WHA Joins 23 State Hospital Associations in 340B Amicus

December 01, 2017

In early November, the Centers for Medicare & Medicaid Services (CMS) finalized the 2018 Outpatient Prospective Payment System (OPPS) rule, which included significant cuts to certain 340B providers. In doing so, 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 on this payment cut.

In response, the American Hospital Association, Association of American Medical Colleges, America’s Essential Hospitals and three health care providers filed suit against CMS (AHA v. Hargan). A preliminary hearing on the lawsuit will be held December 21. Further, the Wisconsin Hospital Association is joining dozens of other state hospital associations across the country that will be filing an amicus brief in support of the health care providers in AHA v. Hargan.

“For multiple reasons, especially the negative impact payment cuts will have on certain 340B providers, WHA opposes the overreach by CMS in instituting this new policy,” said WHA President/CEO Eric Borgerding. “We welcome the opportunity to stand with 23 other state hospital associations in support of our impacted safety-net providers against this damaging policy.”

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) plus 6 percent. Instead, it will now reimburse 340B drugs at ASP minus 22.5 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. For Wisconsin, impacted covered entities are 340B Disproportionate Share Hospitals.

“This payment cut will reduce important funding for Wisconsin’s safety-net hospitals unless stopped before being implemented on January 1, 2018,” said Borgerding. “These cuts on top of misguided policies included in other pending legislation, such as the elimination of the tax exemption for private activity bonds and advance refunding, continue to push not-for-profit hospitals into further financial, policy and regulatory instability.” 

This story originally appeared in the December 01, 2017 edition of WHA Newsletter