Four groups are condemning CMS’ proposed 2027 Hospital Outpatient Prospective Payment System and Ambulatory Surgery Center rule, which would cut what Medicare pays hospitals for 340B drugs and expand site-neutral payments into a new category of services. The rule, issued July 2, would affect roughly 3,500 hospitals and 6,400 ASCs.
Under the proposal, 340B-acquired drugs would be reimbursed at average sales price minus 33.4%, down from the current average sales price plus 6%, a change CMS estimates would reduce Original Medicare drug payments by $4.55 billion in the first year. The rule would also speed up recovery of remedy payments tied to the since-overturned 2018-2022 policy, raising the annual clawback rate from 0.5% to 3%.
Ashley Thompson, senior vice president of public policy analysis and development at the American Hospital Association, said hospitals are already stretched by sicker patients and rising uncompensated care, and that CMS’ proposed cuts would deepen those pressures, according to a July 2 statement. She called the proposed 33.4% cut to 340B reimbursement rates “shocking,” warning it would make drugs less affordable for vulnerable patients.
“HHS has chosen to make healthcare more expensive for patients in rural and other underserved communities,” she said. “These proposals will undermine the ability of hospitals to maintain essential services and protect affordable access to care for those who depend on the 340B program.”
Jennifer DeCubellis, president and CEO of America’s Essential Hospitals, said the proposed rule takes an axe to critical funding that supports essential hospitals without concern for how it will affect the patients they serve, according to a July 2 statement. She also called the cuts “unlawful,” saying they rely on a flawed methodology drawn from a survey covering less than a quarter of 340B-covered entities.
The Association of American Medical Colleges President and CEO David Skorton, MD, said the rule is deeply troubled by provisions that would undermine the ability of academic health systems, teaching hospitals and their physician faculty to adequately care for patients and communities, according to a July 2 statement. Dr. Skorton pointed to the outpatient reimbursement cuts, the 340B drug payment reduction and the accelerated recoupment timeline as changes with lasting effects on access to care.
Tom Kraus, chief advocacy officer and vice president of government relations at the American Society of Health-System Pharmacists, said the rule targets a program that serves as a lifeline for critical services and patient access, according to a July 2 statement. He said the proposal would harm patients and destabilize community providers, and he called on CMS to abandon the changes and work with ASHP on other solutions to the nation’s healthcare challenges.
Premier, a group purchasing organization, said the rule delivers multiple blows to hospitals already operating under immense financial strain, according to a July 2 statement from John Knapp, the company’s vice president for advocacy. Premier said the 2.4% payment update again falls short of covering hospitals’ true costs, and that the site-neutral expansion combined with the accelerated 340B recoupment and drug payment cut would push the update into negative territory for many hospitals.
