How 340B payment cuts are affecting the oncology practice?

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How 340B payment cuts are affecting the oncology
practice?
CMS released the proposed Outpatient Prospective
Payment System - OPPS rule for 2018 which
includes a major proposed cut for separately
payable drugs purchased under the 340B
program. The proposal would reduce reimbursement
for separately payable Medicare Part B drugs
purchased at 340B prices. Reimbursement would
drop from average sales price plus 6 to ASP
minus 22.5. CMS says its goals are to lower
Medicare fee-for-service beneficiaries'
out-of-pocket costs which are equal to 20 of
Medicare's payment rate for the drug and to
curtail increases in drug spending associated
with the expansion of the 340B program. The 340B
proposal would reduce an important source of
funding for safety-net hospitals Congress
created the 340B program in 1992 to inject more
funds into safety-net providers. The program
requires drug manufacturers to sell outpatient
drugs to 340B providers known as "covered
entities" at significant discounts.   In
practice, covered entities continue to bill
health plans for outpatient drugs as usual and
use the enhanced drug margin to offset the costs
of uncompensated care and unprofitable
services.
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How 340B payment cuts are affecting the oncology
practice?
340B hospitals with large infusion centers will
experience the biggest reduction in revenues The
proposed cuts would apply only to separately
payable drugs covered under Medicare Part B.
These are provider-administered drugs, including
injected or infused treatments for cancer,
rheumatoid arthritis, and multiple sclerosis
among other conditions. The cuts would not impact
outpatient drugs covered under Part D, which can
also be purchased by covered entities at 340B
prices. All hospitals including those without
340B will have to change the coding for
separately payable drugs Although the proposal
would not change reimbursement for non- 340B
providers, it would increase the risk
that non-340B hospitals would lose revenues due
to coding errors. In the proposed rule, CMS
specifies that hospitals billing Part B for
separately payable drugs would need to add a
modifier to claims to indicate that the drug was
not purchased at 340B prices. If the modifier is
omitted, then Medicare would assume the drug was
purchased at 340B prices and would reimburse the
hospital at the reduced rate of ASP -22.5. Thus
all hospitals would have to change how they code
separately payable drugs, regardless of their
340B status. The burden would fall to hospitals
to indicate that they are owed the higher
reimbursement rate.
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How 340B payment cuts are affecting the oncology
practice?
The proposal does not address drug manufacturers'
concerns about 340B The 340B program has long
been controversial, and drug manufacturers are
among the biggest critics. They contend that the
program has been abused by providers and that
HRSA, the agency which administers the program,
needs to step up oversight to ensure that
providers are allocating their enhanced drug
margins to uncompensated care. Notably, the
proposed OPPS rule does not address these
concerns or make any concessions to drug
manufacturers. Regardless of whether CMS
finalizes its proposal to cut reimbursement for
340B drugs, all hospitals should take steps to
improve their infusion centers' financial
performance. Hospitals should invest dedicated
financial counseling resources to help uninsured
patients enroll in coverage, underinsured
patients tap into external sources of financial
assistance, and well-insured patients understand
and plan for their out of pocket costs.
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How 340B payment cuts are affecting the oncology
practice?
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