Health systems told CMS in public comment letters how much its proposed cut to 340B drug payments would cost them, with estimates ranging from about $7 million to $109 million a year.
The 2027 outpatient payment rule, proposed July 2, would pay hospitals for drugs bought through the 340B program at average sales price minus 33.4%, down from average sales price plus 6%. CMS estimates the change would cut Original Medicare drug payments by $4.55 billion in the first year. Because the rule must be budget neutral, CMS would raise payments for nondrug outpatient services by 8.44% for all hospitals, including those that do not participate in 340B.
The rule would also speed up CMS’ recovery of remedy payments tied to its 2018-22 340B cut, which the Supreme Court struck down, raising the annual clawback from 0.5% to 3%. Hospital groups condemned the 340B cut when the rule was released, and the cuts would land as many hospitals already losing money build their 2027 budgets.
Comments were due Aug. 31. Two systems, Detroit-based Henry Ford Health and Louisville, Ky.-based Baptist Health, also counted losses on Medicare Advantage contracts tied to outpatient rates. The others did not say whether their estimates include Medicare Advantage.
Here are six health systems’ estimates of what the 340B payment cut would cost them each year, according to their comment letters, listed from largest to smallest:
- Henry Ford Health (Detroit): $109 million, including $35.5 million in Medicare fee-for-service cuts and more than $73.8 million in Medicare Advantage cuts. The system estimated the faster clawback would cost another $9.7 million in 2027. Of its top 26 340B drugs by spend, only eight would keep a positive margin under the proposed rate, the system said.
- Trinity Health (Livonia, Mich.): $109 million across its 340B hospitals. The system said 340B savings fund prescription assistance programs, safety-net health centers, chemotherapy services and other infusion therapies, and that losses on some drugs could near $1,000 per case.
- Baptist Health (Louisville, Ky.): $71.8 million, including $36.7 million in traditional Medicare and $35.1 million in Medicare Advantage. The system estimated the faster clawback would cost another $16.2 million a year and a separate site-neutral imaging cut $4.4 million, for a combined $92.4 million. It said investments in infusion, oncology, specialty pharmacy and medication therapy management services would be at risk.
- MUSC Health (Charleston, S.C.): $49 million. The system said the cut is “not a marginal rate adjustment” and that 340B savings support cancer care, infusion services, clinical pharmacy programs, medication assistance and specialty access in rural South Carolina.
- UVA Health (Charlottesville, Va.): Nearly $45 million. Programs the system said could be affected include UVA-owned pharmacies in former pharmacy deserts, community infusion centers, gene and cellular therapy programs and graduate medical education.
- UNC Health Nash (Rocky Mount, N.C.): About $7 million. The hospital said it may have to eliminate inpatient psychiatric services and called outpatient infusion “perhaps the greatest loss.” Women’s health, cardiovascular services and its community paramedic program could also face cuts, it said.
MemorialCare, a four-hospital system based in Fountain Valley, Calif., did not estimate its own loss but cited a statewide toll: about $600 million in 340B payment cuts for California hospitals in 2027, plus about $165 million from the faster clawback. If the cut is finalized, the system said, its hospitals would have to scale back or eliminate programs and service lines supported by 340B savings.
