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ASHP Comments on Hospital Outpatient Prospective Payment for Calendar Year 2019

Centers for Medicare & Medicaid Services

September 24, 2018

[Submitted electronically to]
Ms. Seema Verma
Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-1695-P
P.O. Box 8013
Baltimore, MD 21244-1850

Re: Docket No. CMS-1695-P for “Medicare Program: Proposed Changes to Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Requests for Information on Promoting Interoperability and Electronic Health Care Information, Price Transparency, and Leveraging Authority for the Competitive Acquisition Program for Part B Drugs and Biologicals for Potential CMS Innovation.”

Dear Ms. Verma:

ASHP is pleased to submit comments to the Center for Medicare & Medicaid Services (CMS) regarding the proposed changes to the hospital outpatient prospective payment system (OPPS) for calendar year 2019 (the “OPPS rule”). ASHP represents pharmacists who serve as patient care providers in acute and ambulatory settings. The organization’s 45,000 members include pharmacists, student pharmacists, and pharmacy technicians. For more than 75 years, ASHP has been at the forefront of efforts to improve medication use and enhance patient safety.

ASHP’s comments on the OPPS rule center on two proposals — the cuts to reimbursement for drugs acquired under the 340B Drug Pricing Program and the cuts to payment for hospital clinic services provided in hospital outpatient departments. Both proposals threaten patient access to vital services as well as established care models. We urge CMS not to finalize these changes for 2019. Additionally, we offer feedback on the Competitive Acquisition Program (CAP) Request for Information (RFI) included in the OPPS rule.

I. Reduction of 340B Reimbursement for Off-Campus Hospital Outpatient Departments

ASHP strongly supports the 340B drug discount program and we are deeply troubled by CMS’s continued insistence that the program contributes to high drug costs. Many of our members practice in 340B-participating hospitals and health systems and have seen firsthand how the federal 340B program allows providers to stretch scarce resources. Just as we opposed last year’s reimbursement cuts for Part B drugs purchased pursuant to the 340B program (hereinafter “340B drugs”), we oppose cutting the reimbursement for 340B drugs purchased by off-campus, nonexcepted hospital outpatient departments (HOPDs) to Average Sales Price (ASP) minus 22.5%.

The federal 340B program is essential to many hospitals’ ability to provide care to uninsured and underinsured patients. The discounts received through the program not only enable patient access to free or low-cost medications, but they also help offset the total cost of uncompensated care, which may include critical services such as chemotherapy and HIV treatments. Hospitals serving the poor shoulder more of the financial burden of caring for patients who are uninsured or underinsured. Unlike other settings, where insurance coverage or ability to pay may be a requirement for service, covered entities within the federal 340B program are often the sole option for poor or uninsured patients to receive care. Absent discounts on 340B-purchased drugs, many covered entities may struggle to keep their doors open, as they would be unable to absorb the cost of providing uncompensated care to the most vulnerable patients.

CMS justifies the proposed change as a means to ensure that hospitals are not improperly incentivized “to move drug administration services for 340B-acquired drugs to nonexcepted off-campus [Provider-Based Departments] to receive a higher payment amount for these drugs.” However, CMS asserts no evidence for this claim. In fact, care shifts to hospital outpatient departments are the result of a multitude of factors, including efforts to better integrate care through innovative models such as accountable care organizations. Based on CMS’s justification for the policy change, hospitals will, in effect, be penalized for their efforts to improve care coordination and efficiency and reduce costs for patients by shifting care to the site that best meets clinical needs. Further, CMS notes that unnamed “commenters” suggested the proposed cut to reimbursement for 340B drugs purchased by HOPDs. Given that concerns have arisen regarding the validity of certain comments submitted to CMS about the reimbursement for 340B drugs purchased by hospitals under Part B , referring simply to “commenters” as a justification for a large-scale policy change seems arbitrary and inconsistent at best. Finally, considering that the 340B cuts contained in the OPPS CY 2018 final rule are the subject of ongoing litigation , CMS should wait until the court has opined before extending them to HOPDs. Continuous changes to drug reimbursement are disruptive and complicate provider efforts to accurately budget and strategically plan to meet patients’ needs.

