Possible Medicare Drug Payment Cut Splits Health-Care Industry


A looming Medicare pay cut for hospitals will either devastate their ability to serve needy patients or will curb an out-of-control drug discount program, depending on whom you ask.

The pay cut, which would go into effect Jan. 1, would cut Medicare reimbursement for hospitals that use a separate program, known as 340B, to obtain discounted medications for outpatient care. The safety-net hospitals participating in 340B say the cuts to reimbursement, amounting to nearly 30 percent, would reduce access to care and wouldn’t help consumers, in contrast to what the Centers for Medicare & Medicaid Services has said would happen.

The CMS’s proposal from July would “tear a large hole in America’s healthcare safety net. We strongly urge HHS to drop it,” Ted Slafsky, the head of hospital group 340B Health, said in a statement. The CMS and its parent agency, the Department of Health & Human Services, have said the proposal was “a significant step toward fulfilling President Trump’s promise to address rising drug prices,” adding the proposal could reduce drug costs for seniors by at least an estimated $180 million per year.

A House Republican, Rep. Chris Collins (R-N.Y.), told me that the CMS’s decision “to rein in 340B spending is a good first step toward addressing the issues with this program, which are a result of its dramatic growth and lack of oversight since its inception.”

Collins said he’s “looking forward to further work by the Energy and Commerce Committee’s Oversight and Investigations Subcommittee as we continue our review of the 340B program and assure that it has the proper oversight, accountability and transparency.”

Meanwhile, congressional Republicans have asked 20 hospitals for details on their participation in 340B—a possible sign of legislative activity in this area.

Read my full article here.

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