Hospital groups slam proposed 340B payment cuts

The American Hospital Association (AHA) has called on the Medicare Payment Advisory Commission to retract its recommendation to reduce readmission rates for hospitals that participate in the 340B Drug Pricing Program by 10 percent.

MedPAC will vote on the recommendation for fiscal year 2017 next week; in a letter to the organization, Ashley Thompson, AHA senior vice president of public policy analysis and development, expresses concerns that the payment cuts veer outside of MedPAC's mission by making recommendations on a public health program operated by the Health Resources and Services Administration rather than Medicare.

"In venturing beyond its scope, MedPAC appears to call into question the wisdom of Congress in designing the 340B program–suggesting that MedPAC should step in and fix the intent of a congressionally-designed public health program," Thompson writes. "It is a dangerous and slippery slope for the Commission to weigh in on issues that are beyond its expertise, question congressional intent and penalize hospitals for their ability to obtain discounts on the items and services they purchase."

The letter is also critical of what Thompson says is ambiguity about the purpose of the recommendation. The rationale for the recommended cuts appears to be to reduce Medicare beneficiaries' Part B copayments, Thompson writes, but the AHA contends it would not accomplish this.

The announcement of the recommendations comes in the wake of heavy lobbying last year by the AHA, which met with Congress to urge them to prevent any major overhauls. The group was able to prevent Congress from altering the program earlier in 2015, FierceHealthFinance previously reported.

Nor is the AHA the only advocacy group to express misgivings about the recommendation; in a statement published this week, 340B Health, which represents hospitals and health systems that participate in the program, expressed concerns that the recommendation would be to the detriment of both member hospitals and their low-income patients.

"Now is not the time for MedPAC to consider fundamental changes to the 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," wrote Maureen Testoni, the group's general counsel and senior vice president.

To learn more:
- read the AHA's letter (.pdf)
- here's 340B Health's statement