NAUH Urges Medicare to Withdraw 340B Proposal

The National Association of Urban Hospitals has urged the Centers for Medicare & Medicaid Services to withdraw its proposal to significantly reduce Medicare payments for prescription drugs to hospitals that qualify for the federal section 340B prescription drug discount program.

The plan, part of Medicare’s proposed outpatient prospective payment system for outpatient services for 2018, would reduce 340B payments to qualified hospitals approximately 28 percent.

 In its formal comment letter to CMS, NAUH argues that the 340B program is appropriately serving the purpose for which it was created – putting additional resources in the hands of hospitals that serve especially large numbers of low-income patients – and that the proposed changes would detract from the ability of urban safety-net hospitals and other safety-net providers to continue delivering many of the services the residents of their low-income communities need that are currently made possible only through savings derived from the 340B program.

Most private safety-net hospitals participate in the 340B program.

See NAUH’s letter to CMS here.

Don’t Slash Medicare Drug Payments, NAUH Asks CMS

The federal government should withdraw its proposal to drastically reduce Medicare payments for prescription drugs covered by the section 340B prescription drug discount program, NAUH has told the Centers for Medicare & Medicaid Services.

CMS has proposed a 28 percent cut in those payments beginning in 2018.

According to NAUH, the savings hospitals enjoy from 340B discounts enable them to expand the scope of the services they offer to their low-income patients and engage in additional community outreach.  This was the very reason Congress created the program, NAUH told CMS, and reducing 340B payments now would reduce those savings, undermine the purpose of the program, redistribute the savings among hospitals serving patients with fewer needs, and not save taxpayers any money while also not doing anything to reduce the cost of prescription drugs.

Most private safety-net hospitals participate in and benefit from the 340B program.

Go here to see NAUH’s letter to CMS presenting these arguments.

Leave 340B Alone, CMS Advisory Group Says

The Centers for Medicare & Medicaid Services should not significantly reduce Medicare payments for some prescription drugs.

Or so says one of CMS’s own advisory panels.

The agency’s Advisory Panel on Outpatient Prospective Payment reached this conclusion after listening to testimony from hospital industry stakeholders who told of the savings the federal government’s 340B prescription drug discount program produces and how those savings enable hospitals in low-income areas to help low-income patients who would not otherwise be able to afford their drugs and help improve access to care for low-income patients with very limited health care options.

The panel’s recommendation came just a month after CMS proposed reducing Medicare reimbursement for 340B drugs from its current level, average sales price plus six percent, to average sales price less 22.5 percent.

NAUH agrees with the advisory panel:  it opposes the proposed change in the 340B program.

Critics of the program maintain that it is abused by hospitals, which are not required to reinvest their 340B savings in health care for the poor.  Program supporters maintain that hospitals do use those savings for this very purpose.

Most of the country’s private safety-net hospitals participate in the 340B program and consider it an essential part of their overall effort to serve the many low-income residents of the communities they serve.

CMS called for the change in the 340B program in a proposed regulation published in July.  Interested parties have until September 11 to comment on the proposal.

Learn more about this issue and the CMS advisory panel’s recommendation in this Fierce Healthcare article.

NAUH Urges Ways and Means to Block 340B Changes

In response to a request from the House Ways and Means Committee’s Health Subcommittee for suggestions from stakeholders on ways to improve the delivery of Medicare services and eliminate statutory and regulatory obstacles to more effective care delivery, NAUH has urged the committee to compel CMS to withdraw its proposed changes in reimbursement for prescription drugs purchased by hospitals under the federal government’s 340B prescription drug discount program.

The Centers for Medicare & Medicaid Services’ proposed outpatient prospective payment system rule for 2018, published in July, calls for significant reductions in federal reimbursement for drugs purchased by hospitals for low-income patients under the federal 340B prescription drug discount program.  If implemented, such a change could cause considerable financial harm to private safety-net hospitals and potentially jeopardize access to care for the low-income patients these hospitals serve.

See NAUH’s message to the House Ways and Means Committee here.

Congress Looks at 340B Program

Last week the House Energy and Commerce Committee took a look at the 340B prescription drug discount program, which requires pharmaceutical companies to sell discounted drugs for outpatient use to hospitals that care for especially large numbers of low-income patients.

The previous week, the Centers for Medicare & Medicaid Services issued a proposed Medicare regulation calling for significant reductions in Medicare payments for such drugs.

The hearing touched on the CMS proposal to reduce Medicare payments for 340B drugs, the high prices of prescription drugs, the 340B program’s growth over the years, the possibility that the program is being abused by hospitals and clinics, and more.

The 340B program is an essential tool in the efforts of private safety-net hospitals to help the many low-income residents of the communities they serve.

Learn more about the hearing and the issues raised during it this Kaiser Health News report.

Group Organizes Advocacy in Support of 340B Program

Under pressure from federal regulators and MedPAC, the advocacy group 340B Health is attempting to rally hospital groups behind the 340B prescription drug discount program that requires pharmaceutical companies to provide discounts to qualified hospitals for drugs dispensed on an outpatient basis to Medicaid patients.

