CMS proposes big 340B drug payment cuts, outpatient rate changes
- CMS on Thursday released the 2018 Hospital Outpatient Prospective Payment System (HOPPS) proposed rule, which includes a major cut to hospital 340B drug payments and a decrease in payment for certain services at newer off-campus hospital outpatient departments .
- The agency states the policies will help to reduce burdens for physicians, promote better patient relationships and lower beneficiary out-of-pocket drug costs for certain drugs. CMS is also requesting ideas on regulatory and policy changes to advance flexibility, administrative simplification and innovation.
- In addition to the HOPPS proposal, CMS issued a proposed rule under the Medicare Physician Fee Schedule to allow knee replacement surgeries at outpatient facilities.
Hospital organizations are criticizing the 340B payment cuts in particular, as well as reduced payments for some outpatient services.
The CMS is proposing to significantly reduce payments under the 340B drug pricing program — which requires drug companies to supply outpatient drugs to certain providers at reduced costs. Hospitals will be paid 22.5% less than the average sales price instead of the 6% in addition to the average sales price they are paid now. The CMS hopes to bring down out-of-pocket spending on drug costs for Medicare patients.
America's Essential Hospitals (AEH) called the 340B changes "deeply damaging." The organization stated the proposal "would cripple 340B’s value as a tool for lowering drug prices and disrupt access to care for those in greatest need, including low-income Medicare beneficiaries. The proposal also runs counter to Congress’ intent for the 340B program: to help hospitals stretch scarce resources."
The American Hospitals Association (AHA) also blasted the 340B changes, and also took aim at the changes to hospital outpatient facility payments, which will include paying 25% rather than 50% of regular outpatient rates to off-campus facilities that started billing after November 2015. "This proposal also appears to have a questionable policy basis and is yet another blow to access to care for patients, including many in vulnerable communities without other sources of health care," AHA executive vice president Tom NIckels said in a statement.
But, the CMS is also slightly increasing outpatient payments. The agency is proposing a fee schedule increase of 1.75% for outpatient facilities and 1.9% for ambulatory surgery centers.
The new measures also propose to allow knee replacement surgeries to be performed in outpatient facilities and surgery centers. If this goes through, charged facility fees relating to such services will be an area to watch, as hospitals owning outpatient and ambulatory assets could potentially charge both hospital and outpatient fees for these services. The proposal could also affect CMS bundled payment programs involving joint replacement.
In addition to those major policy shifts, CMS in the fee schedule rule issued proposals to expand a diabetes prevention program next year. Under the test model, payments would be tied to a patient's weight loss (target is at least 5%). Pay-for-performance has been a hot topic in the industry, as physicians can feel burdened by having their payments tied to patient behavior. This expansion takes the concept of value-based care one step further.
The fee schedule also adds five new services to its telehealth list, such as health risk assessments, care planning for chronic care management and psychotherapy or crisis.
There is a slight irony that the two proposals weigh in at about 1,200 pages considering they show how the HHS under President Donald Trump is looking to rollback regulations and reduce administrative burden for physicians.
An included Request for Information on flexibility and efficiencies builds upon the work the agency has already rolled out this year. Under the Obama administration, the CMS attempted to make programs such as MACRA/QPP flexible for physicians. This year, the organization has allowed flexibility for QPP by proposing the exemption of small providers participating in the program, a move that could exempt about 134,000 clinicians from the program.
The agency also let clinicians continue to use 2014 Certified EHR Technology (CEHRT) as opposed to 2015 CEHRT, although that's also in part because there are not many 2015 CEHRT products available. The RFI builds on these initiatives. "CMS would like to start a national conversation about improving the healthcare delivery system, how Medicare can contribute to making the delivery system less bureaucratic and complex, and how CMS can reduce burden for clinicians, providers and patients in a way that increases quality of care and decreases costs," the agency noted in prepared statement.
Comments will be taken on both rules until Sept. 11.