< Back to Thought Leadership

New Requirements by Humana for 340B Participants

Attention 340B covered entities participating with Humana – Managed Care Medicare: Effective January 1, 2019, Humana requires that a “JG,” “TB,” or another relevant modifier be added to claims involving 340B eligible outpatient drugs under the Medicare Outpatient Prospective Payment System (OPPS) with status indicator “K.” If a claim does not include the proper modifier alerting Humana to the use of 340B drugs, Humana will automatically reduce the reimbursement rate to the average sales price (ASP) minus 22.5%.

This change by Humana resembles the January 1, 2018 decision by the Centers for Medicare and Medicaid Services (CMS) to reduce the Medicare allowed reimbursement rate for 340B purchased drugs from ASP plus 6 percent to ASP minus 22.5 percent. CMS simultaneously increased the conversion factor for all OPPS non-drug items and services by approximately 3.2%.

It may be prudent to reach out to Humana for clarity on this issue. A recent federal court ruling in Washington reversed the enormous cuts to the Medicare outpatient drug payments implemented by CMS. A federal judge ruled in late December 2018 that CMS and HHS exceeded their authority by cutting drug reimbursement by approximately 28.5 percent. While this ruling appears to be a win for the hospitals affected by the payments cuts, it is not certain how this issue will be settled. Additionally, there has been no guidance by Humana as to how this ruling affects its position.

We will continue to monitor the situation and update clients as more information becomes available. If you have any questions, please contact one of our 340B Apexus Certified Experts:

Jason Prokopik, Pharmacy Manager
jprokopik@blueandco.com
317-713-7916

 

Click here to learn more about our 340B services.

Share this article

6 Considerations for Navigating Restricted Fund Changes in Not-for-Profit Organizations

By Caroline Paulus, CPA, Manager and Beth Anne Akers, CPA, Manager at Blue & Co. When circumstances shift and a not-for-profit needs to repurpose restricted funding, balancing donor intent with […]

Learn More
A wooden gavel resting on a courtroom desk with a judge in the background, representing the federal court ruling that vacated CMS's Medicare DSH rule

CMS 2023 Medicare DSH Ruling Vacated

On August 28, 2026, the U.S. District Court for the District of Columbia vacated CMS’s 2023 rule addressing the treatment of Medicare Advantage (Part C) inpatient days in the Medicare […]

Learn More
tax strategies for plastic processors

Navigating Industry Headwinds: Key Financial and Tax Considerations for Plastic Processors

By Stephen Stringer, CPA, Director at Blue & Co. If there is one thing most plastic processors can agree on, it’s that operating a plastic manufacturing business has become increasingly […]

Learn More
Share this article
Share this article