AHA statement on CY 2021 Outpatient PPS rule

Tom Nickels
Executive Vice President
American Hospital Association

August 4, 2020


Today’s proposed rule from CMS continues to threaten the financial viability of hospitals and health systems and their ability to provide care for patients during the coronavirus pandemic. 

First, we adamantly oppose the proposed rule’s deepening of cuts in payments for 340B drugs. These cuts decimate the intent of the 340B program and only exacerbate the strain placed on hospitals serving vulnerable communities. These cuts also conflict with Congress’ clear intent and defer to the government’s inaccurate interpretation of the law. For more than 25 years, the 340B program has helped hospitals stretch scarce federal resources to reach more patients and provide more comprehensive services to vulnerable communities. Today’s proposal will result in the continued loss of resources for 340B hospitals at the worst possible time.

In addition, we strongly oppose attempts to loosen the current restrictions on physician-owned hospitals. The Congressional Budget Office, Medicare Payment Advisory Commission and independent researchers have concluded that physician self-referral to facilities in which they have an ownership stake leads to greater per capita utilization of services and higher costs for the Medicare program. Further, physician-owned hospitals tend to cherry-pick the most profitable patients, jeopardizing communities’ access to full-service care. This trend creates a destabilizing environment that leaves sicker and less-affluent patients to community hospitals, threatening the health care safety net.

Finally, we are concerned about CMS’s proposal to eliminate over three years the inpatient-only list, which was put into place to protect beneficiaries. Many of the services on the inpatient-only list are surgical procedures that may be complex, complicated, and require the care and coordinated services provided in the inpatient setting of a hospital. We’ll be evaluating this proposal carefully.

In light of the substantial flaws with CMS’s current approach to hospital star ratings, we appreciate that the agency is exploring ways of improving the methodology. We look forward to reviewing the proposed methodology changes in depth.

We have to maintain access to critical care during the fight against COVID-19 and these changes move us in the opposite direction. 


Contact:        Colin Milligan, (202) 638-5491, cmilligan@aha.org
                      Marie Johnson, (202) 626-2351, mjohnson@aha.org