fbpx

< Back to Thought Leadership

340B Hospitals Impacted by Supreme Court Decision

In June, the Supreme Court gave hospitals participating in the 340B Drug Pricing Program a convincing victory ruling unanimously that the U.S. Center for Medicare & Medicaid Services (CMS) should not have reduced reimbursement for covered outpatient prescription drugs purchased by those hospitals.

340B Hospitals Challenge Payment Rates

Hospitals challenged the 2018 and 2019 payment rates for 340B hospitals because CMS lowered the rate for covered drugs from average sales price (ASP) plus 6% to ASP minus 22.5%.

The June Supreme Court ruling remands the case to a lower court for further proceedings. This could benefit 340B hospitals impacted by reimbursement cuts imposed in 2018, 2019, and beyond since the lower reimbursement rate has remained in effect through 2022.

The ruling is positive news for 340B hospitals that continue to face financial pressures related to the 340B Program and contract pharmacies. Now, CMS and potentially the lower court must sort through difficult matters involving payment of damages for 2018 and 2019 underpaid claims.

Changes to the Proposed Rates for CY 2023

A more recent CMS announcement creates even more optimism for 340B hospitals affected by the 2018 and 2019 reimbursement reductions. Even though CMS has proposed for the rates for CY 2023 to remain at ASP minus 22.5%, the agency intends to implement the previous rate of ASP + 6% which will be applied to separately payable drugs and biologics under the OPPS payment system for CY 2023. This change is a result of the recent Supreme Court decision with more detailed information expected to follow.

Contact Our 340B ACE Consultants

We will be monitoring the situation as it continues in the lower courts and how it will impact payment rates for 340B hospitals. If you have questions or concerns about the recent Supreme Court ruling, changes to reimbursement rates for 340B purchased outpatient drugs, or other general 340B topics, please reach out to one of the 340B ACE consultants or your local Blue Advisor.

Kyle Smith, CPA, 340B ACE, Director
Jason Prokopik, PharmD, 340B ACE, Pharmacy Fiscal and Operational Manager
Chad Downing, RPh, EMBA, 340B ACE, Senior Consultant

indiana sales tax

New Indiana Sales Tax Rule for Not-For-Profits – Sales Tax Collection & Filing Threshold Increased

By Cory Schunemann, CPA, Manager at Blue & Co. Indiana’s 2023 Senate Enrolled Act (SEA) 417 made another change to the sales tax collection requirements for not-for-profits after 2022’s SEA 382. Not-for-profits with taxable retail sales in excess of $100,000 in the current or prior year are now required to collect and remit sales tax. […]

Learn More
Clipboard with paper that reads Employee Retention Credit | IRS Orders Immediate Stop to New Employee Retention Credit Processing – What You Need to Know | What You Need to Know About ERC

IRS Orders Immediate Stop to New Employee Retention Credit Processing – What You Need to Know

By Amy Sandlin, CPA, Tax Senior Manager at Blue & Co. On Thursday, Sept. 14, the IRS announced a moratorium on processing of new Employee Retention Credit (“ERC”) claims through at least December 31, 2023. This decision is in response to a flood of questionable claims and trusted tax advisors expressing a slew of concerns […]

Learn More

Changes to Medicare Bad Debt and S-10 Template Effective this Month

The new Medicare Bad Debt template (Exhibit 2A) and S-10 template (Exhibit 3B and 3C) have been finalized by Medicare and are now required for cost reporting periods ending on or after September 30, 2023. This deadline is quickly approaching, and Blue & Co. wants to be sure you are prepared. If you are feeling […]

Learn More