Medicare proposes to reduce hospital reimbursement for 340 billion drugs
Medicare wants to cut payments to hospitals for drugs acquired under the 340B drug rebate program by more than a third starting next year, after the agency said its investigations found that some patients paid more for drugs than hospitals did.
Under a proposal released Thursday, Medicare would pay hospitals $340 billion for drugs at their average selling price minus 33.4 percent, significantly less than what they currently receive, which is that price plus 6 percent. The provision, part of a proposed rule on hospital outpatient payments, represents the latest development in what has become a highly controversial drug discount program, seen by some as a lifeline for safety-net hospitals and by others as a profit center for wealthy health systems.
The proposal was quickly condemned by groups representing teaching and nonprofit hospitals, who said it would disproportionately harm safety-net providers. In fact, only these non-profit establishments are eligible for 340B, unlike for-profit hospitals. Medicare’s proposed rule provides a 7.4% wage increase for for-profit hospitals under the 340B adjustment.
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