Hospitals unhappy with the CMS site neutral rule as it would cut payments to off-campus clinics

340B providers condemn the Centers for Medicare and Medicaid Services’ proposed rule for site-neutral payments. This rule is going to reduce the rate paid to outpatient off-campus hospital clinics to 40% of their current reimbursement.

Vulnerable patients depend on 340B providers that use the difference between the price they pay for drugs and the amount they get to offset losses from patients who are uninsured or underinsured.

CMS’s proposed rule would pay these clinics at the lower physician fee schedule rate in place of the present and higher outpatient rate.

Clinic visits are the most commonly billed service under the outpatient prospective payment system (OPPS). According to the American Hospital Association, if the OPPS rule for 2019 is implemented, Medicare is estimated to save $760 million in the first year itself.

Bruce Siegel, MD, President and CEO of America's Essential Hospitals said this rule for Medicare outpatient payments would make things worse. It would impose massive cuts that adversely affect health access to vulnerable patients and erode the effectiveness of the safety net.

But, 340B proponents believe that hospitals operate on negative margins. Critics believe that these hospitals use the system to make profits by prescribing more expensive drugs.