CMS proposes $9 billion repayment to safety net hospitals
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The Centers for Medicare and Medicaid Services is proposing lump-sum payments to reimburse safety-net hospitals for about $9 billion in illegal discount drug program cuts from 2018 to 2022.
Yes, but: The payments will come at the expense of other hospitals under a proposal released Friday, because CMS wants the reimbursements to be budget-neutral, over the objections of leading industry groups.
- The agency is proposing to claw back an estimated $7.8 billion in overpayments to other hospitals, including rural hospitals and children's hospitals.
Catch up quick: The repayment plan to facilities in the federal 340B discount drug program stemmed from a unanimous Supreme Court decision that found the agency made illegal program cuts, because federal officials didn't first conduct a survey of hospitals' acquisition costs.
- The program lets hospitals with a high percentage of poor patients buy drugs at cheaper prices and keep the savings, but it has drawn fire from critics who say hospitals profit excessively off the program.
- Since savings from the program cuts were already applied for other purposes, officials had to find new payfors, and settled on Medicare overpayments to non-340B facilities.
What they're saying: Hospital groups are happy with the lump-sum approach but concerned about clawbacks.
- "We are disappointed the remedy payments would include no interest and be budget neutral," said Bruce Siegel, president of America's Essential Hospitals. "The administration's plan to cut non–drug payments to hospitals to achieve budget neutrality unnecessarily blunts the impact of the remedy by ensuring years of future underpayments."
- "The AHA is disappointed that HHS has chosen to recoup funds from other hospitals that cannot afford additional Medicare payment cuts, including rural sole community, cancer and children's hospitals that were initially exempted from HHS' illegal policy," said Rick Pollack, president of the American Hospital Association.
What's next: The CMS proposal is open to public comment until early September, and the agency will make a final repayment decision in the fall.
