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Statement on Avalere Analysis of 340B Payment Policy in 2018 OPPS


WASHINGTON—Avalere has produced a badly misleading report on the impact of 340B Drug Pricing Program payment cuts under the 2018 Outpatient Prospective Payment System (OPPS).

Avalere’s analysis, funded by the Community Oncology Alliance, makes no attempt to focus on or isolate the 340B drug payment policy. Rather, it conflates the cuts with policy changes completely unrelated to 340B—the annual market basket update, for example — skewing the conclusions in a way that masks the real harm of the 340B policy.

This report also ignores the Centers for Medicare & Medicaid Services’ (CMS’) own analysis, in the OPPS final rule, of the negative effects of the cuts on urban, disproportionate share, and teaching hospitals. According to that CMS analysis, urban hospitals with more than 500 beds will see a 2.2 percent cut due to the 340B drug payment reduction; major teaching hospitals will experience a 2.4 percent cut, and government hospitals will see a 1.6 percent cut.

The 340B payment cuts subvert the very intent of the 340B program by taking savings away from the safety net. For hospitals that operate on narrow margins — those that fill a safety-net role and depend most on 340B savings — the payment cuts are unsustainable and will harm patient care and lifesaving services to communities.

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Carl Graziano


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