Medicare has proposed a reduction in payments to hospitals for drugs acquired through the 340B drug discount program by more than a third beginning next year, a move that has drawn immediate criticism from hospital advocacy groups. The agency cited findings from its own surveys suggesting some patients paid more for the drugs than the hospitals did, according to a proposed rule released on Thursday.
The 340B drug discount program allows eligible hospitals to purchase outpatient medications at discounted rates. The program is viewed by some as a lifeline for safety-net hospitals and by others as a profit center for wealthy health systems. Under the new proposal, Medicare would reimburse hospitals for 340B drugs at the average sales price minus 33.4%, a significant shift from the current payment model, which is that price plus 6%.
The adjustment is part of a broader proposed rule on hospital outpatient payments, which also includes a 7.4% pay increase for for-profit hospitals under the 340B adjustment. This disparity has intensified concerns that the policy disproportionately harms safety-net providers, as only nonprofit facilities are eligible for 340B, while for-profit hospitals are not.
Why the 340B Program Matters
The 340B program was designed to allow qualifying hospitals and clinics to buy drugs at reduced prices. Critics argue that the program has become a profit center for some, while supporters say it is a lifeline for safety-net hospitals.
Reactions from Hospital Groups
Industry groups representing nonprofit and academic hospitals have condemned the proposal, saying it would disproportionately harm safety-net providers.
What’s Next for the Proposal?
The proposed rule is a latest swing at what’s become a hotly debated drug discount program.
Key Takeaways
- Medicare proposes a reduction in payments to hospitals for drugs acquired through the 340B drug discount program by more than a third.
- The 340B program is viewed by some as a lifeline for safety-net hospitals and by others as a profit center for wealthy health systems.
- For-profit hospitals would receive a 7.4% increase in reimbursement under the 340B adjustment.
For the latest updates on the proposed rule, visit the Centers for Medicare & Medicaid Services (CMS) website. Readers are encouraged to follow developments in this evolving story and share their perspectives on the impact of healthcare policy decisions.