Hospital groups decry 'draconian' cuts proposed by CMS in OPPS rule

Seema Verma speaking at press conference
Hospital groups warn that the changes proposed in CMS' OPPS rule could hurt hospitals that treat large numbers of low-income patients. (whitehouse.gov)

The Centers for Medicare & Medicaid Services issued its annual proposed rule setting outpatient payment rates this week, saying it wants to start site-neutral payments alongside changes to the 340B program.

And so far, hospitals aren't happy.

The updates to the Outpatient Prospective Payment System (OPPS) rule would "lay the foundation for a patient-driven healthcare system" CMS said.

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For instance, site-neutral payments would level out payments for "routine" clinic visits for hospital-owned facilities and physician practices, and Administrator Seema Verma told reporters Wednesday that the change would save Medicare patients $150 million a year in copays. 

But major hospital groups beg to differ—and warn that it could instead make it harder for patients to access the care they need. 

"CMS has once again shown a lack of understanding about the reality in which hospitals and health systems operate daily to serve the needs of their patients," Tom Nickels, the American Hospital Association's executive vice president for government relations and public policy, said in a statement

RELATED: 4 changes physicians don't like in proposed MACRA, physician fee schedule rule 

Here's a look at what the AHA and their peers had to say about CMS' plans: 

American Hospital Association 

The AHA has long opposed site-neutral payments, arguing that such a proposal could lead hospitals into conflict with anti-kickback laws. Nickels said that CMS has "misconstrued Congressional intent" in its proposal and that these payments could disproportionately harm hospitals that treat large numbers of low-income patients. 

"In 2015, Congress clearly intended to provide current off-campus hospital clinics with the existing outpatient payment rate in recognition of the critical role they play in their communities," Nickels said. "But CMS’ proposal runs counter to this and will instead impede access to care for the most vulnerable patients." 

The OPPS rule would also expand cuts to the 340B drug discount program to more hospitals, and Nickels said the "assault" on the program exceeds CMS' statutory authority. AHA and other hospital groups have challenged cuts to the program in court—unsuccessfully so far—on these grounds.

America's Essential Hospitals 

Bruce Siegel, M.D., CEO of America's Essential Hospitals, said in a statement that the potential payment cuts under a site-neutral system and to the 340B program were "draconian." 

CMS should withdraw both proposals, as they "undermine the foundation of support for our nation's healthcare safety net." 

"We believe these proposals only would create roadblocks to care in communities across the country—communities that already struggle with care shortages and severe economic and social challenges," Siegel said. 

340B Health 

340B Health, which includes more than 1,300 hospitals that participate in the 340B program, said CMS' proposals would threaten access to care for "millions of patients who live with low incomes or in rural communities." 

"CMS now plans to make a bad rule worse by extending the cuts to drugs provided in certain off-campus hospital clinics, including facilities providing infusion therapy for cancer patients and other high-cost drug therapies to treat chronic and life-threatening conditions," the group said. 

Community Oncology Alliance 

Perhaps not surprisingly, nonhospital providers were cheering the rule. 

Jeff Vacirca, M.D., president of the Community Oncology Alliance, which represents cancer care doctors, said the Trump administration deserves a "huge round of applause for these broad proposals." 

"As evidenced by CMS’ calculations, this policy is fantastic news for seniors on Medicare and taxpayers," Vacirca said. "They will benefit greatly from reduced out-of-pocket spending when dealing with cancer care and other illnesses.”  

The group's executive director Ted Okon said the proposals—particularly expansions to the 340B payment cuts—are "spot-on and extremely positive proposals." 

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