Hospital Groups Dig In After Cuts To Discount Drug Program

Hospital groups are vowing to push forward with a fight against the Trump administration over changes to a federal drug discount program following a setback last week.

The American Hospital Association (AHA), America’s Essential Hospitals and the Association of American Medical Colleges last year sued to block a rule from going into effect that would result in $1.6 billion in cuts to hospitals participating in the 340B Medicare drug discount program.

The program requires drug companies to give eligible hospitals serving a large number of low-income patients steep discounts for some drugs.

Medicare then reimburses these hospitals at a higher rate than what they paid for drugs, allowing the facilities to take the savings and reinvest into services to help their patients.

U.S. District Judge Rudolph Contreras dismissed the groups’ case last week, ruling that the suit was premature since the changes hadn’t yet taken effect.

The groups said they will continue to pursue the lawsuit now that the cuts have taken effect.

Lobbyists and hospital groups are also pushing for Congress to reverse the rule through the government funding bill expected to pass in January or another must-pass bill.

“Making cuts to the program, like those [the Centers for Medicare and Medicaid Services] has put forward, will dramatically threaten access to health care for many communities with vulnerable patients,” said Rick Pollack, president and CEO of AHA.

“We are disappointed in this decision from the court and will continue our efforts in the Courts and the Congress to reverse these significant cuts to the 340B program.”

The administration’s rule, which officially took effect Monday, cuts reimbursement rates to hospitals participating in the drug program.

Drug companies and other critics say the program has grown out of control in recent years, arguing hospitals use the extra money to pad their bottom lines, not to help low-income patients.

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