Regulators finalized a rule Wednesday that would slash payments for drugs in the controversial 340B program and equalize some payments between care sites. Hospitals railed against the rule.

Medicare will slash payment rates for a federal drug discount program and broaden site-neutral policies next year, according to a final rule released by the CMS on Wednesday.

340B payments are set to drop by billions of dollars and Medicare will pay the same amount for more medical procedures, regardless if they’re furnished in hospital-owned outpatient departments.

Under the final rule, hospital outpatient departments and ASCs will also see their Medicare payments increase 2.3% next year, slightly less than the 2.4% bump regulators proposed in July.

Officials said the 2027 Outpatient Prospective Payment System and Ambulatory Surgery Center policy would drive affordability for Medicare beneficiaries by lowering out-of-pocket costs for drugs and imaging services.

“By right-sizing payments and rooting out waste, today’s reforms will drive affordability in Medicare for current beneficiaries while ensuring it will still be there to serve their children and grandchildren,” CMS Administrator Dr. Mehmet Oz said in a statement.

Still, hospitals railed against the regulation, with the American Hospital Association arguing the payment bump isn’t adequate to address the financial challenges facing hospitals.

In addition, the “continued assault on the 340B program” is deeply disturbing and will put further stress on hospitals, said Ashley Thompson, senior vice president of public policy analysis and development at the AHA in a Wednesday statement.

Under the final rule, Medicare will reimburse 340B participants at the drug’s average sales price, minus 28%.

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