Although ASHP commends CMS for its efforts to rein in drug costs, targeting the 340B program deprives patients of critical services and support that are not otherwise compensated. Therefore, we urge CMS not to finalize the proposed change. It should be noted that the 340B program represents only a fraction of total drug expenditures. There are many contributing factors to higher drug costs, but there is no objective evidence that the program has increased overall drug pricing, much less patient out-of-pocket costs. In fact, the 340B program is revenue-neutral, benefiting patients without increasing costs for federal payors. For more comprehensive policy solutions to drug pricing, we encourage CMS to review the proposals outlined by the Campaign for Sustainable Rx Pricing to target drug prices as well as patient out-of-pocket costs.

II. Site-Neutral Payment for Hospital Outpatient Departments

ASHP opposes the reduction of reimbursement for hospital clinic visits provided at grandfathered HOPDs. On the basis of site neutrality, CMS proposes to cut reimbursement at HOPDs for hospital clinic visits (the most commonly billed code – G0463) by 40% to match the rate paid under the Physician Fee Schedule (PFS). This change is in direct violation of Congressional intent to grandfather certain HOPDs, as provided in the Bipartisan Budget Act of 2015 and the 21st Century Cures Act. Hospitals relied on those two pieces of legislation to determine how best to develop their care delivery models and to allocate their clinical and financial resources, and they further relied on CMS’s interpretations of the laws to guide their actions. CMS’s precipitous reinterpretation of these laws is regulatory overreach that threatens patient care.

Hospitals do not indiscriminately assign patients to receive care at HOPDs. Instead, care delivery models are crafted to ensure that patients receive the highest quality care possible. For hospitals that belong to ACOs or are otherwise part of an integrated network, seeing patients at the HOPD allows providers to better coordinate care, resulting in improved patient outcomes. Drastic alterations in payment for HOPD services raises concerns about the long-term viability of these care delivery models – if services are cut or HOPDs are closed, patient access will suffer.

Additionally, CMS seems to assume that the care provided at HOPDs in no way differs from that provided by physicians’ offices. This ignores the fact that the care provided at HOPDs, including what CMS terms “check ups”, is often highly complex and complementary to acute care the patient receives from the hospital. Care provided at HOPDs is held to high quality standard, with more oversight than what is often required for alternate sites of care. In addition to the Medicare Conditions of Participation, HOPDs must meet accreditation, USP, and even FDA requirements. These standards result in high-quality patient care, but at a higher cost than what can be accomplished without the oversight. We urge CMS not to make reimbursement cuts that will ultimately harm patient access and care quality.

III. Competitive Acquisition Program (CAP)

ASHP shares CMS’s commitment to addressing the high cost of prescription drugs. However, we caution CMS against proposing a variation of the Part B Drug Payment Model (the “Part B Model”) proposed in March 2016. ASHP generally supports efforts to innovate around purchasing, particularly when innovations reduce out-of-pocket costs for patients. However, we will oppose large-scale demonstrations that fundamentally change purchasing without sufficient stakeholder input or notice, such as the Part B Model proposed under the previous administration. To assist CMS in identifying potential concerns with a CAP, we have attached a copy of our comments on the Part B Model.

ASHP anticipates that any proposed CAP or value-based purchasing programs would be tested on a small scale, ideally through a voluntary demonstration project, with significant stakeholder engagement and input. Furthermore, to ensure the development of effective value-based payment models, including indications-based payment models, it is imperative that HHS fully engage with pharmacists at the outset of model development. Pharmacists are the medication experts on the healthcare team, with more medication-specific knowledge and training than any other clinician. Beyond their general medication knowledge, pharmacists are also best situated to provide essential insight into many of the questions outlined in the RFI. However, we cannot accurately comment until we are presented with concrete policy proposals. Thus, we urge CMS to publish potential model designs for notice and comment, with timelines that allow for considered discussion and revision.

Thank you for your consideration of our comments. We continue to support CMS’s efforts to improve patient care and reduce patient costs, and we stand ready to assist the agency in any way possible. Please contact me if you have any questions about ASHP’s comments on the proposed rule. I can be reached by telephone at 301-664-8696 or by email at [email protected].


Jillanne Schulte Wall, J.D.
Director, Federal Regulatory Affairs