COA: Analysis Shows Arkansas Hospitals Benefit From Recent Changes In Medicare Payment

WASHINGTON, Feb. 8, 2018 /PRNewswire-USNewswire/ -- Hospitals in Arkansas, especially those in rural areas, will benefit from recent changes to Medicare prescription drug payments, including changes to a federal program known as the 340B Drug Discount Program. On average, Arkansas hospitals will see a 2.9 percent increase—among the largest statewide increases in the United States—in Medicare payments related to the changes.

These findings are included in new research released by Avalere Health, a nonpartisan DC-based firm that analyzes the impact of health policies. The study dispels misinformation being touted by some large, corporate hospitals that the new payment system and changes to the 340B Drug Discount Program would bring drastic cuts to hospital reimbursement and threaten their operations.

Started by Congress in 1992, the 340B program gives certain hospitals and clinics that treat high numbers of uninsured or underinsured patients steep discounts on drugs purchased. The program has grown substantially, morphing into a profit-generating program for most hospitals who can make upwards of 50 percent profits selling drugs purchased at a discount to insured patients. Today, nearly half of all acute care hospitals participate in the 340B program. Recognizing that it is being abused by some hospitals, the government sought to reduce the profit motivation by adjusting the payment rate for drugs purchased through 340B beginning this year.

"Contrary to what the public and Congress is being told, the vast majority of America's hospitals, and in particular rural hospitals, are benefitting from recent Medicare's payment changes," said Ted Okon, executive director of the Community Oncology Alliance (COA) which commissioned the study. "All Arkansas hospitals benefit from the recent 340B and Medicare changes, not just a select few. What's more, consumers will save money in lower drug co-pays, so everyone wins."

Experts from the Centers for Medicare & Medicaid Services (CMS) predict that the changes to 340B payments will save seniors an estimated $320 million in drug copayments nationally in 2018 alone.

Many 340B hospitals have predicted that reductions to the program, which took effect on Jan. 1, would cause them to lose revenue. The Avalere research shows that increases in Medicare Part B payments have more than offset the 340B cuts, with 42 states, including Arkansas, seeing overall payment increases.

"This issue matters to cancer doctors, because hospitals have used the 340B program to swallow up independent oncology practices. Patients should be able to receive care in the setting most convenient to them, and that's not always a hospital-owned facility," said Stephen G. "Fred" Divers, MD, an oncologist at Genesis Cancer Center in Hot Springs and a member of the COA board. "The well-intentioned 340B drug discount program became a business strategy for some hospitals to acquire or shut down independent community cancer clinics, which are the backbone of the country's cancer care system. We look forward to new policy initiatives that will help participating 340B institutions use the program to enhance the care for our most vulnerable patients."

According to the most recent COA Practice Impact Report, Arkansas has seen 13 community oncology clinics close or merge into the hospital setting since 2008. This results in less choice in local cancer care providers and significantly higher costs to patients for the exact same cancer care.

The Avalere analysis comes on the heels of an independent study released last week in the New England Journal of Medicine (NEJM) which found that the 340B program driving consolidation of the nation's cancer care system into the much more expensive hospital system; is associated with hospitals administering more cancer drugs; and has not resulted in any clear expansion care or lower mortality for needy patients.

The Avalere study and methodology are available at https://www.communityoncology.org/20180126_opps-analysis-final/.

About the Community Oncology Alliance: COA is a non-profit organization dedicated to advocating for community oncology practices and, most importantly, the patients they serve. COA is the only organization dedicated solely to independent community oncology where the majority of Americans with cancer are treated. The mission of COA is to ensure that cancer patients receive quality, affordable, and accessible cancer care in their own communities. For more than 15 years, COA has built a national grassroots network of community oncology practices to advocate for public policies that benefit cancer patients. To learn more about COA, visit www.CommunityOncology.org. Follow COA on Twitter at www.twitter.com/oncologyCOA. Follow COA on Facebook at www.facebook.com/CommunityOncologyAlliance.

SOURCE Community Oncology Alliance

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http://www.communityoncology.org