< 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

Hospital financial outlook 2026: medical supplies and diagnostic equipment illustrating rising healthcare expenses and pressure on hospital margins

Hospital Financial Outlook 2026: Revenue Growth, Margin Pressure, and Shifting Payer Mix

The headline number from mid-2026 is technically encouraging: hospital revenue is growing. But revenue figures have a way of obscuring what’s actually happening on the margin line and right now […]

Learn More

Unrelated Business Income and Alternative Investment Risks for Healthcare Organizations

Unrelated business income (UBI) remains one of the most fact-intensive areas of federal tax compliance for all exempt-organizations, particularly healthcare organizations. As health systems diversify revenue, expand ancillary services, and […]

Learn More

Public Dealership Group Performance: Mid-Year 2026 PVR Trends and Outlook

By Jonah Gjertson, Senior Consultant at Blue & Co. Starting Point The first half of 2026 has remained relatively stable among the public dealership groups, with new profit per vehicle […]

Learn More
Share this article
Share this article