Bipartisan letter from Congress urges CMS to drop 340B drug program proposal from OPPS

In a rare bipartisan effort from Congress, 228 members of the House of Representatives urged CMS to abandon a proposal from the 2018 OPPS proposed rule which would drastically cut payments for hospitals participating in the 340B drug discount program.

The program currently allows eligible hospitals in vulnerable communities to receive discounts on the purchase of prescription drugs and allows those hospitals to use the money they would have spent on prescription drugs for programs which enhance patient access to care. CMS currently reimburses hospitals for separately payable drugs at standard average sales price (ASP) plus 6%.

In the OPPS proposed rule, however, the agency proposed dramatically reducing reimbursement for participating hospitals to ASP minus 22.5%, despite admitting that CMS does not know how much hospitals pay for these prescription drugs and therefore cannot know how much savings this cut would generate.

In a letter to CMS Administrator Seema Verma, the members of the House of Representatives said they have “many concerns” about CMS’ claim that the proposal would address high drug costs for Medicare beneficiaries and would reduce Medicare beneficiaries’ drug copayments. The letter noted that many Medicare patients do not pay their own copayments, as 86% of all Medicare beneficiaries have supplemental coverage where copayments are paid by others.

“This program is a lifeline for the hospitals that serve our most vulnerable patients,” said Representative Mike Thompson in a press release. “These arbitrary cuts will do nothing to improve patient care or address rising costs in the Medicare program. Instead, they simply jeopardize access to the treatments and services that 340B hospitals provide.”

The letter comes after CMS’s own advisory panel urged CMS to drop the 340B proposal during the Hospital Outpatient Payment panel at CMS in August.