Feds Aim to Tighten Drug Payment Loophole, Save Taxpayers Billions
A new proposed rule would cut Medicare reimbursement by 40 percent on prescription drugs for providers who already get large discounts.
CEI expert Jeremy Nighohossian was cited by the Epoch Times in their explanation of rule 340b in hospitals.
Large hospitals are able to use the 340B program in ways Congress did not envision, which has inflated prescription drug prices, according to some experts.
Because of poor design, [the program] has caused enormous distortions in the healthcare industry as hospitals reconfigured their systems so that they would qualify for the program,” Jeremy Nighohossian, a senior fellow and economist Competitive Enterprise Institute, told The Epoch Times by email.
The 340B program was designed to aid struggling safety-net providers. But if even one hospital or clinic in a large network qualifies for the discount, it can be used by any provider in the system.
About 80 percent of these discounts go to about 1,000 hospitals and their tens of thousands of subsidiary hospitals, physician practices, outpatient centers, and freestanding surgery centers.
“Essentially, 340B allows certain providers to purchase prescription drugs at a reduced price. They then charge the payers, including Medicaid and Medicare, the full price, allowing them to pocket the discount,” Nighohossian said.
Read the full article at The Epoch Times.