The Medicare and Medicaid Service Center spotlights the difference between providers participating in and not participating in drug discount programs in response to the Supreme Court’s ruling to invalidate the 340B payment cut. I am.
Informal policy proposals cheered from 340B hospitals to cancel payment cuts, but some people who did not use the program described the institution’s roadmap as “irresponsible,” and the CMS turned to 340B drugs. We argue that making even less payments is justified.
Both groups are also closely watching how the CMS decides to repay the provider who missed the 340B refund between 2018 and 2022 when the policy was implemented.
“It’s hard to read all the tea leaves, but the CMS seems to be moving towards coherence across different hospitals,” said Anil Shankar, a partner at law firm Foley & Lardner.
Safety net providers have access to low-cost prescription drugs through the federal 340B program. By 2020, approximately 50,000 providers participating in the 340B saved a total of $ 38 billion in medicine, according to data from the University of Southern California.
Since 2018, CMS has paid less for outpatients acquired through the 340B program than other medicines.
Following a Supreme Court ruling, the CMS has announced that it will return to refunds for 340B medications at the same rate as non-340B medications. The court ruled that low payments were illegal because the CMS did not investigate the provider before changing its redemption policy.
The High Court ruled on June 15, just one month before the CMS announced the proposed future payment system rules for outpatients in hospitals in 2023. The final rule.
The path of progress proposed by the CMS has caused anger from the Community Oncology Alliance, which represents an independent practice that is not covered by the 340B. “It’s completely illogical, literally irresponsible and incompetent,” said Executive Director Ted Ocon.
The CMS needs to use the data from the 2020 survey to develop future policies, Okon said. After the American Hospital Association filed a lawsuit over a reduction of 340B, the agency investigated the cost of drug acquisition at Safetynet Hospital. The CMS has found that a 340B refund can reduce the lower rates already set by the agency by about 6%.
However, the survey was conducted in April 2020, during the first few weeks of the intense COVID-19 pandemic. According to law firm Mints, only 7% of eligible entities provided detailed answers and 38% did not.
The CMS proposed a low-priced introduction in 2021, but did not finalize the policy. The agency also does not use 2020 survey data to set rates for next year. The proposed 2023 foreign rules refer to the results, but do not state why the CMS is applying them to rulemaking.
Ignoring the survey data would result in overpayments to hospitals, making it even more difficult for independent practices to be financially successful, Ocon said.
In addition, abolishing reimbursement cuts would cost about $ 1.96 billion for outpatient CMS. The payment system needs to have a neutral impact on the federal budget, so according to the agency, the money will have to come from other outpatient payment sources. The CMS predicts that the conversion factor needs to be reduced from $ 84.177 to $ 83.279.
Participants at 340B see this plan as a step in the right direction. Providers who accept discounts say that the money saved pays for safety net services that would otherwise not be possible.
340B Health, a coalition of hospitals and healthcare systems, called for a mid-year renewal of the 2022 reimbursement rate to eliminate current cuts, but said CMS Maureen Testoni hopes to cancel future cuts. Says.
The American Hospital Association and the American Essential Hospital also supported the decision.
“This is an important step in reversing the damage caused by the significant reduction in outpatient payments obtained through the 340B drug pricing program. The U.S. Supreme Court has unanimously ruled it illegal.” Said Bethfeld Push, Senior Vice President of Policy at Essential Hospital in the United States. Advocacy stated in a statement on the proposed outpatient rules.
Providers on both sides of the dispute are eagerly awaiting news about how the CMS will remedy the redemption cuts from the previous year, which was not covered in the draft outpatient regulations. Instead. The agency asked for comment on how to resolve the reduction.
The Supreme Court only invalidated the 2018 and 2019 payment schemes prior to the CMS investigation, but authorities may also remedy the reductions made between 2018 and 2022. I showed that.
The American Federation of Hospitals, which represents commercial hospitals that are not covered by the 340B, said they wanted to avoid harm to other hospitals by ensuring budget neutrality when the CMS devised a solution. Chip Khan, president and CEO of the federation, said. When the CMS first reduced the reimbursement of 340B in 2018, it spread savings to all hospitals.
“I think it’s very important not to penalize other hospitals,” Khan said. “It would be completely unfair.”
According to Shanker, the CMS may decide to repay the 340B provider in just a few years, or to the provider to a lower rate suggested by the 2020 survey, subject to a Supreme Court decision.
Due to uncertainties, entities subject to 340B need to promote CMS and quickly create the whole for low payments from multiple years, an associate of law firm Polsinelli. Mary Canavan said. It will take the form of lump sum payments, years of payments, or even higher refunds to other services to make up for the lost 340B of money, she said.
“We’re still waiting a bit to see which comments will be submitted and what the CMS will choose in the final rules,” Kanaban said. “It would be as interesting as this proposed rule.”
