Trump's Medicare agency cuts safety-net hospitals' drug pay; some seniors' copays fall

On Nov. 4, the Trump administration's Medicare agency issued a final rule that cuts what many hospitals serving low-income communities are paid for certain outpatient drugs. The cut starts Jan. 1, 2027 ². It is the agency's second attempt at a cut like this. The Supreme Court overturned a similar policy in 2022 ⁵.

The rule touches seniors in two ways. Some patients will pay less out of pocket for drugs given at hospital clinics. But the hospitals that give those drugs, including many that serve the poorest communities, will get less money ¹⁴.

What the rule does

The cut targets the 340B Drug Pricing Program. Under that program, drug makers must sell outpatient drugs at a discount to eligible providers, including hospitals and clinics that serve many low-income patients ¹⁵. Medicare usually pays hospitals the drug's average sales price plus 6% ¹²⁵⁷. Under the new rule, Medicare will pay 340B hospitals the average sales price minus 28% ².

That is a smaller cut than the 33.4% reduction the agency proposed in July ¹¹¹. Rural sole community hospitals, cancer hospitals that are exempt from the standard payment system, and children's hospitals do not have to take the cut ². The Centers for Medicare & Medicaid Services (CMS), which runs Medicare, estimates that Medicare's drug payments will fall by about $4.35 billion in the first year ¹.

By right-sizing payments and rooting out waste, today's reforms will drive affordability in Medicare

Where your savings come from

Under traditional Medicare's Part B, which covers doctor visits and outpatient care, patients usually pay 20% of the cost after meeting the deductible. In 2026 the deductible is $283 and the standard monthly premium is $202.90 ¹⁰. When Medicare pays less for a drug, the patient's 20% share shrinks too.

CMS estimates that people who get a qualifying drug at a hospital outpatient department will save an average of $900 in 2027. It puts total savings for patients at about $1.1 billion in the first year ¹. But people with Medigap or other supplemental coverage may not see the difference, because those plans usually pay the coinsurance already ¹.

The Community Oncology Alliance, which represents independent cancer practices, praised the change. Its executive director, Ted Okon, said it "will lower patients' out-of-pocket costs for these drugs" ⁷.

The catch: who pays

By law, the drug cut cannot change Medicare's total spending. So CMS is raising payments for other outpatient services by about 7.5% to make up the difference ². Hospitals that are not in the 340B program, including for-profit chains, can get that increase without losing anything on drugs ³.

When the health research group KFF studied the July proposal, it found that safety-net hospitals would lose 5.8% of their outpatient Medicare revenue. For-profit hospitals would gain 7.4% ⁵. KFF also found that patients' share of costs would rise for outpatient services that are not drugs ⁵. The final cut is smaller, but the money moves in the same direction.

The rule also speeds up a separate clawback tied to the remedy for the cut the courts struck down. That yearly reduction in outpatient payments rises from 0.5% to 2%, and CMS expects to finish collecting an estimated $7.8 billion by 2031 ².

Congress should ensure that CMS follows the law and preserves the 340B program, which is working as intended.

The American Hospital Association (AHA) said it was "deeply concerned" about the pressure on the 340B program from lower payments and faster clawbacks ².

The Republicans' own warning

Republicans had raised alarms too. On Aug. 31, Rep. Mike Lawler of New York and five other New York Republicans asked Medicare chief Dr. Mehmet Oz to reconsider the cut. They warned that New York's 340B hospitals stood to lose about $900 million a year ⁶. CMS made the cut smaller but went ahead with it ².

Safety net hospitals that utilize 340B already operate under extremely difficult financial circumstances

Other changes for patients

The rule also changes payments for X-rays, MRI and CT scans done without contrast dye at some off-campus hospital clinics. Medicare will now pay rates closer to what doctors' offices get. CMS expects patients to save about $70 million in premiums and about another $70 million in out-of-pocket costs in 2027 ¹. CMS will also take 637 services off its list of procedures Medicare pays for only during a hospital stay. Starting July 1, 2027, Botox injection codes will need prior approval ².

That matters because Democrats take control of Congress in January. Before the election, a House Democratic working group's plan called for paying the same rate for routine outpatient care no matter where it is given, with protections for rural and safety-net hospitals. The plan also called for blocking a separate 340B rebate model. Democrats are also expected to use oversight hearings to question Oz ⁹. The pattern is that this rule saves some patients money while shifting costs onto the hospitals many poor and rural seniors rely on. Oversight of the rule will now fall to the new Congress.

