GNYHA recently submitted comments to the Centers for Medicare & Medicaid Services (CMS) opposing its proposed hospital survey of 340B drug acquisition costs. CMS could use information from the “Hospital Survey for Specified Covered Outpatient Drugs” to determine future Medicare payments for drugs acquired under the 340B Drug Pricing Program and/or as a possible remedy to a recent court finding that the current Medicare Part B payment policy is unlawful.

GNYHA urged CMS to rescind the survey, arguing that this intended use would undermine the 340B program by cutting payments to safety net hospitals and impose excessive burden on our members.

Protecting the 340B Program

GNYHA emphasized that the 340B program’s savings enable eligible safety net hospitals to provide important community benefits through various programs and services. If CMS uses the survey information to cut payments to hospitals for 340B-acquired drugs, it would substantially reduce or eliminate 340B savings, which is counter to the program’s intent “to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” GNYHA also pointed out that such a policy fails to recognize the additional costs incurred by 340B participants to ensure program compliance.

GNYHA also argued the following about the burdensome survey:

  • Department-level reporting is unnecessary. This level of detail would be difficult to provide and offers no apparent benefit because a drug’s acquisition cost is the same across departments
  • Hospitals should not be required to report data at the billable unit level. Reporting data at the Healthcare Common Procedure Coding System (HCPCS) level versus the National Drug Code (NDC) level requires hospitals to crosswalk NDCs to the applicable HCPCS codes and recalculate each drug’s acquisition cost at the billable unit level, which is a complex, time-consuming task
  • The template should be simplified and modified. GNYHA recommended that CMS make changes to the proposed template, including pre-populating some fields to reduce burden and ensure consistent reporting

GNYHA argued that the Secretary of Health and Human Services is not authorized to conduct such a survey on a select group of hospitals—such as 340B hospitals—because it is required by law to “…have a large sample of hospitals that is sufficient to generate a statistically significant estimate of the average hospital acquisition cost for each specified covered outpatient drug.” Confidentiality clauses in wholesaler contracts also could make survey compliance difficult for hospitals.

CMS’s notice on its proposed Hospital Survey for Specified Covered Outpatient Drugs is here and supplemental documents are here.