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The Centers for Medicare & Medicaid Services (CMS) should withdraw its proposal to reduce Medicare Part B payment for drugs acquired through the 340B Drug Pricing Program, AHA yesterday told the agency in comments on its outpatient prospective payment system proposed rule for calendar year 2018.

“CMS lacks statutory authority to impose such a drastic reduction in the payment rate for 340B drugs, effectively eviscerating the benefits of the program,” wrote AHA Executive Vice President Tom Nickels. CMS proposed to pay for separately payable, non pass-through drugs acquired through the 340B program at the average sales price minus 22.5%, rather than ASP plus 6%.

“Rather than punitively targeting 340B safety-net hospitals serving vulnerable patients, including those in rural areas, we urge CMS to redirect its efforts to halt the unchecked, unsustainable increases in the price of drugs,” Nickels said.

Among other comments, the AHA opposed the removal of total knee replacement, as well as partial hip arthroplasty and total hip arthroplasty procedures from the inpatient-only list. The AHA supported CMS’s proposal to reinstate the moratorium on enforcement of some direct supervision requirements for outpatient therapeutic services provided in critical access hospitals and small and rural hospitals, but urged the agency to make the enforcement moratorium permanent and continuous. The association also supported the agency’s proposal, with certain revisions, to update its laboratory date-of-service billing policies.

Regulatory relief. In separate comments on the proposed rule, the AHA laid out actions that CMS could take to immediately reduce the regulatory burden on hospitals, health systems and the patients they serve. AHA submitted its comments in response to the agency’s request for information on flexibilities and efficiencies.

The suggestions range from suspending the agency’s faulty hospital star ratings to cancelling Stage 3 meaningful use requirements for electronic health records and permanently prohibiting the enforcement of direction supervision requirements in critical access and small or rural hospitals.

In its comment letter, the AHA noted that it is assembling a report for release later this fall that will “catalogue the full sweep of regulatory requirements in a way that provides a holistic view of the combined burden imposed on hospitals and health systems.”

The AHA offered “one small example: of the volume of recent regulatory activity: in 2016, CMS  and other agencies of the Department of Health and Human Services released 49 hospital and health system-related rules, comprising almost 24,000 pages of text.

Those regulatory requirements do not include the “increasing use of sub-regulatory guidance (FAQs, blogs, etc.) to implement new administrative policies,” wrote the AHA’s Nickels. “In addition to the sheer volume, the scope of changes required by the new regulations is beginning to outstrip the field’s ability to absorb them.”