Hospitals demand CMS drop 340B, site-neutral cuts in OPPS due to court rulings

billing statement from a doctor's office
Hospital groups are unhappy the Centers for Medicare & Medicaid Services continued with 340B and site-neutral payment cuts despite recent court rulings. (9dream studio/Shutterstock)

Hospital groups sought to give the Trump administration a legal lesson by saying that cuts in the latest hospital payment rule were deemed unlawful in recent rulings.

Major groups targeted cuts to the 340B drug discount program and the continued phase-in of site-neutrality cuts in comments to the hospital outpatient payment system (OPPS) rule. Comments on the Centers for Medicare & Medicaid Services (CMS) rule ended Friday.

A federal judge recently ruled that CMS exceeded its authority when it instituted payment cuts to physician offices within hospitals to better align them with physician offices outside of a hospital.

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The American Hospital Association (AHA) blasted CMS’ decision to complete the phase-in of the payment cuts in the 2020 payment rule.

“CMS has not only undermined clear congressional intent, but has threatened to impede access to care, especially in rural and other vulnerable communities,” the AHA said.

Hospitals also complained of CMS’ decision to install another round of cuts to the 340B drug discount program.

RELATED: Hospital groups sue HHS over long-delayed 340B final rule

The payment rule calls for cuts at a rate of the average sales price of a 340B drug minus 22.5%. The previous payment rate reimbursed drugs to charity care hospitals up to 6% more than the average sales price.

A federal judge also found that the cuts were unlawful in a lawsuit brought by several hospital groups challenging CMS.

Several hospital groups complained of CMS’ insistence on including the cuts again in the 2020 payment rule.

“As a remedy for the adverse outcome in its 340B Program litigation, CMS should refund payments to each affected 340B hospital calculated using the “JG” modifier, which identifies claims for 340B-acquired drugs that were reduced under the CY 2018 and CY 2019 hospital OPPS final rules,” said the Association of American Medical Colleges in comments.

However, the federal judge that struck down the cuts decided to not grant hospitals’ calls for relief for the 2018 and 2019 rules because of the complexity of Medicare.

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