MedPAC approves 340B payment proposal: 3 things to know

The Medicare Payment Advisory Commission in a 14-3 vote has approved a proposal to reduce Medicare Part B payment rates for hospitals participating in the 340B Drug Pricing Program, according to an article published in the American Journal of Managed Care.

Here are three things to know about the vote, as presented by as presented by author Surabhi Dangi-Garimella, PhD. 

1. MedPAC has recommended Congress reduce the payment rates for 340B hospitals' Part B drugs by 10 percent of the average sales price. That would reduce the amount a hospital saves on a Part B drug by roughly 30 percent, and results in savings of about $300 million, according to the report. MedPAC also recommended that Congress direct the program savings from reducing the payment rates to the Medicare-funded uncompensated care pool.

2. The vote comes about a week after the American Hospital Association sent a letter urging MedPAC to withdraw its draft recommendation to cut payment rates to hospitals participating in the 340B Drug Pricing Program. The AHA urged MedPAC to withdraw the draft recommendation and, instead, to undertake an analysis of the trend of rapidly rising drug prices.

3. In reaction to the vote, 340B Health, a nonprofit organization of over 1,100 public and private hospitals and health systems, expressed concerns. "MedPAC's proposal would fundamentally change the 340B program and there has not been enough analysis about how hospitals would be affected. 340B hospitals provide significantly more uncompensated care than non-340B hospitals," 340B Health said, according to the report. "The proposal would harm hospitals that provide high levels of care to Medicaid patients even though Congress set the 340B eligibility criteria to explicitly include high-volume Medicaid hospitals. This is not the time to make fundamental changes to the 340B program, especially as 340B hospitals struggle to meet the needs of their low-income and underserved populations in an era of rapidly increasing drug costs."


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