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Federal Issues

The Oregon Association of Hospitals and Health Systems actively monitors legislative and regulatory activities in Washington, D.C., and maintains regular contact with members of the Oregon Congressional delegation to ensure that federal policy serves the needs of Oregon hospitals and patients. With our active involvement, OAHHS members have a voice in the federal policymaking process.
 

Preserve the 340B Program

Created in 1992, the 340B program requires manufacturers to make outpatient drugs available at a substantial discount to health care facilities that care for uninsured and low-income people.
Critical access hospitals, sole community hospitals, rural referral centers, children’s hospitals, and public and non-profit Disproportionate Share Hospitals that serve low-income and indigent populations are eligible to participate in the program.

The U.S. Health Resources and Services Administration (HRSA), which administers the 340B program, estimates that enrolled hospitals and other covered entities can achieve average savings of 25 to 50 percent in pharmaceutical purchases.

These savings reduce the price of prescription drugs for patients, save considerable federal funds, enable Oregon providers to expand services offered to patients, and provide services to more patients.

The program currently faces two threats. First, in CY 2018 Outpatient PPS proposed rule, CMS cut payments to 340B providers by 28.5 percent. This rule is being challenged in court and in Congress.

Second, some in Congress – encouraged by the pharmaceutical industry – would like to scale back the program. They argue that it has been abused, despite its record of increasing access to prescription drugs and its record of reducing government spending.

Scaling back the 340B program would hurt vulnerable patients and increase costs to the government as well as add to the already high profits of pharmaceutical companies.

340B In Action: Oregon

The 340B prescription drug discount program is a vital lifeline for safety-net providers, supporting critical health services in our communities and helping hospitals meet the health care needs of vulnerable patients.

Of the 62 hospitals in Oregon, 43 participate in the 340B program, providing an estimated savings of the 340B drug program total over $300 million*.

With the savings from this program, most, if not all, hospitals have been able to expand their pharmacy programs to provide medications to those who could not otherwise afford them. Some hospitals have been able to expand outreach and community health worker services in their communities, and a few hospitals have developed no cost medication delivery services directly to the patient’s home.

*Oregon 340 B savings estimated from hospital reporting to OAHHS

Combating Oregon's Opioid Epidemic

Oregon is sixth in the nation for non-medical use of prescription opioids with 330 hospitalizations for overdose and 4,300 for opioid use disorder in 2014, according to the Oregon Health Authority. More drug poisoning deaths involve prescription opioids than any other type of drug, including alcohol, methamphetamines, heroin and cocaine. An average of three Oregonians die every week from prescription opioid overdose, and many more develop opioid use disorder.
 
The probability of opioid abuse increases as the number of pills per prescription increases. The CDC states that the likelihood of long-term opioid prescription drug use increases sharply after the third and fifth days of taking a prescription, and spikes again after the 31st day.
 
In response, Oregon has declared opioid substance abuse a public health crisis and we are taking steps to combat this epidemic.
 
Congress also has stepped forward. The House and Senate are both working on legislation to address aspects of this crisis. 

Our Stance

  • We must preserve the coverage expansion achieved through the Affordable Care Act, especially through the Medicaid expansion. Substance use disorder treatment is one of the essential health benefits under the ACA and must be preserved.
  • One priority is to reduce the unnecessary use and access to opioids while supporting alternative and evidence-based treatments to combat opioid and opiate misuse.
  • The substance use disorder privacy policies in 42 CFR Part 2 must be aligned with the Health Insurance Portability and Accountability Act (HIPAA) to ensure adequate care coordination.
  • Non-opioid options for treating pain management are needed. Oregon hospitals are leading the way in this, but more should be done. Medical education must focus on new ways to treat pain – other than just with opioids.
  • In implementing the Chronic Care provisions of the Bipartisan Budget Act of 2018, CMS should incorporate non-pharmaceutical therapies for payment for chronic pain, with a priority on those that have been shown to be effective.

Graduate Medical Education 

Our state and nation face a challenge in ensuring that the supply of physicians keeps pace with increased demand for services by our aging and changing population. Hospitals and health systems play a critical role in this effort.
 
Graduate medical education (GME) is the continuation of formal training for physicians after they have completed their medical school education. GME includes residency and fellowship programs for subspecialty training after residency. These can last from three to seven or more years.
 
Historically, the Medicare program has been the primary financing source for graduate medical education, offsetting teaching hospitals costs with direct medical education (DME) and indirect medical education (IME) funding.

Hospitals and health systems also have contributed funds for these programs.

Residency Slots

The overwhelming majority of residents practice near the location of their residency. Thus, residency training is probably our most effective physician recruitment tool.
 
Nationally, because of the concern about physician shortages, the number of medical schools is increasing. As a result, there will be an additional 7,000 graduates every year for the next decade, according to the Association of American Medical Colleges.

However, there is not a corresponding increase in residency slots because Medicare’s support for physician training has been frozen since 1997. Without an increase in the number of residency training positions, the U.S. will face a declining number of physicians per capita.

Future Challenges

The President and some on Capitol Hill have threatened GME funding cuts as part of deficit reduction initiatives. Others argue the program should be substantially changed.
 
Current rules also make it hard for critical access hospitals to operate residency training programs. Legislation to address this concern has been introduced.
 
Oregon has 10 hospitals participating in residency programs that provide vital training opportunities for students. Supporting these programs and creating more training opportunities are top priorities for Oregon’s hospitals.

Preserving Coverage and Reform

In Oregon, more than 95 percent of adults and 98 percent of children have health care coverage. More than 400,000 Oregonians have obtained coverage under the Medicaid expansion authorized by the Affordable Care Act. Overall, since the ACA was enacted, the uninsured rate has dropped from 17 to 5 percent.
 
Oregon also leads the nation in transforming its delivery system. Cost growth within Medicaid is capped at 3.4 percent a year, far lower than national trends.

Avoidable emergency room visits have dropped 50 percent since 2011. Hospitals’ uncompensated care costs have dropped from $1.3 billion in 2013 to $547 million in 2016. By enrolling members in Oregon’s new coordinated care system, state and federal taxpayers have avoided $1.3 billion in Medicaid costs since 2012.

Our Stance

The OAHHS Board of Trustees has adopted principles that capture our priorities as we move forward with the ACA’s coverage expansion and reform of the delivery system:
  • The overall goal of any reforms should be improving the health of our communities;
  • Access to care must be maintained for all, including the more than 400,000 Oregonians who gained coverage through the ACA;
  • Any "repeal" and "replace" legislation should occur simultaneously or as close together as possible to provide clarity and continuity for patients, the health insurance market, and the health care community that serves them;
  • Any Medicaid reform proposals should recognize Oregon's current transformation goals and create stability in how Oregon and CMS fund the Medicaid program;
  • The system must be aligned for all payers, including Medicare and Medicaid, to adequately reimburse providers and eliminate cost shifting; and
  • Congress must restore Medicare and Medicaid cuts to hospitals if coverage expansion is repealed and there is no suitable replacement under consideration.
Oregon and OAHHS members have invested significant resources in developing innovative ways to make care more cost-effective and to reward value rather than the volume of services provided. OAHHS is concerned that administration actions will weaken coverage levels, make insurance more expensive and thwart efforts to convert from a volume-based to a value-based delivery system.
 
The ACA isn’t perfect; initiatives that help stabilize the insurance market are especially important. OAHHS remains open to other reform proposals in line with board principles.
 
OAHHS urges Congress and the administration to address these fixes.