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Medicare Essential Medicines Payment Update from IPPS Final Rule

The Centers for Medicare & Medicaid Services (CMS) has released their 2025 IPPS Final Rule, with changes going into effect on October 1, 2024. There is a new opportunity related to Medicare essential medicines payment that small, independent hospitals with 100 beds or fewer need to be aware of. These changes exclude Critical Access Hospitals (CAHs).

Medicare Essential Medicines Payment Update

CMS will provide a separate payment to qualifying hospitals under the Inpatient Prospective Payment System (IPPS) for Medicare’s share of the additional resource costs of maintaining a buffer stock of essential medicines. Due to the negative impacts of medication backorders and availability issues, the payment adjustment is intended to assist these hospitals in covering the costs to voluntarily maintain a six-month buffer stock of 86 medications that have been deemed essential. Hospitals can either directly establish the buffer stock or can do so through outside arrangements.

Hospitals are still responsible for the cost of the medications, but costs associated with the storage and maintenance of those medications can be reported. This will take effect for cost reporting periods beginning on or after October 1, 2024.

Contact Blue & Co. about the IPPS Final Rule

If you have any questions or are interested in discussing this new pharmacy opportunity in more detail, please reach out to your local Blue & Co. advisor or a member of the pharmacy and 340B team below.

Kyle Smith, CPA, 340B ACE, Director
317-713-7957

Jason Prokopik, Pharm. D, 340B ACE, Senior Manager
317-713-7916

Alyssa Kramer, Pharm. D, 340B ACE, Manager
317-275-7404

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