340B Legal, Legislative Advocacy Begins Over CMS Reimbursement Cut

November 17, 2017

On November 1, the Centers for Medicare & Medicaid Services (CMS) finalized a significant cut under the 2018 Outpatient Prospective Payment System (OPPS) rule that impacts certain 340B providers who bill under the OPPS. In finalizing this policy, CMS ignored the voice of a majority of both the U.S. Senate and U.S. House of Representatives and unified opposition from 340B providers. The response from 340B covered entities and organizations representing them has been quick and aggressive, including a lawsuit and legislation.

On November 13, the American Hospital Association, the Association of American Medical Colleges, America’s Essential Hospitals and three hospital providers filed suit against the federal Department of Health & Human Services over the policy. The lawsuit seeks an immediate injunction to stop the policy from taking effect in January. On the legislative front, bipartisan legislation to stop the payment cuts was introduced by Reps. David McKinley (R-WV) and Mike Thompson (D-CA). The legislation was introduced as HR 4392. The Wisconsin Hospital Association supports HR 4392 and urges Wisconsin’s House Members to cosponsor the bill.

As a reminder, under the new policy CMS will no longer reimburse certain 340B covered entities at the normal Medicare OPPS reimbursement rate of the Average Sales Price (ASP) +6 percent. Instead, beginning January 1, 2018, it will reimburse 340B drugs at ASP -22 percent—an almost 30 percent reduction in reimbursement. This payment change applies to separately payable drugs. It does not apply to vaccines or pass-through payments. Certain 340B providers, liked critical access hospitals and others, will not be impacted by the policy. Refer to Valued Voice story for more details.

This story originally appeared in the November 17, 2017 edition of WHA Newsletter