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Reps. Kelly, Blunt Rochester Lead Black Caucus Members in Urging CMS to Restore Drug Pricing Payment Rate for Hospitals Serving Low-Income Patients

Sep 29, 2021
Press Release
The Members Are Advocating for Safety-Net Hospitals Participating in the 340B Drug Payment Plan to Receive Higher Medicare Part B Reimbursement Rates

WASHINGTON, DC Congresswomen Robin L. Kelly (D-IL) and Lisa Blunt Rochester (D-DE) recently led 27 of their Congressional Black Caucus colleagues in writing to Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure to request that the agency not extend the Trump Administration’s harmful Medicare payment policy for safety-net hospitals participating in the 340B drug pricing program. The members request that CMS instead re-instate the previous policy which reimbursed 340B hospitals at the same rate as non-340B hospitals.

Despite overwhelming bipartisan opposition, the Trump Administration implemented drastically lower payment rates for many hospitals participating in the 340B drug pricing program, slashing Medicare Part B reimbursement for high-cost drugs by almost 30%,” wrote the Members. “Since the cuts began, 340B hospitals, subject to the cuts, have collectively lost hundreds of millions of dollars, harming their ability to fund critical services for patients.” 

340B hospitals are a critical source of care for patients of color who are often underserved and subject to inequities that impair their access to quality health care and outcomes. 340B hospitals also serve a high proportion of Medicare beneficiaries, many of whom are Black, disabled, and/or living with low incomes. These hospitals also serve a high proportion of patients of color who are living with chronic conditions such as asthma, diabetes, heart disease and chronic obstructive pulmonary disease.

We applaud Congresswoman Kelly and the members of the Congressional Black Caucus for their leadership in support of safety-net hospitals serving patients with low incomes and those living in rural communities,” said 340B Health President and CEO, Maureen Testoni. “Eliminating the long-standing inequities in health care is a national priority and 340B hospitals play a critical role. The Medicare payment cuts implemented by the previous administration are making that work much more difficult and we hope that CMS heeds the advice of these CBC members and reverses this damaging policy.”

Full text of the letter is available here.


Background on the 340B Program

Section 340B of the Public Health Service Act requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to health care organizations that care for many uninsured and low-income patients. These organizations include community health centers, children’s hospitals, hemophilia treatment centers, critical access hospitals (CAHs), sole community hospitals (SCHs), rural referral centers (RRCs), and public and nonprofit disproportionate share hospitals (DSH) that serve low-income and indigent populations.

The program allows 340B hospitals to stretch limited federal resources and expand health services to the patients and communities they serve. Hospitals use 340B savings to provide free care for uninsured patients, offer free vaccines, provide services in mental health clinics, and implement medication management and community health programs.                         


Robin Kelly



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