America’s Essential Hospitals is urging CMS to revise proposed requirements tied to domestic sourcing of medical supplies, citing administrative burden and financial strain.
The group said the policy — which would track whether hospitals meet thresholds for U.S.-made personal protective equipment and essential medicines — could be difficult to implement because hospitals often lack visibility into supply origins through group purchasing organizations, according to a March 23 comment letter.
Instead, the association recommended CMS collect supply chain data directly from contracting entities and avoid adding reporting requirements to existing quality programs. It also urged the agency to provide additional payments that are not budget neutral to offset higher costs associated with domestic sourcing.
The letter also calls for the creation of an “essential hospital” designation to prioritize funding for safety-net providers. These hospitals represent 6% of acute care hospitals but delivered 29% of charity care in 2023 and reported an aggregate operating margin of -7.1%, compared to -2.3% for other hospitals.
However, industry groups representing domestic manufacturers have taken the opposite view. The American Medical Manufacturers Association has urged CMS to finalize stronger “Buy American” incentives, arguing the policy could strengthen supply chain resilience and reduce reliance on overseas production, according to a March 31 statement.
The group also backed CMS’ proposed Secure American Medical Supplies designation, which would recognize hospitals that meet domestic sourcing targets, and said stronger incentives are needed to support long-term investment in U.S. manufacturing.
CMS began exploring domestic sourcing policies earlier this year, issuing an advance notice of proposed rulemaking in January to gather feedback on strengthening U.S.-based supply chains for personal protective equipment and essential medicines. The agency has also considered payment adjustments and designation programs to support hospitals adopting American-made supplies.
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