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'Burdensome' and 'Difficult': The AHA Takes Aim At New Legislations

Analysis  |  By Amanda Norris  
   May 31, 2023

Changes under new legislative proposals (from 340B requirements to site-neutral payments) could cost hospitals big if approved.

Changes to the Medicaid disproportionate share hospital (DSH) program, price transparency requirements, Medicare site-neutral payments, and the 340B drug pricing program, are potentially underway according to recent legislative proposals advanced by the House Energy and Commerce Subcommittee on Health.

Quick to respond to the proposals was the American Hospital Association (AHA), which voiced its opposition to the budget cuts and more in its written testimony before the House.

According to the AHA, the reductions to the Medicaid DSH program—which under the proposal would see a $32 billion cut over the next four years—were enacted as part of the Affordable Care Act, with the reasoning that hospitals would have less uncompensated care as health insurance coverage increased.

“Unfortunately, the projected coverage levels have not been realized and hospitals continue to care for patients for whom they are not receiving payment. Consequently, the need for the Medicaid DSH payments is still vital for the hospitals that rely on the program,” the AHA said.

As expected, the AHA applauded the subcommittee for its legislative improvements on price transparency requirements, but it opposed the intended site-neutrality payment cuts on the grounds that it would “result in a major cut for hospital outpatient departments that provide essential drug administration services, including for vulnerable cancer patients, who may require a higher level of care as they receive their essential treatments.”

The AHA said that the site-neutrality cuts would “exacerbate” the financial instability of hospitals and health systems already reeling from these payment cuts and, most importantly, threaten patients’ access to quality care.

The 340B proposal—which would add “new and burdensome reporting requirements” for the number of individuals receiving 340B drugs by payer total costs, payments, and savings—is considered overly burdensome by the AHA. The AHA says that none of these data points individually or collectively will tell the full story of how 340B hospitals use the program to benefit the patients and communities they serve.

Instead of advancing the 340B proposal, the AHA encouraged the subcommittee to reign in the largest drug companies who have restricted and denied hospitals access to 340B drugs and placed the financial health of critical access hospitals in jeopardy.

Amanda Norris is the Associate Content Manager of Finance, Payer, Revenue Cycle, and Strategy for HealthLeaders.

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