The Record

1. Jul 2, 2026CMS proposes paying 340B hospitals the average sales price minus 33.4% for certain drugs, down from plus 6% ¹¹.
2. Jul 29, 2026KFF analysis finds the proposal would cut safety-net hospitals' outpatient Medicare revenue 5.8% and raise for-profit hospitals' revenue 7.4% ⁵.
3. Aug 31, 2026Rep. Mike Lawler and five other New York Republicans urge CMS to reconsider the cut, citing about $900 million a year in losses to New York hospitals ⁶.
4. Nov 4, 2026CMS finalizes the rule at the average sales price minus 28%, effective Jan. 1, 2027, and speeds up a separate payment clawback ².

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<h2>Trump&#39;s Medicare agency cuts safety-net hospitals&#39; drug pay; some seniors&#39; copays fall</h2> <p><em>By The GOP Files Kitchen-Table Desk. This article first appeared on <a href="https://thegopfiles.com/story/trump-s-medicare-agency-cuts-safety-net-hospitals-drug-pay-some-seniors-copays-fall">The GOP Files</a> on Friday, November 6, 2026.</em></p> <p>On Nov. 4, the Trump administration&#39;s Medicare agency issued a final rule that cuts what many hospitals serving low-income communities are paid for certain outpatient drugs. The cut starts Jan. 1, 2027 . It is the agency&#39;s second attempt at a cut like this. The Supreme Court overturned a similar policy in 2022 .</p> <p>The rule touches seniors in two ways. Some patients will pay less out of pocket for drugs given at hospital clinics. But the hospitals that give those drugs, including many that serve the poorest communities, will get less money .</p> <h2>What the rule does</h2> <p>The cut targets the 340B Drug Pricing Program. Under that program, drug makers must sell outpatient drugs at a discount to eligible providers, including hospitals and clinics that serve many low-income patients . Medicare usually pays hospitals the drug&#39;s average sales price plus 6% . Under the new rule, Medicare will pay 340B hospitals the average sales price minus 28% .</p> <p>That is a smaller cut than the 33.4% reduction the agency proposed in July . Rural sole community hospitals, cancer hospitals that are exempt from the standard payment system, and children&#39;s hospitals do not have to take the cut . The Centers for Medicare &amp; Medicaid Services (CMS), which runs Medicare, estimates that Medicare&#39;s drug payments will fall by about $4.35 billion in the first year .</p> <blockquote><p>By right-sizing payments and rooting out waste, today&#39;s reforms will drive affordability in Medicare</p><p>&mdash; Mehmet Oz, Administrator, Centers for Medicare &amp; Medicaid Services</p></blockquote> <h2>Where your savings come from</h2> <p>Under traditional Medicare&#39;s Part B, which covers doctor visits and outpatient care, patients usually pay 20% of the cost after meeting the deductible. In 2026 the deductible is $283 and the standard monthly premium is $202.90 . When Medicare pays less for a drug, the patient&#39;s 20% share shrinks too.</p> <p>CMS estimates that people who get a qualifying drug at a hospital outpatient department will save an average of $900 in 2027. It puts total savings for patients at about $1.1 billion in the first year . But people with Medigap or other supplemental coverage may not see the difference, because those plans usually pay the coinsurance already .</p> <p>The Community Oncology Alliance, which represents independent cancer practices, praised the change. Its executive director, Ted Okon, said it &quot;will lower patients&#39; out-of-pocket costs for these drugs&quot; .</p> <h2>The catch: who pays</h2> <p>By law, the drug cut cannot change Medicare&#39;s total spending. So CMS is raising payments for other outpatient services by about 7.5% to make up the difference . Hospitals that are not in the 340B program, including for-profit chains, can get that increase without losing anything on drugs .</p> <p>When the health research group KFF studied the July proposal, it found that safety-net hospitals would lose 5.8% of their outpatient Medicare revenue. For-profit hospitals would gain 7.4% . KFF also found that patients&#39; share of costs would rise for outpatient services that are not drugs . The final cut is smaller, but the money moves in the same direction.</p> <p>The rule also speeds up a separate clawback tied to the remedy for the cut the courts struck down. That yearly reduction in outpatient payments rises from 0.5% to 2%, and CMS expects to finish collecting an estimated $7.8 billion by 2031 .</p> <blockquote><p>Congress should ensure that CMS follows the law and preserves the 340B program, which is working as intended.</p><p>&mdash; Beth Feldpush, Senior vice president of policy and advocacy, America&#39;s Essential Hospitals</p></blockquote> <p>The American Hospital Association (AHA) said it was &quot;deeply concerned&quot; about the pressure on the 340B program from lower payments and faster clawbacks .</p> <h2>The Republicans&#39; own warning</h2> <p>Republicans had raised alarms too. On Aug. 31, Rep. Mike Lawler of New York and five other New York Republicans asked Medicare chief Dr. Mehmet Oz to reconsider the cut. They warned that New York&#39;s 340B hospitals stood to lose about $900 million a year . CMS made the cut smaller but went ahead with it .</p> <blockquote><p>Safety net hospitals that utilize 340B already operate under extremely difficult financial circumstances</p><p>&mdash; Mike Lawler, U.S. representative, R-N.Y., in a letter he led to CMS</p></blockquote> <h2>Other changes for patients</h2> <p>The rule also changes payments for X-rays, MRI and CT scans done without contrast dye at some off-campus hospital clinics. Medicare will now pay rates closer to what doctors&#39; offices get. CMS expects patients to save about $70 million in premiums and about another $70 million in out-of-pocket costs in 2027 . CMS will also take 637 services off its list of procedures Medicare pays for only during a hospital stay. Starting July 1, 2027, Botox injection codes will need prior approval .</p> <p>That matters because Democrats take control of Congress in January. Before the election, a House Democratic working group&#39;s plan called for paying the same rate for routine outpatient care no matter where it is given, with protections for rural and safety-net hospitals. The plan also called for blocking a separate 340B rebate model. Democrats are also expected to use oversight hearings to question Oz . The pattern is that this rule saves some patients money while shifting costs onto the hospitals many poor and rural seniors rely on. Oversight of the rule will now fall to the new Congress.</p> <p><em>Read the original, with every source linked, at <a href="https://thegopfiles.com/story/trump-s-medicare-agency-cuts-safety-net-hospitals-drug-pay-some-seniors-copays-fall">thegopfiles.com</a>. Republished under The GOP Files' <a href="https://thegopfiles.com/republish">free republishing terms</a>.</em></p> <img src="https://thegopfiles.com/api/rp/trump-s-medicare-agency-cuts-safety-net-hospitals-drug-pay-some-seniors-copays-fall.gif" alt="" width="1" height="1" style="border:0;width:1px;height:1px">

