WASHINGTON, Feb. 21, 2018 /PRNewswire-USNewswire/ -- Hospitals in Virginia, especially those in rural areas, will benefit from recent changes to Medicare payments, including changes to reimbursement of prescription drugs under a federal program known as the 340B Drug Pricing Program.
On average, Virginia hospitals will see a 2.4 percent increase—or an additional $40,350,196—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 program would bring drastic cuts to hospital reimbursement and threaten their operations. Virginia hospitals are estimated to receive more than $1.7 billion in net Medicare payments as a result of the changes in 2018.
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 Virginia 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 in program reimbursement, which took effect on Jan. 1, would cause them to lose revenue. The Avalere research shows that increases in Medicare Part B payments for non-drug items and services have more than offset the 340B cuts, with 42 states, including Virginia, seeing overall payment increases.
"Some hospitals systems are using loopholes to expand the 340B program beyond its original intent of helping underprivileged patients. In doing so they eliminate local, community oncology clinics as a business strategy to take over the cancer care system," said Pablo Gonzalez, MD, president of Virginia Cancer Institute. "The Avalere data are clear: Virginia hospitals aren't going to lose money from Medicare payment adjustments like they said. It's time they started using 340B to help patients the way the program was intended, instead of irreparably harming the backbone of our cancer care system. When local clinics shut down, patients and families suffer."
According to the most recent COA Practice Impact Report, Virginia has seen 28 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.
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