Hospital groups rail against CMS' proposed 340B changes, site-neutral payments
Public comments for the latest OPPS proposed rule saw several major hospital groups all but threatening a court showdown over CMS' planned policy changes.
Healthcare systems are expressing strong opposition to recent policy changes proposed by the Centers for Medicare and Medicaid Services (CMS) regarding 340B drug pricing and hospital payments. In public comments submitted to the agency, industry groups including the American Hospital Association (AHA), America's Essential Hospitals (AEH), and the Association of American Medical Colleges (AAMC) argue the changes will harm patient care delivery and are potentially unlawful.
The proposed July 2027 Hospital Outpatient Prospective Payment (OPPS) and Ambulatory Surgical Center (ASC) Payment Systems rule includes a 2.4% annual rate increase, cuts to imaging services, and a significant reduction in payments for drugs acquired through the 340B program. These changes, coupled with other policy shifts from the One Big Beautiful Bill Act, are expected to hit hospitals particularly hard during the implementation period.
The AHA, AEH, and AAMC claim the 340B rate adjustment violates the statute and is "straightforwardly unlawful," pointing to shortcomings in a survey conducted by CMS to justify the cut. They argue the survey did not meet statutory requirements for a representative sample of hospitals or for accurate payment variance. The groups also question whether the adjustments will achieve CMS' goal of reducing health spending and beneficiary costs.
The Federation of American Hospitals (FAH), representing for-profit hospitals, supports the proposed rate change, claiming it aligns with Congress's directive, reduces beneficiary cost-sharing, and directs Medicare funds to smaller and rural hospitals without increasing Medicare spending. However, AHA, AEH, and AAMC disagree, arguing that the aggregate increase in non-drug service payments will likely raise overall beneficiary cost-sharing, especially for dually eligible patients.
They urge CMS to reconsider the changes, considering the financial impacts of reducing payments to 340B program participants, especially in the context of other policy and industry challenges.
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