$1.6B in Medicare payment cuts likely to cripple struggling hospitals

From Becker’s:

Medicare payment cuts under the 340B Drug Pricing Program pose a potential financial threat to nonprofit hospitals serving vulnerable patients, according to a report from S&P Global Ratings.

The $1.6 billion reduction in Medicare payments, put in motion Jan. 1, was part of CMS’ 2018 Medicare Outpatient Prospective Payment System Rule. The reduction is reached by paying hospitals 22.5 percent less than the average sales price for drugs purchased through the 340B program.

While many larger 340B hospitals and systems won’t see direct effects from the cuts due to their size and scope, smaller participating providers and rural hospitals could see a greater financial effect, according to S&P.

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