WASHINGTON -- The Centers for Medicare and Medicaid Services (CMS) continued with its move to slash payments to the 340B drug program, in spite of court rulings against such actions, according to a .
Also, CMS will push forward with a site-neutral approach in reimbursement for outpatient services, according to the rule released Friday.
In 2018, CMS made cuts to reimbursements under the , which a federal judge struck down twice. For 2020, CMS once again said it would reduce payments.
CMS stated in a press release that the regulation "further advances the agency's commitment to strengthening Medicare, rethinking rural health, unleashing innovation, reducing provider burden, and strengthening program integrity so that hospitals and ambulatory surgical centers can operate with better flexibility and patients have what they need to become active healthcare consumers."
The agency stressed that the changes to the Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System are consistent with President Trump's October 3 executive order on Medicare reforms.
Cuts to 340B
Participants in the program buy certain outpatient drugs at a discounted price from manufacturers.
In 2018, having analyzed the appropriateness of Medicare's reimbursement policy of Average Sales Price (ASP) plus 6% for drugs obtained through the 340B program, and taking into account these "steep" discounts, CMS said it would pay ASP minus 22.5% "for certain separately payable drugs or biologicals bought through the 340B Program (by an entity that is not exempted from the policy change)," according to a .
In December 2018, U.S. District Judge Rudolph Contreras ruled that HHS Secretary Alex Azar acted outside of his authority in cutting 340B payments by 22%, and vacated the cuts, according to .
In May 2019, Contreras that the cuts established by the 2019 OPPS rule were unlawful and "in contravention of the Medicare Act's plain text."
For 2020, CMS has again said it would pay ASP minus 22.5%, in spite of federal court rulings that oppose such actions.
CMS, acknowledged "that the United States District Court for the District of Columbia vacated the volume control policy for CY 2019 and we are working to ensure affected 2019 claims for clinic visits are paid consistent with the court's order ... The government has appeal rights, and is still evaluating the rulings and considering, at the time of this writing, whether to appeal from the final judgment."
Maureen Testoni, president and CEO of 340B Health, said in a press statement that for the past 3 years, CMS has "ignored the needs of patients and the safety-net hospitals that care for them" by implementing "unlawful" cuts to Medicare payments for 340B hospitals.
"A federal court has ruled repeatedly that these cuts are inconsistent with the Medicare statute and must be reversed. A bipartisan majority in both houses of Congress has agreed. It's time to stop this unfunny version of '' and restore Medicare payments for 340B hospitals to their legal, statutory level," Testoni said.
Tom Nickels, executive vice president for the American Hospital Association (AHA), also expressed frustration with the continued drive to axe 340B payments.
"After previous cuts to the 340B program were ruled illegal, and overturned in court because they exceeded the Administration's authority, continuation of that policy is wholly unwarranted," he argued.
Beth Feldpush, DrPH, senior vice president of Policy and Advocacy for America's Essential Hospitals, said the policy changes threaten hospitals caring for underserved communities, especially low-income and uninsured patients.
"Their commitment to this mission means they operate with barely positive margins, on average, and would struggle to serve their communities should these cuts persist," Feldpush said in a press release.
But one group, Community Oncology Alliance (COA), saw the situation differently. Ted Okon, COA executive director, praised CMS "for bravely standing firm and taking a stand against the hospital corporatization and consolidation of American health care in the 2020 OPPS final rule."
Okon said that both the site parity payments and 340B reforms, demonstrate the agency's commitment to correcting "long-standing, well-documented flaws in our nation's health policy."
"For far too long, hospitals have been given a free pass by Washington, taking advantage of public policies to gobble up cancer care providers, reduce patient choice, and dramatically drive up healthcare spending. These policies are fantastic news for the seniors on Medicare and taxpayers who will now benefit greatly from reduced out-of-pocket spending when dealing with cancer care and other illnesses."
COA's on the 340B Drug Pricing program is that discounts should "follow the patient," and not be "awarded" to a hospital, Okon said.
Site-Neutral Payment
Medicare beneficiaries often pay more for the same type of care that they would receive in a physician's office if they received that care in the hospital outpatient setting, a explained.
The new rule advances the CMS 2-year phase-in of policies aimed at erasing those payment differences, and curbing the unnecessary increase in the use of outpatient services, particularly in the off-campus hospital outpatient setting.
CMS will boost payment for hospitals that meet their quality reporting requirements by 2.6%. The update is based on "the projected hospital market basket increase of 3.0 percent minus a 0.4 percentage point adjustment for multi-factor productivity (MFP)," according to the agency.
Applying the same , CMS also updated ASC rates for 2020 to 2.6% for those centers that meet their quality reporting requirements. "This change will also help to promote site-neutrality between hospitals and ASCs and encourage the migration of services from the hospital setting to the lower cost ASC setting," according to CMS.
The agency estimates that following the 2-year phase-in, the changes would reduce cost sharing to $9, and save beneficiaries on average $14 with every visit to an off-campus clinic in 2020. CMS also estimated $800 million in savings to the Medicare program and taxpayers in 2020.
Nickels argued that the continued cuts to hospital outpatient clinics threaten access to care especially in "rural and vulnerable communities" and ignore "congressional intent" that aims to protect access to clinic services.
"There are many real and crucial differences between hospital outpatient departments and the patient populations they serve and other sites of care," Nickels stated. "Now that a federal court has sided with the AHA and found that these cuts exceed the Administration's authority, CMS should abandon further illegal cuts ... [and] promptly repay the affected hospitals the full OPPS rate to support the work they do for the patients they serve, said Nickels in a press release."
Other Updates
Additional changes in the OPPS Rule include reducing the number of requirements organ procurement organizations must meet in order to be eligible for certification; implementing prior authorization requirements for procedures that are often cosmetic in nature, such as botulinum toxin injections, panniculectomy, rhinoplasty, and vein ablation; and updating the minimum level of supervision required for outpatient therapeutics at critical access hospitals from "direct" to "general supervision."
"General supervision means that the procedure is furnished under the physician's overall direction and control, but that the physician's presence is not required during the performance of the procedure," the agency noted.
Finally, the rule also strips the Inpatient Only (IPO) list of several services including total hip arthroplasty, six spinal surgical procedures, and certain anesthesia services.
Click here to read 51˶'s coverage of ambulatory surgery centers and reimbursement for fee-for-service Medicare beneficiaries.