As reported initially by FierceHealthcare, hospitals are blasting the Trump administration’s move to survey them about drugs covered under the 340B discount program, saying the survey request will cost too much and is flawed. The comments from hospital groups and facilities are the latest in a fight over the 340B drug discount program, which the Centers for Medicare & Medicaid Services (CMS) has sought to cut for the past several years.
Background
The survey request is in response to a court decision in December 2018 that ruled CMS didn’t have the authority to change the payment rates for 340B. CMS had instituted nearly 30% in cuts in 2018 and 2019 to the program, which requires drug companies to offer discounts to safety-net hospitals in exchange for access to Medicaid markets.
The survey would require reporting of acquisition cost data on 340B discounted drugs. CMS stated its intent to use the collected information to determine payment rates for these drugs acquired under the 340B Program, likely solidifying a payment rate at some level less than the historical Average Sales Price + 6%. This proposed Survey is notable since it could constitute an admission that CMS did not have the survey data required to establish its current reduced Outpatient Prospective Payment System payment of ASP -22.5%.
AAMC and AHA Comments
In one particular comment, the Association of American Medical Colleges (AAMC) expressed numerous concerns. AAMC argues “CMS has grossly underestimated the expenditure of time and resources hospitals will incur in order to collect and submit the required data … To comply with this and other requirements set out in the notice, hospitals will likely be forced to redirect financial resources that would otherwise be used to care for low-income patients.”
AAMC further cites the CMS notice, which writes that “[w]e want to ensure that the Medicare program pays for specified covered outpatient drugs purchased under the 340B Program at amounts that approximate what hospitals actually pay to acquire the drugs.” (84 Fed Reg 51591). AAMC continues: “Congress did not design the 340B Program to pay hospitals at acquisition costs. Congress designed the program so that eligible hospitals could purchase covered drugs at a discounted rate below the Medicare reimbursement rate and use the difference to reach more eligible patients and provide more comprehensive services. Consistent with the intent of the program safety-net hospitals invest their 340B savings in a wide variety of programs to meet the needs of their local communities and help vulnerable patients at no cost to taxpayers.”
The American Hospital Association (AHA) also submitted comments. The AHA writes, “The AHA has significant concerns with the intent and design of the 340B hospital survey, and we request that CMS withdraw it. CMS has stated, in the notice as well as in the final rule for the calendar year (CY) 2020 Medicare outpatient prospective payment system (OPPS), that the agency intends to use the survey results not only in future Medicare Part B 340B payment policy but also as the possible basis for a remedy related to ongoing litigation.The AHA has long argued that CMS’s Medicare Part B payment policy imposes such drastic reductions in the payment rate for 340B drugs that it severely undermines the benefits of the 340B program. he magnitude of the cuts for OPPS payment years CYs 2018-2020 has compromised 340B hospitals’ ability to establish and continue the operation of programs designed to improve access to services for their patients – which is the very purpose of the 340B program.”