The Trump administration has introduced a new rule aimed at reducing costs for Medicare patients. This is intended to prevent hospitals from charging surcharges for discounted medications for Medicare patients.

It is estimated that this regulation could generate savings of up to $1.1 billion dollars for next year. The primary focus is on hospitals serving low-income patients under the 340B program, allowing medications to be purchased at reduced prices.

Under the proposed rule, the Centers for Medicare and Medicaid Services would modify the formula to determine what expenses hospitals participating in the program can receive, in an effort to reduce costs for patients, notes the Associated Press (AP).

In contrast, the American Hospital Association has expressed concern about the financial impact that the new regulations could have on its members. The group warns that reduced reimbursements could compromise hospitals' ability to offer essential services and maintain affordable access to health care.

“These proposals will undermine hospitals' ability to maintain essential services and protect affordable access to health care for those who rely on the 340B program,” said Ashley Thompson, the group's senior vice president of public policy analysis and development.

Context of the proposal

This move by the administration comes in an election year, in an effort to address growing financial pressure on U.S. households. This proposal is an evolution of previous attempts to modify Medicare payments, which have been met with legal challenges in the past.

An analysis of the regulations shows that hospitals can currently receive significantly higher amounts in reimbursements compared to what they pay for drugs through the 340B program. The new rule would seek to adjust this disparity, although with the risk that this would negatively impact the income of local health institutions.

Steps Hospitals Can Take to Adapt

Hospitals can combine operational, financial and clinical measures to offset reduced reimbursements, seeking to protect quality of care while improving efficiency and diversifying revenue.

Operations and efficiency

Financial management and billing

Purchasing and supply control

Personnel management and work models

Income diversification and care models

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