HHS proposal would hurt health-care providers and their most vulnerable patients

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While Congress remains gridlocked on health care reform, a significant change is making its way through the regulatory process that could dramatically reduce affordable access to prescription therapies for some of the nation’s most vulnerable patients.

The Centers for Medicare and Medicaid Services (CMS) has proposed drastic cuts to the 340B Drug Pricing Program, which provides the nation’s safety-net hospitals and health-care facilities access to affordable access to prescription drugs for the many low-income patients that they serve. These cuts are buried in a larger CMS draft regulation, the 2018 Hospital Outpatient Prospective Payment System proposed rule, which could be finalized as soon as November if action isn’t taken now to stop it.

{mosads}The 340B Program was created and passed in 1992 by a bipartisan group of Representatives and Senators and continues to enjoy broad bipartisan support because it allows certain eligible hospitals, clinics, and other health care providers, to secure discounted prices on outpatient drugs — including drugs used to treat cancer and rheumatoid arthritis.


The eligible entities are those providers that serve a disproportionate share of low-income patients and rural communities. At its simplest: drug manufacturers that want to be reimbursed by the Medicare and Medicaid programs agree to provide certain outpatient drugs to eligible entities at reduced prices.

These providers include hospitals like UMC Southern Nevada that treated the victims of the tragic Las Vegas shooting massacre, hemophilia treatment centers in my state of Georgia and AIDS clinics in places like Baton Rouge, Louisiana. All of these facilities, which play an integral role in the nation’s safety-net, must comply with a series of stringent federal requirements to qualify for these important discounts.

According to the U.S. Health Resources and Services Administration (HRSA), the federal agency responsible for the program’s implementation and operations, The 340B Program enables covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”

To that end, savings from the 340B Program are being used to provide a wide-range of much-needed care and services, such as opioid use disorder treatment and recovery, diabetes management, cancer care, and oral health care. Savings are also used to waive co-pays and provide pharmaceuticals at free or reduced cost to low-income and other vulnerable patients.

Currently, 340B hospitals make up only 36 percent of the all of the hospitals in the country, but take on 60 percent of the nation’s uncompensated care. Without the 340B Program, low-income, underinsured and underinsured patients could lose critical health care services such as treatment for end-stage renal disease, chemotherapy, immunizations for children, and many others.

Hospital pharmacies would be limited in their ability to provide affordable prescription drugs, which would result in patients going home without essential medication that would help their recovery and prevent a return visit to the hospital. As a physician, I find this extremely troubling.

The proposed nearly 30 percent payment reduction would severely undermine the nation’s safety-net providers’ ability to continue to provide care and services to those most at-risk and in-need. CMS has over-stepped its bounds by targeting Medicare payment cuts to 340B participating hospitals.

If I were still serving in Congress, I would be joining with the group of 228 bipartisan members who just wrote CMS administrator Seema Verma to urge the agency to stand down and rescind its deleterious proposal. Reducing resources to the providers that care for our nation’s most vulnerable patients, families, and communities simply isn’t in line with Congress’ intent for the program.

Of serious concern is that these severe cuts to 340B hospitals likely would increase costs because a reduction in resources for 340B hospitals in turn will cause decreased access to affordable outpatient care for the patients they serve. This will lead to more emergency room visits and more expensive care overall. I know first-hand that patients do better and costs to the system are less when patients can receive high-quality outpatient care in their communities from a provider they know and trust.

The nation’s 340B providers are exactly that — the community safety-net that catches and cares for our nation’s most vulnerable. With all the challenges that abound — chronic disease, life threatening illness, such as Alzheimer’s, stroke, and so many types of cancer — this is a time when hospitals and other providers that care for our most vulnerable need to be bolstered and supported by our Congress and the administration. Unless CMS withdraws its proposal, we put patients at risk. They deserve and need our support.

Philip Gingrey, M.D. is a former U.S. Congressman having served Georgia’s 11th congressional district from 2003 to 2015. He is currently a Senior Adviser with the District Policy Group at Drinker Biddle & Reath LLP. He represents a number of clients including 340B Health, a non-profit organization of over 1300 hospitals participating in the 340B drug pricing program.

Tags 340B Drug Pricing Program Centers for Medicare and Medicaid Services (CMS) HHS Philip Gingrey

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