fah hospital policy blog

Perspectives on health policy affecting America’s hospitals and the patients we serve.

FAH Comments on HHS Blueprint to Lower Drug Prices

July 17, 2018 | FAH Policy Blog Team

Category: Pharmaceuticals, Transparency

The Federation of American Hospitals (FAH) sent a letter Monday to HHS Secretary Alex Azar commenting on the agency’s recently released Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs.

One of the most noteworthy parts of the Blueprint involved the possibility of moving some drugs from Medicare Part B to Part D.

FAH wrote that it “opposes the move of any non-self-administered drugs provided in the hospital outpatient setting from Medicare Part B to Medicare Part D in light of patient safety and access risks, the risk of increased Part D premiums, and beneficiary financial burdens, and administrative and operational burdens.”

HHS also asked about the effects of a site neutral payment policy for physician-administered drugs.

“FAH opposes site neutral payment for drug administration procedures because it is inappropriate and unworkable, is inconsistent with the principles of a prospective payment system, and would negatively impact patient access and quality of care,” the comment letter states.

Another topic addressed by FAH was site neutrality between inpatient and outpatient settings. FAH noted the fundamental differences in the IPPS and OPPS that warrant disparate payment for drugs but also emphasized the importance of relying on a physician’s professional judgement to determine whether a patient should be treated in the inpatient or outpatient setting.  As such, the Federation argued, it would be fundamentally unfair to reduce hospitals’ payments given a hospital’s limited involvement with that determination.

The FAH comment letter also discussed possible “unintended consequences” when and if HHS attempts to regulate Pharmacy Benefit Managers (PBMs), especially if the agency is considering making changes to the Anti-Kickback Statute (AKS) discount safe harbor and the group purchasing (GPO) safe harbor.

“We caution that HHS should consider that various stakeholders across the health care supply chain, not simply PBMs, rely on these safe harbors to provide legal certainty for certain business arrangements that achieve lower costs for providers and Medicare beneficiaries.”

FAH also outlined for HHS changes that could be made to increase competition and pricing transparency.

You can read the complete comment letter by clicking here.