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CMS Proposes 340B Repayment Policy for 2018-2022

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As a result of the Supreme Court ruling in American Hospital Association v. Becerra, the Centers for Medicare & Medicaid Services (CMS) issued its proposed remedy for its 340B-acquired drug payment policy that was in effect from 2018-2022. The rule proposes to make a hospital-specific lump sum settlement of an estimated $9 billion to approximately 1,600 340B-eligible hospitals paid under the outpatient prospective payment system (OPPS).  

Each lump sum settlement will be calculated based on the difference between what a 340B hospital was paid under CMS’ policy of paying for separately payable drugs billed with the “JG” modifier on claims with dates of service during the time frame in question at average sales price (ASP) – 22.5% and what they should have been paid at ASP +6%. If finalized, CMS anticipates repayments will begin in late 2023 or early 2024.  

The proposed lump sum repayment amounts will include any additional beneficiary cost sharing, which hospitals will not be allowed to bill beneficiaries for.  

Finally, the rule asserts that CMS must reduce payments for non-drug outpatient items and services by an estimated $7.8 billion to achieve budget neutrality. To achieve this, CMS proposes to reduce the OPPS market basket update by .5% starting in calendar year 2025. It is estimated that the market basket reduction will remain in effect for 16 years to recoup the full amount.

A file with the estimated repayment amount by eligible hospital is available here. CMS will issue a final file with the final rule in November, and CHA encourages 340B-eligible hospitals to review the estimated repayment amount to ensure its accuracy.  

A CMS fact sheet is available here. Comments on the proposed rule are due on Sept. 5, and CHA will provide a detailed summary after reviewing the rule.