AACI Weighs in on 340B Rule

On November 1, the Centers for Medicare and Medicaid Services (CMS) released their rule for Medicare Programs Hospital Outpatient Prospective Payment Systems (OPPS). The rule would cut Medicare payments for drugs provided by 340B safety net hospitals from average sales price (ASP) plus 6% to ASP minus 22.5%. This amounts to a cut of $1.6 billion a year to 340B hospitals, beginning January 1, 2018.

Following the release of the rule, AACI asked cancer center government relations colleagues to estimate the impact a cut to 340B will have on AACI cancer centers. Several AACI cancer centers reported that nearly 100 percent of their patient population currently benefits from 340B. With this in mind, AACI wrote to Congressional leaders on November 16, stating the administration’s decision will impact those most in need: patients. AACI highlighted how the 340B Drug Pricing Program has increased cancer centers’ ability to serve lower income and underserved patients, without absorbing exorbitant drug costs. AACI added that the program has been a beacon of hope for patients seeking cures, while helping them avoid financial ruin.

Prior to the rule’s release, CMS asserted that a change was needed to prevent hospital abuse of the program. AACI communicated to House Speaker Paul Ryan and Leader Nancy Pelosi, and Senate Leaders Mitch McConnell and Chuck Schumer, that CMS’ decision to cut reimbursement to cancer hospitals participating in the 340B program threatens to derail access to lifesaving treatments and therapies, especially for uninsured and underserved patients. AACI argued that CMS’ decision would do little to deter such abuse and would instead lead to an increase in out-of-pocket costs patients incur for non-drug Medicare Part B benefits. AACI concluded that it the letter by saying the association would support a thorough review of the existing 340B program before such drastic changes are imposed.

The American Hospital Association, Association of American Medical Colleges and America’s Essential Hospitals, as well as Eastern Maine Healthcare Systems in Brewer, ME, Henry Ford Health System in Detroit and Adventist Health System’s Park Ridge Health in Hendersonville, NC, filed a lawsuit in early November to try to block CMS’ decision, arguing the rule is unlawful and exceeds the authority of the Secretary of Health and Human Services. U.S. District Court Judge Rudolph Contreras will hear the arguments of the lawsuit on December 21.

Representatives David McKinley (R-WV) and Mike Thompson (D-CA) introduced H.R. 4392, a bipartisan bill that would overturn the cut. The bill currently has 64 cosponsors. AACI is encouraging cancer centers whose patients might be impacted by the CMS rule to ask their legislators to cosponsor H.R. 4392.