WHA Expresses Concerns Over CMS Survey of 340B Hospitals

March 12, 2020

On March 9, WHA submitted comments expressing concerns to the Centers for Medicare & Medicaid Services (CMS) over its plans to survey all 340B hospitals about their drug acquisition costs. CMS has proposed to collect pricing data from all participating 340B hospitals beginning on March 23 and closing on April 10. This is being done in response to a federal judge declaring CMS acted unlawfully in slashing hospital 340B reimbursements by nearly 30% in the 2018 OPPS rule, something WHA has estimated will cost Wisconsin 340B PPS hospitals about $40 million annually. The judge noted that CMS would have to collect the data necessary to set payment rates based on acquisition costs if it wanted to alter payments.
WHA noted its strong support of the 340B prescription drug discount program, which helps hospitals stretch scarce federal resources at a time when Medicare underpayments are at $2.5 billion annually in Wisconsin alone. Hospitals have little ability to control the growth in prescription drug spending, which continues to grow far beyond Medicare reimbursement for hospital drug costs. CMS’ actions to reduce payments to 340B hospitals continue to undermine the goal of the program.
In requesting CMS to withdraw its proposal, WHA noted the burden the survey will have on hospitals, which dedicate, on average, 59 FTE just to comply with government regulations. 340B hospitals already incur considerable costs to comply with current 340B program requirements, and the new survey could add considerable time, effort and complexity – particularly for hospitals that obtain 340B drugs through wholesaler purchase arrangements that may have specific nondisclosure conditions.
Contact WHA Director of Federal & State Relations Jon Hoelter with questions.

This story originally appeared in the March 12, 2020 edition of WHA Newsletter