Tom Nickels, Executive Vice President, American Hospital Association

December 2, 2020

Today's final rule from CMS is a blow to America's hospitals and health systems as they strive to continue to provide care for patients during the coronavirus pandemic.

The continuation of deep cuts in payments for 340B drugs undermines the effectiveness of the 340B program and exacerbates the strain placed on hospitals serving vulnerable communities. These cuts conflict with Congress' clear intent, perpetuate the Administration's inaccurate interpretation of the law, as well as its failure to protect the program from continued assaults by drug companies. For nearly 30 years, the 340B program has helped hospitals stretch scarce federal resources to reach more patients and provide more comprehensive services to vulnerable communities. Continued cuts will result in the further loss of resources for 340B hospitals at the very worst possible time as COVID-19 cases and hospitalizations continue to climb across the country.

The AHA also continues to oppose CMS's loosening of longtime restrictions on physician-owned hospitals, as today's rule does. The Congressional Budget Office, Medicare Payment Advisory Commission and independent researchers all agree that physician self-referral to facilities in which they have an ownership stake leads to greater utilization of services and higher costs. In addition, physician-owned hospitals have a tendency to cherry-pick their patients, which leaves sicker and less-affluent patients to community hospitals, threatening the health care safety net.

Finally, we have concerns about the elimination over three years of the inpatient-only list, which serves to protect patients. The services on the inpatient-only list are often complex and complicated surgical procedures that require the close care and coordinated services provided in a hospital inpatient setting.

We do appreciate that CMS has made changes to the hospital star ratings methodology that address many - but not all of its substantial flaws. We urge the agency to continue exploring ways to ensure the methodology is fair to hospitals, and meaningful to patients.