Hospitals Plan to Sue Over Finalized 340B Changes

Hospital groups say that changes to the 340B program threaten access to treatment for Medicare beneficiaries.

Top hospital groups, including America’s Essential Hospitals, the American Hospital Association (AHA), and the Association of American Medical Colleges (AAMC), are planning to sue the Centers for Medicare & Medicaid Services (CMS) due to changes to the 340B program that would cut reimbursements, according to Politico.

The finalized Hospital Outpatient Prospective Payment System rule aims to reduce out-of-pocket costs for Medicare-insured patients, while also increasing access to healthcare in rural areas, according to the CMS. The rule will lower the payment rate for Part B medications purchased by hospitals through the 340B program, according to a press release.

Although the CMS said that the changes would reduce costs for patients, hospitals are expected to feel the weight of this decision.

The hospital groups said they will try to stop the billion-dollar cut to the program because CMS is ignoring the intentions of the discounts, according to the article.

In a press release, America’s Essential Hospitals stated that the CMS failed to demonstrate how the funding cuts would save money for patients.

“Instead, this policy weakens the 340B program’s value as a tool to lower prices while raising costs and administrative burdens on hospitals least able to absorb these changes,” the statement said. “We will take all steps necessary to stop this and other harmful policies that threaten access to high-quality hospital care for all people, especially those who face economic and social hardships.”

However, the CMS plans to exclude pediatric hospitals, cancer hospitals, and rural community hospitals from the drug payment reductions.

Unfortunately, the hospital organizations—including the AHA—feel that the finalized changes would severely threaten access to proper treatment for beneficiaries.

“CMS’ decision in today’s rule to cut Medicare payments to hospitals for drugs covered under the 340B program will dramatically threaten access to health care for many patients, including uninsured and other vulnerable populations,” said Tom Nickels, executive vice president, AHA. “We strongly urge CMS to abandon its misguided 340B rule, and instead take direct action to halt the unchecked, unsustainable increases in the cost of drugs.

The AAMC also issued a negative opinion about the updated rule, saying that it will have negative effects on teaching hospitals and other safety net providers who are currently participating in the program.

“This decision will penalize safety net hospitals, leading to a reduction in critical services and programs that they provide to the nation’s most vulnerable patients,” said Darrell G. Kirch, MD, president and CEO, AAMC. “Whether it is mobile clinics that provide preventive care in low-income communities, expanded access to vital specialty physicians for underserved patients, or multi-disciplinary substance intervention programs, the life-saving services supported by 340B savings have been put at risk by this regulatory change.”