On November 2, 2023, the Centers for Medicare & Medicaid Services (CMS) released a final rule outlining a plan to correct and reverse the 340B payment cuts from calendar years (CY) 2018 through 2022. The final rule is in response to the Supreme Court ruling issued last year stating that CMS lacked authority to reimburse for drugs at average sale price (ASP) minus 22.5 percent.
In the final rule, CMS will be instructing the Medicare Administrative Contractors (MAC) to make lump sum payments to all providers that were negatively impacted by the reductions in reimbursement within a 60-day period of receiving the instructions. CMS is estimating the total payments remaining are approximately $9 billion owed to affected 340B providers. Providers will also receive beneficiary copayment amounts from CMS since they would be unable to bill beneficiaries for the cost sharing portion.
To maintain budget neutrality as a result of this remedy, beginning in CY 2026, all non-drug items and service payments would be reduced by adjusting the OPPS conversion factor by minus 0.5%. This is delayed a year from the preliminary rule released in July. CMS is still estimating this adjustment would remain in place for approximately 16 years.
Contact Our Team
If you have any questions or need assistance with evaluating how this remedy will impact your organization, please feel free to contact any of our pharmacy team members or your local Blue & Co. advisor.
Kyle Smith, CPA, 340B ACE, Director
Jason Prokopik, PharmD, 340B ACE, Senior Manager
Alyssa Kramer, PharmD, 340B ACE, Manager