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Healthcare Orgs Address Price Transparency, 340B Policies in OPPS

AHA also indicated that the payment rate increase proposed in the OPPS is inadequate given the current financial struggles hospitals are facing.

Victoria Bailey
By
Published: 14 Sep 2023

Hospital and specialty groups are urging CMS to amend aspects of the CY 2024 Outpatient Prospective Payment System (OPPS) proposed rule, including 340B Drug Pricing Program policies and price transparency requirements.

The American Hospital Association (AHA), Workgroup for Electronic Data Interchange (WEDI), America’s Essential Hospitals (AEH), and Community Oncology Alliance (COA) sent comments to CMS Administrator Chiquita Brooks-LaSure expressing their concerns.

Payment update

CMS proposed to increase Medicare outpatient payments by 2.8 percent in 2024, reflecting a 3.0 percent market basket update and a 0.2 percentage point reduction for productivity. The agency also proposed a 2.8 percent increase in payment rates for ambulatory surgical centers (ASCs).

AHA called the reimbursement update inadequate.

“It does not capture either the unprecedented inflationary environment or the other persistent financial headwinds hospitals and health systems are experiencing,” the trade organization’s letter stated. “It also fails to account for the fact that labor composition and costs have remained extraordinarily high and that as a result, the hospital field has continued to face sustained financial pressures and workforce shortages.”

AHA requested that CMS reexamine the update and reduce the productivity cut, as it does not align with the productivity losses hospitals and health systems experienced during the COVID-19 pandemic.

AEH also called on the agency to adjust its methodology for calculating the payment update. The group urged CMS to implement a fee schedule increase factor of at least 5 percent, waive the productivity adjustment, and make a one-time retrospective adjustment to account for the low market basket update.

340B Program

The OPPS proposed to continue paying 340B hospitals at average sales price (ASP) plus 6 percent for drugs purchased through the 340B Drug Pricing Program. AHA and AEH urged CMS to finalize this policy in the final rule.

In addition, AHA and AEH requested that the agency finalize and implement a repayment remedy for 340B hospitals following the Supreme Court win against HHS.

The two groups opposed CMS’s use of the 340B claims modifier. The letters said using these modifiers creates administrative burden for hospitals as it requires them to distinguish between 340B discounted drugs and non-340B drugs. Since CMS is reverting to the pre-2018 policy of paying ASP plus 6 percent, the modifiers are no longer relevant, the groups wrote.

While AHA and AEH supported the 340B payment policy, COA felt differently. The Alliance opposed the plan to reimburse hospitals as ASP plus 6 percent for 340B drugs, noting that a CMS survey found that ASP minus 28.7 percent would be a “generous reimbursement rate.”

“The Proposed Rule will provide large 340B hospitals with financial windfalls to the detriment of seniors and other Medicare beneficiaries, who will be paying close to 50 percent more for out-of-pocket drug costs,” COA wrote. “Moreover, CMS’ Proposed Rule is fundamentally flawed, and we recommend an alternative approach to uphold the original intention of the 340B program.  CMS should use survey data on 340B drug acquisition costs, as described below, to establish alternative reimbursement rates for 340B hospitals and reapportion funds for 2021 and subsequent years.”

Price transparency policies

CMS updated price transparency policies in the proposed rule, including stronger enforcement actions and new requirements to display data in a standardized format.

AEH supported efforts to increase transparency but noted that hospitals could face unintended consequences from the requirements.

“We urge CMS to consider retaining flexibility in the CY 2024 OPPS rule to accommodate diverse hospital contracting methodologies and charging practices to mitigate potential implementation challenges and major burdens while still enhancing transparency and standardization in charge data reporting,” AEH said.

WEDI also shared suggestions about price transparency regarding good faith estimates (GFEs) under the No Surprises Act. The group asked CMS to improve current price transparency requirements and allow providers and facilities to post cost estimations online as an alternative to GFEs.

“This approach will permit additional time to develop GFE data standards and automated processes yet still provide patients the information they need to understand and compare costs,” the letter stated. “For example, hospitals could point patients to their price transparency tool required under the Hospital Transparency rule.”

Next Steps

Dig Deeper on Claims reimbursement