Issue: Cuts to 340B Hospitals’ Medicare Part B Drug Reimbursement and Proposed Reforms.

On January 1, 2018, Centers for Medicare and Medicaid Services (CMS) Medicare hospital outpatient prospective payment system (OPPS) regulation took effect, which includes nearly 30 percent reduction in payments to certain 340B hospitals for drugs.

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The cuts are targeted to affect disproportionate share (DSH) hospitals for the payment reduction with the exception of rural Sole Community Hospitals, PPS-excluded Children’s Hospitals and PPS-excluded Cancer Hospitals. While the cuts are limited to certain non-profit, 340B hospitals, the “savings” from the policy would be spread among all hospitals, including for-profit institutions and other non-340B hospitals that do not historically provide significant amounts of charity care to low-income patients.

Reps. David McKinley (R-WV) and Mike Thompson (D-CA) have introduced legislation (H.R. 4392) strongly supported by 340B hospitals – including CHRISTUS Health – to overturn these cuts. CHRISTUS Health is urging all of the Members of its Congressional Delegation to support prompt passage of this critical legislation.

CHRISTUS also supports legislation introduced by Rep. Doris Matsui (D-CA), the Stretching Entity Resources for Vulnerable (SERV) Communities Act (H.R. 6071), that would clarify the intent of the 340B Drug Pricing Program and expand program eligibility to serve additional populations affected by the opioid crisis. H.R. 6071 would also overturn the OPPS payment cuts.

The 340B Program has come under increased scrutiny by Congress due to its growth and a perceived link to the consolidation of hospitals and clinics. Recent hearings on 340B issues have focused on the need for increased transparency, regulatory oversight and hospitals’ responsibility to provide uncompensated care. A number of bills have been introduced in Congress that would negatively impact the 340B program, including a bill by Sen. Bill Cassidy (R-LA) that would establish a two year moratorium on new registrants in the 340B program and impose a number of transparency requirements for participating hospitals (HELP Act, S. 2312).

CHRISTUS is working constructively with various bill sponsors and Committee leaders to address concerns regarding the 340B Program. At the same time, CHRISTUS is committed to strengthening this vital program for the future and to ensuring that low-income and rural patients maintain access to affordable, life-saving drugs.

The President’s FY 2019 Budget Request included several proposals aimed at the 340B program, including a new user fee on drug purchases by covered entities, a requirement that covered entities report program savings, and a link between Part B reimbursement for 340B drugs and hospitals’ charity care. Several of these proposals also were included in President Trump’s recently announced “Blueprint” to lower prescription drug prices.

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