Last year the Health Resources and Services Administration, which runs the program, issued proposed regulations that would change how the program operates and is governed. Recently, MedPAC proposed reducing the size of the discount hospitals receive for the drugs, with the savings to be redirected to fund additional Medicare disproportionate share (Medicare DSH) payments for selected hospitals.

Prescription Medication Spilling From an Open Medicine BottleMore than 2100 organizations participate in the 340B program, including most private safety-net hospitals. NAUH has conveyed its concern about the proposed regulatory changes to the Health Resources and Services Administration and about the proposal to reduce 340B payments to MedPAC.

For a closer look at the 340B program, the changes that have been proposed, and what hospitals are attempting to do about it, see this report from CQ Roll Call presented by the Commonwealth Fund.

MedPAC Offers DSH, 340B Recommendations

The Medicare Payment Advisory Commission has recommended that Congress direct changes in the 340B prescription drug discount program and in the manner in which Medicare makes disproportionate share hospital payments (Medicare DSH).

In its annual report to Congress, MedPAC recommended a reduction in 340B prescription drug payments to hospitals. The proposed reduction would cut 340B program spending approximately $300 million.

MedPAC then recommended that those 340B savings be redirected to the Medicare DSH uncompensated care pool.

And it also called for distributing the money in that pool based on better data on the uncompensated care hospitals provide, as reported on hospitals’ Medicare cost report S-10 worksheets, so that the Medicare DSH uncompensated care program would “…better target additional payments to hospitals that provide above average shares of uncompensated care.”

NAUH has long argued against the use of S-10 data in the calculation of Medicare DSH payments and reiterated this opposition, as well as its opposition to the reduction of 340B payments and the diversion of 340B savings to the Medicare DSH uncompensated care pool, in past correspondence with MedPAC.

To learn more about these and other MedPAC recommendations, see the news release that accompanied the MedPAC report to Congress; a fact sheet on that report; and the report itself.

DSH/340B Hospitals Have Lower Medicare Drug Costs

Medicare disproportionate share (Medicare DSH) hospitals that qualify for the federal 340B prescription drug discount program have lower Medicare Part B drug costs than other Medicare providers.

Prescription Medication Spilling From an Open Medicine BottleSo concludes a new study performed for 340B Health, an association that represents more 1100 public and non-profit hospitals and health systems that participate in the 340B drug pricing program.

According to the organization 340B Health,

Medicare pays disproportionate share hospitals in the 340B drug discount program on average 13 percent less for separately payable drugs reimbursed through Medicare Part B. This is in comparison to what it pays other hospitals and physician practices in the Part B market. The study also shows that 340B DSH hospitals are treating more vulnerable patients than other providers in terms of race, age, disability, and dual eligibility.

The study also found that 340B-eligible hospitals are

  • Nearly four times as likely as non-340B providers to treat patients with end-stage renal disease
  • More than twice as likely to treat patients dually eligible for Medicare and Medicaid
  • More than twice as likely to treat patients who are disabled
  • More than twice as likely to treat Black, Hispanic, and North American Native patients

Most of the country’s private safety-net hospitals are Medicare DSH hospitals and many participate in the 340B prescription drug pricing program as well.

For a closer look at the study and its findings, go here to see a 340B Health news release on the study and go here to see the study Analysis of Separately Billable Part B Drug Use Among 340B DSH Hospitals and Non-340B Providers.

NAUH Urges MedPAC to Reconsider Medicare DSH Proposal

At their December meeting, members of the Medicare Payment Advisory Commission discussed the possibility of recommending to the Centers for Medicare & Medicaid Services that Medicare calculate a portion of eligible hospitals’ Medicare disproportionate share hospital payments (Medicare DSH) using the Medicare cost report’s S-10 form. That form seeks to capture how much uncompensated care hospitals provide.

NAUH has long opposed the use of the S-10 to calculate the uncompensated care portion of Medicare DSH payments and wrote to MedPAC asking the commissioners not to make such a recommendation to CMS. In making this argument, NAUH cited the lack of consensus on what constitutes uncompensated care; the S-10’s imprecise instructions, which are invariably interpreted by different hospitals in different ways; and the questionable uncompensated care data that has been submitted to CMS in recent years. NAUH has written to CMS about this on numerous occasions in recent years.

NAUH LogoNAUH also urged MedPAC to reject another proposal the commissioners discussed at their December meeting: to reduce Medicare 340B prescription drug discount program payments to qualified hospitals.

 

Feds Issue Proposed Guidance for 340B Program

The federal Health Resources and Services Administration (HRSA) has issued proposed guidelines governing its section 340B Drug Pricing Program.

The 340B program, which requires pharmaceutical companies to provide discounted drugs for qualified providers to dispense to low-income patients, has become controversial in recent years amid a significant increase in the number of eligible providers and allegations by the pharmaceutical companies that the drugs are not being used for their intended purpose.

federal registerThe proposed guidance released by HRSA seeks to clarify a number of the concerns that have been raised about the program. Among other considerations, these guidelines address entities that may participate in the program; patient eligibility requirements; and audits, records, and compliance.

For a closer look at the proposed guidelines, see this article in the Becker’s Hospital Review. Find the 90-page guidance document itself here, in the Federal Register. Interested parties have until October 27 to submit written comments to HRSA about the proposed guidance.