HEALTHCARE/MEDICARE/OBAMACARE(ACA)/TRUMP AS PRESIDENT: “The Trump administration said it is slashing a lucrative pharmaceutical subsidy Medicare pays some hospitals, prompting the American Hospital Association and other powerful hospital groups to threaten legal action to block the move.
In a rule released Wednesday [11-1-17] evening, the federal agency that runs Medicare said it would sharply lower what Medicare pays for certain drugs that certain hospitals buy and administer to patients through the subsidy program.
The program, known as 340B, was created in 1992 and was designed to help hospitals with large numbers of uninsured patients. It has grown rapidly in recent years.
Hospitals eligible for the program buy drugs from pharmaceutical companies at a steep discount, and are currently reimbursed by Medicare at a rate that is 6% above what the average national sale price for that drug is. Hospitals keep the difference, which they use to finance operations or expand services to patients, the AHA has said.
But critics of the program say the significant margin on the drugs incentivizes hospitals to overuse certain drugs or choose high-priced options. A Government Accountability Office report in 2015 found substantially higher drug spending per Medicare beneficiary at hospitals that received the subsidies.”
-Melanie Evans, “Hospitals Vow Fight to Keep Medicare Drug Subsidies,” The Wall Street Journal online, Nov. 1, 2017 07:55pm