Essential hospitals rely on 340B Drug Pricing Program savings to care for communities and patients with complex needs — a commitment that results in average operating margins of just 3.2 percent, less than half of other U.S. hospitals. Savings from the program keep that gap from growing and free up resources essential hospitals use for care beyond affordable drugs.
The Centers for Medicare & Medicaid Services (CMS) recently proposed drastic cuts to reimbursement for Medicare Part B drugs prescribed at hospitals in the 340B program. If these 2018 Outpatient Prospective Payment System (OPPS) proposals are made final, they would reduce Part B drug reimbursement by about 27 percent and significantly erode the value of the 340B program. Further, CMS would redistribute the savings across all hospitals, whether the hospitals are eligible for the 340B program or not, and regardless of their safety-net role.
We urge Congress to ask CMS to withdraw its harmful 340B proposal and focus on more effective ways to drive down prescription drug costs in Medicare. Any actions CMS or Congress take to alleviate rising drug prices must preserve the 340B program as a vital tool for keeping drugs affordable and supporting the health care safety net. By cutting reimbursement rates for Part B drugs to 340B hospitals, CMS would harm essential hospitals, which care for the nation’s poorest, most complex, and costliest patients.