Hospital groups to sue CMS over 340B payment cuts

The American Hospital Association, America's Essential Hospitals and the Association of American Medical Colleges plan to sue CMS in an attempt to stop payment cuts for drugs purchased through the 340B Drug Pricing Program.

On Wednesday, CMS released its 2018 Medicare Outpatient Prospective Payment System rule, which finalizes a proposal to 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.

The three hospital lobbying groups claim the payment cuts go against Congressional intent.

"Congress clearly intended that the 340B program help hospitals that care for many vulnerable patients; this new policy subverts that goal," said America's Essential Hospitals President and CEO Bruce Siegel, MD. "Given their fragile financial position, essential hospitals will not weather this policy's 27 percent cut to Part B drug payments without scaling back services or jobs."

The groups also claim CMS overstepped its statutory authority. AHA Executive Vice President Tom Nickels said the new 340B program policy "punishes hospitals and patients for participation in a program outside of CMS' jurisdiction."

More articles on healthcare finance:

HCA's net income tumbles to $426M in Q3
CHS reports $110M net loss, completes 30-hospital divestiture spree
CMS releases final OPPS rule for 2018: 8 things to know


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