News: House subcommittee advances bill containing DSH program cuts and transparency requirements for hospitals

According to the American Hospital Association (AHA), the House Energy and Commerce Subcommittee on Health advanced a set of legislative proposals on May 17, aimed at changing Medicaid disproportionate share hospital reductions, price transparency requirements, Medicare site-neutral payment, and the 340B Drug Pricing Program.

The proposal contained a $32 billion cut for the Medicaid DSH program over the next four years. In its testimony before the House, the AHA explained its opposition to the budget cuts:

Reductions to the Medicaid DSH program 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.

Though the AHA applauded the subcommittee for its legislative improvements on price transparency requirements, it opposed the intended site-neutrality payment cuts on the grounds that it would “result in a major cut for hospital outpatient departments (HOPDs) 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.”

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

Commenting on the idea that each outpatient department be assigned a separate unique health identifier from its provider, the AHA expressed it was “very concerned” about the proposal as “past CMS review and approval of similar attestations” were “extremely burdensome and difficult.” As evidence of “similar attestations,” the AHA cited an “extremely inaccurate” CMS audit for site-neutral payment rates submitted two years after the statutory deadline.

The theme of burdensome bureaucratic requirements extended into the AHA discussion of health-related ownership information and the 340B drug pricing program, as well. The first proposal, which would require hospitals to document every time a physician took a job elsewhere, was characterized as “overly burdensome,” “redundant,” and allowed the HHS secretary to have “unrestricted discretion” to add additional reporting requirements for the hospital.

The 340B proposal—which would add new transparency requirements for reporting the number of individuals receiving 340B drugs by payer total costs, payments and savings—was depicted in a similar fashion as “onerous” and “burdensome," placing an unnecessary administrative burden on hospitals who “already report” upon “how much they invest in resources to benefit the community.” 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.

The subcommittee passed a bill including all the above legislative proposals except the 340B measure, with a vote of 27-0. The 340B measure was decided upon in a different bill, passing with a vote of 16-12.

Editor’s Note: Read the AHA news article here. Read the AHA House testimony here.