CMS rolls out survey of drug costs for 340B hospitals as legal fight rages

Drugs prescription pad
CMS has finalized a survey of 340B hospitals' drug acquisition costs as part of a larger legal fight. Image: Getty/LIgorko

The Trump administration finalized a survey of hospitals to acquire the payment rates for drugs purchased under the 340B discount program, much to the dismay of hospitals.

The Centers for Medicare & Medicaid Services on Friday published a notice on the survey in the Federal Register, calling for comments on the survey until March 9. Hospitals have been opposed to the survey, saying the survey request will cost too much and is flawed.

The survey request is in response to a court decision in December 2018 that ruled CMS didn’t have the authority to change the payment rates for 340B. CMS had instituted nearly 30% in cuts in 2018 and 2019 to the program, which requires drug companies to offer discounts to safety-net hospitals in exchange for access to Medicaid markets.

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The ruling said that CMS hadn’t collected the necessary data to set the payment rates based on acquisition costs. So CMS released a proposal back in September to survey hospitals for their acquisition costs for certain covered outpatient drugs.

Hospitals say the agency should just reimburse hospitals in full for the cuts rather than creating a new remedy.

RELATED: CMS retains 340B, site-neutral payment cuts in final hospital payment rule

“Instead of undermining the health care safety net, the agency should withdraw this plan, restore Medicare payments to their statutory levels, and reimburse all affected hospitals for the revenue they have lost since January 2018,” said Maureen Testoni, president and CEO of 340B Health, an advocacy group of more than 1,400 hospitals, in a statement on Friday.

CMS said in the notice that the survey is to help ensure Medicare “pays for specified covered outpatient drugs purchased under the 340B program at amounts that approximate what hospitals actually pay to acquire the drugs.” 

A major criticism from lawmakers of the 340B program is a lack of transparency on how hospitals use savings.