As urged by the AHA and others, a Centers for Medicare & Medicaid Services advisory panel today recommended that the agency not finalize for 2018 a proposal that would drastically cut Medicare payments for drugs acquired under the 340B Drug Pricing Program. In July, CMS proposed 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%. Instead of implementing the proposal, CMS’s Advisory Panel on Hospital Outpatient Payment today recommended that the agency collect data from public comment and other sources about the proposal’s impact and how CMS should shift the savings if such a cut were implemented. In addition, the HOP Panel urged CMS to assess the proposal’s regulatory burden, especially from a proposed CMS modifier that differs from some state Medicaid program methodology. Testifying on behalf of the AHA at today’s hearing, Peegan Townsend, vice president of government affairs at MedStar Health, and Kathy Talbot, MedStar’s vice president for rates and reimbursement, discussed how CMS’s proposed payment cut would threaten access to care for patients in vulnerable communities. For example, MedStar Health uses 340B savings to help fund a no-charge clinic for uninsured patients in Baltimore; an after-hours clinic that provides free health care at a Washington, D.C. homeless shelter; and subsidies for discharge prescriptions and transportation for underserved populations in southern Maryland. The AHA has urged CMS to abandon the 340B proposal and instead take direct action to halt the unchecked, unsustainable increases in the cost of drugs. Comments on CMS’s proposal are due Sept. 11.

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