The Centers for Medicare & Medicaid Services today proposed to update hospital outpatient prospective payment system rates by 1.75% in calendar year 2018 compared to CY 2017. The rule also would drastically cut Medicare payment for drugs that are acquired under the 340B Drug Pricing Program. Specifically, CMS proposes to pay separately payable, non pass-through drugs (other than vaccines) purchased through the 340B program at the average sales price minus 22.5%, rather than ASP plus 6%. “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,” said AHA Executive Vice President Tom Nickels. “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...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.” Today’s OPPS rule also proposes changes to site-neutral policies under Section 603 of the Bipartisan Budget Act of 2015. Section 603 requires that, with the exception of dedicated emergency department services, services furnished in off-campus provider-based departments that began billing under the OPPS on or after Nov. 2, 2015 no longer be paid under the OPPS, but under another applicable Part B payment systems. The physician fee schedule proposed rule released today would pay hospitals at 25% rather than 50% of the OPPS rate for non-excepted services in 2018. “CMS at the same time is proposing further cuts to Medicare rates for services hospitals provide in ‘new’ off-campus hospital outpatient departments,” Nickels said. “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.” Among other changes, the OPPS proposed rule would reinstate for CYs 2018 and 2019 the moratorium on enforcement of the direct supervision policy for outpatient therapeutic services for CAHs and small rural hospitals with 100 or fewer beds. In addition, CMS proposes to delay implementation of the outpatient and ASC CAHPS survey-based measures in the Outpatient Quality Reporting program until further notice. The rule also would remove six quality measures from the OQR. CMS does not propose relief from the Stage 3 reporting requirements that begin on Jan. 1, 2018. AHA members will receive a Special Bulletin with further details tomorrow. Comments are due Sept. 11.