340B cuts sting struggling hospitals, hurt credit ratings, S&P says

A recent report from Standard and Poor's Global Market Intelligence warns that significant cuts to the 340B Drug Pricing Program could severely weaken or impair the already-struggling nonprofit hospitals that relied on savings obtained from it.

A recent report from Standard and Poor's Global Market Intelligence warns that significant cuts to the 340B Drug Pricing Program could severely weaken or impair the already-struggling nonprofit hospitals that relied on savings obtained from it. CMS has decreased the reimbursement rate for 340B medications paid under Medicare Part B to average sales price minus 22% from plus 6%, leading to a more than $1 billion cut. The report states, "They will serve fewer patients, which in turn would add to the burdens on some hospitals, because patients without options tend to seek treatment from hospital emergency rooms or clinics. Federally qualified health centers include public housing primary care clinics, homeless clinics, HIV clinics, and some cancer centers." Health systems and groups such as the Association of American Medical Colleges and America's Essential Hospitals have unsuccessfully sued the federal government to stop the cut's implementation. An appeal could be possible, however. A federal appellate court is weighing revisiting that decision because judges might examine whether HHS was within its own authority and whether the cuts were implemented properly, the report says.