2 lawmakers seek to stop $1.6B in payment cuts to hospitals

Reps. David McKinley, R-W.Va., and Mike Thompson, D-Calif., introduced a bill Tuesday that would prevent a significant reduction in Medicare Part B payments for certain hospitals that participate in the 340B Drug Pricing Program.

The payment cuts are included in CMS' 2018 Medicare Outpatient Prospective Payment System rule, which was finalized earlier this month. Under the rule, Medicare would pay hospitals 22.5 percent less than the average sales price for drugs purchased through the 340B program. That's compared to the current payment rate of average sales price plus 6 percent. CMS is implementing this policy in a budget-neutral manner by offsetting the projected $1.6 billion decrease in drug payments by redistributing an equal amount for non-drug items and services within the OPPS.

The bill introduced this week, H.R. 4392, would place a permanent moratorium on the $1.6 billion in 340B payment cuts.

The American Hospital Association and America's Essential Hospitals both thanked Reps. McKinley and Thompson for leading the bipartisan effort to prevent the payment reduction. "This bill's supporters span the country, demonstrating how this policy jeopardizes care in communities nationwide," said Bruce Siegel, MD, president and CEO of America's Essential Hospitals.

The Association of American Medical Colleges and three health systems joined the AHA and America's Essential Hospitals in a lawsuit filed Monday against HHS that seeks to stop implementation of the 340B program payment cuts included in the OPPS rule.

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