Press Release

Statement on Proposed CY 2018 OPPS Rule

Tom Nickels
Executive Vice President
American Hospital Association

July 13, 2017


Today, CMS issued several poorly designed policies that will do real damage to patients’ access to care.

For 25 years, the 340B Drug Pricing program – which enjoys broad, bipartisan support – has been critical in expanding access to lifesaving prescription drugs to low-income patients in communities across the country. The patients who benefit from the much-needed 340B program are the ones who will have their access to care threatened.  

Cutting Medicare payments for hospital services in the 340B program is not based on sound policy. Additionally, this proposed rule punishes hospitals for a policy outside of CMS’ jurisdiction. It is unclear why the Administration would choose to punitively target 340B safety-net hospitals serving vulnerable patients, including those in rural areas, rather than addressing the real issue: the skyrocketing cost of pharmaceuticals.

CMS repeatedly cites the fact that Medicare expenditures on drugs are rising due to higher drug prices as an impetus for its proposal. And indeed, according to the agency itself, drug spending grew 12.6 percent in 2014, 9 percent in 2015, and an additional 5 percent in 2016. It projects that this trend will only continue, particularly as a result of high-cost specialty drugs, with average annual increases of 6.4 percent from 2017-2025. Yet, its proposed 340B policy change does nothing to directly tackle this issue. We strongly urge CMS to abandon its misguided 340B proposal and instead take direct action to halt the unchecked, unsustainable increases in the cost of drugs.

CMS at the same time is proposing further cuts to Medicare rates for services hospitals provide in “new” off-campus hospital outpatient departments. This proposal also appears to have a questionable policy basis and is yet another blow to access to care for patients, including many in vulnerable communities without other sources of health care.

Further, we remain concerned that the agency’s continued short-sighted policies on the relocation of grandfathered off-campus provider-based departments will prevent communities from having access to the most up-to-date services. America’s hospitals and health systems will continue to urge CMS to provide payments that are adequate to cover the costs of providing care so that we can continue to serve as the access point for community care. 

Finally, we are dismayed that CMS does not propose relief from unrealistic and unachievable Stage 3 reporting requirements that begin on Jan. 1, 2018. The mandate for all hospitals and critical access hospitals to switch to new EHR functionality and report for a full year is unattainable and is at odds with the meaningful use flexibility proposed for eligible clinicians in the Quality Payment Program proposed rule.

We will work with Congress and the Administration to reverse these harmful and ill-advised policies.

About the AHA

The AHA is a not-for-profit association of health care provider organizations and individuals that are committed to the health improvement of their communities. The AHA is the national advocate for its members, which include nearly 5,000 hospitals, health care systems, networks, other providers of care and 43,000 individual members. Founded in 1898, the AHA provides education for health care leaders and is a source of information on health care issues and trends. For more information, visit the AHA website at

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