IHA Daily Briefing: Oct. 2

Wednesday, October 2, 2019
CMS Seeks Info on 340B Drug Acquisition Costs
USDA Distributes Rural Development Project Funds
Report Covers Importance of Social Care in Healthcare

CMS Seeks Info on 340B Drug Acquisition Costs
On Sept. 30, the Centers for Medicare & Medicaid Services (CMS) issued a notice that it intends to collect information from hospitals on the acquisition costs of specified outpatient drugs covered under the 340B drug pricing program. CMS says it plans to use this information to set payment rates based on acquisition costs. Comments are due Nov. 29.

CMS is currently appealing a decision by the U.S. District Court for the District of Columbia that the U.S. Health and Human Secretary “exceeded his statutory authority” by drastically cutting payment rates for 340B drugs through the Outpatient Prospective Payment System (OPPS) in 2018 and 2019. The Court reasoned, in part, that the Secretary had not collected the necessary data to base its payment rates on acquisition costs.

“The government disagrees with that ruling and has appealed. Nonetheless, in the event that the ruling is affirmed, CMS believes that it is important to begin obtaining acquisition costs for specified covered outpatient drugs to set payment rates based on cost for 340B-acquired drugs,” reads the notice. 

“The acquisition cost data hospitals submit in response to this survey will be used to help determine payment amounts for drugs acquired under the 340B program. We want to ensure that the Medicare program pays for specified covered outpatient drugs purchased under the 340B program at amounts that approximate what hospitals actually pay to acquire the drugs. This will ensure that the Medicare program uses taxpayer dollars prudently while maintaining beneficiary access to these drugs and allowing beneficiary cost-sharing to be based on the amounts hospitals actually pay to acquire the drugs.”

IHA will submit comments to CMS and requests feedback from member hospitals on how the proposal could affect your hospital and the patients and communities you serve.

IHA strongly opposed the cuts included in the calendar year 2018 and 2019 OPPS final rules and will work to protect against any future cuts to the 340B program.


USDA Distributes Rural Development Project Funds
On Monday, the U.S. Dept. of Agriculture (USDA) announced $139 million in development loans supporting 56 projects in 23 states, including five projects in Illinois, designed to improve community facilities and provide essential services for 3.3 million rural residents.

The Illinois projects include $28.2 million to Morrison Community Hospital District for a new emergency services department, a mental health room, relocation of business and administrative offices, addition of a surgical suite and remodeling of the front entrance and lab services department; and $19.9 million to Fairfield Memorial Hospital for a new three-story addition and renovations to add space for mental health services, skilled care, and rehabilitation and orthopedic services.

“Modern, accessible and reliable community infrastructure, public safety facilities, schools and health facilities are essential components to strong and prosperous communities,” said USDA Deputy Under Secretary for Rural Development Donald “DJ” LaVoy said.

USDA Rural Development provides loans and grants to help expand economic opportunities and create jobs in rural areas. This assistance supports infrastructure improvements; business development; housing; community facilities such as schools, public safety and health care; and high-speed internet access in rural areas. More than 100 types of projects are eligible for Community Facilities program funding. Eligible applicants include municipalities, public bodies, nonprofit organizations and federally recognized Native American tribes. Projects must be in rural areas with a population of 20,000 or less.

The USDA says it will make additional funding announcements in coming weeks.


Report Covers Importance of Social Care in Healthcare
The National Academies of Sciences, Engineering, and Medicine has released a report—Integrating Social Care into the Delivery of Health Care: Moving Upstream to Improve the Nation’s Health—that provides recommendations for healthcare systems, government agencies, and others to better integrate patients’ social needs into healthcare delivery.

The report outlines two trends driving the need to integrate social care with healthcare:

  • Paying care providers based on health outcomes, rather than for individual visits or services; and
  • Increasing recognition that addressing the social determinants of health — nonmedical factors such as housing, education, neighborhood safety, and employment — has a profound impact on one’s physical and mental health.

Data in the report notes that for every $1 spent on healthcare in the U.S., about 90 cents is spent on social services. In other industrialized countries, for every $2 spent on social services, $1 is spent on healthcare. Social services constitute a variety of activities — including home-help for the elderly, rent subsidies, child allowances and credits, childcare support, job training, and disability benefits. The challenge of financing the integration of social care with health care in the U.S. is a matter of defining what activities are considered social care, and how they should be paid for, says the report.

The report recommends:

  • Better integration of social care into healthcare delivery;
  • Support and train an engaged, integrated care workforce;
  • Develop and infrastructure for data sharing between health and social care; and
  • Finance the integration of healthcare and social care.