare costs stay the same. CMS estimates that all hospitals were paid an additional $7.8 billion for non-pharmaceutical items and services between 2018 and September 27, 2022, compared with what they would have been paid otherwise. there is a payment cut of 340 billion.
Under the proposal, the agency would reduce future non-drug item and service payments by reducing the outpatient billing rate by 0.5% between 2025 and 2041. CMS estimates. that a 0.5% reduction in the potential Outpatient Payment System conversion factor for such non-drug items and services would amount to $335 million by 2025.
The proposed rule has drawn mixed reactions from hospital associations. Rick Pollack, president and chief executive officer of the American Hospital Association, said in a statement that although the AHA was pleased that hospitals would receive immediate reimbursement through a sum, the association disappointed that the federal government would take back money from other hospitals that “can’t afford to pay more”. Cut Medicare payments.
Dr. Bruce Siegel, president and CEO of America’s Essential Hospitals, said in a statement that cutting non-drug payments “reduces the impact of the remedy by ensuring years of payment. future math shortages.” The institution is also disappointed that the remedy does not include interest, Siegel added.
Chip Kahn, president and chief executive officer of the Federation of American Hospitals, said in a statement that the proposal takes into account the pressures hospitals face, from inflation to shortages. workforce, but withdrawing payments over five years would set a dangerous precedent. “It goes against the law and violates the principles of finality and predictability that underpin Medicare’s potential outpatient payment system.”
Premier, the group buying and consulting organization, said in a statement that the proposal represented “a disguised recall.”
The American Hospital Association, among other stakeholders, has been lobbying to keep the 340B program alive, which continues to face a number of legal and regulatory threats. Drugmakers continued to restrict discounts on the 340B drug distributed through contract pharmacies following a Third Circuit Court of Appeals ruling in January, largely in favor of the three drug companies seeking to find a way. drug discounts. Two similar cases are pending in federal appeals courts.
Hospital outpatient clinics worry they will lose their 340B eligibility since the Health Resources and Services Administration removed guidance from their website in May. The guidance, issued in June 2020 during the COVID-19 pandemic, allows 340B-eligible hospitals to prescribe discounted drugs to patients seen at outside clinics before those clinics are posted. Registered with the Office of Drug Administration Information System and listed on Medicare. expense report.