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Sources

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2. American Hospital Association, “CMS finalizes increases to Medicare hospital outpatient department payment rates, changes to site-neutral and 340B for 2027” (2026-11-04). aha.org/news/headline/2026-11-04-cms-finalizes-increases-med
3. BioPharma Dive, “Medicare will cut billions from 340B, expand site-neutral payments in 2027” (2026-11-05). biopharmadive.com/news/medicare-will-cut-billions-from-340b-
4. America's Essential Hospitals, “Association Responds to OPPS Final Rule from CMS” (2026-11-04). essentialhospitals.org/association-responds-to-opps-final-ru
5. KFF, “Medicare's Proposed Cut to 340B Drug Payments Would Hit Safety-Net Hospitals While Benefiting For-Profit Hospitals” (2026-07-29). kff.org/health-costs/medicares-proposed-cut-to-340b-drug-pay
6. Office of Rep. Mike Lawler, “Lawler Demands CMS Reconsider 340B Payment Cuts to Safety Net Hospitals” (2026-08-31). lawler.house.gov/news/documentsingle.aspx?DocumentID=6407
7. AJMC, “COA Credits CMS on 340B, Site Neutrality but Says Physician Cuts, IRA Threat Remain” (2026-11-05). ajmc.com/view/coa-credits-cms-on-340b-site-neutrality-but-sa
8. Urban Milwaukee (Office of Sen. Tammy Baldwin release), “Baldwin, Moran Roll Out Comprehensive Bill to Reform and Strengthen 340B Drug Discount Program” (2026-08-05). urbanmilwaukee.com/pressrelease/baldwin-moran-roll-out-compr
9. HFMA, “Healthcare policy after the 2026 midterms: What hospitals can expect” (2026-11-05). hfma.org/payment-reimbursement-and-managed-care/healthcare-p
10. Newsweek, “Medicare Patients Could Save $900 Under New 2027 Rules” (2026-11-05). newsweek.com/medicare-patients-could-save-900-new-2027-rules
11. STAT, “Medicare takes another swing at 340B cuts to hospitals” (2026-07-02). statnews.com/2026/07/02/medicare-hospital-payment-340b-drugs

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