Proposal to cut Medicare drug reimbursements could hamper care

An advocacy group says the Centers for Medicare & Medicaid Services proposed cuts to Medicare drug payments would backfire and cause those hospitals to serve less patients and provide fewer services. (Photo: Shutterstock)

In an attempt to bring down out-of-pocket drug costs for Medicare patients, the Centers for Medicare & Medicaid Services has proposed cutting Medicare drug payments to hospitals serving low-income and other disadvantaged communities in the government’s so-called 340B program. But an advocacy group for hospitals and other providers that participate in the program contend that CMS’s proposal would actually backfire and cause those hospitals to serve less patients and provide fewer services.

The 340B program, established by Congress in 1992, requires drug manufacturers to sell certain outpatient drugs at discounts to health care providers that serve low-income and other disadvantaged populations. The providers, in turn, use their 340B drug savings to serve more patients and provide more services at no cost to the government, according to 340B Health, which represents more than 1,300 hospitals and other providers participating in the program.