This summer, the Centers for Medicare and Medicaid Services (CMS) proposed two new rules that, if finalized, will have significant financial and operational impacts on 340B covered entities.
In early July, the Centers for Medicare and Medicaid Services (CMS) issued the proposed CY 2027 Hospital Outpatient Prospective Payment System (OPPS) rule.
This year’s rule proposes a steep reduction to separately payable 340B drugs reimbursed through Medicare Part B, creating a new reimbursement rate of Average Sales Price (ASP) minus 33.4%.
When compared to the current rate for separately payable 340B drugs of ASP plus 6%, this reflects a nearly 40% reduction in reimbursement on separately payable 340B drugs. CMS estimates this change will reduce drug payments to 340B covered entities by $4.55 billion nationwide.
As currently proposed, children’s hospitals (PED), PPS-exempt cancer hospitals (CAN) and rural sole community hospitals (SCH) are exempted from the payment reduction. Critical access hospitals (CAH) are exempt from the OPPS and are not impacted by this rule.
To operationalize this payment reduction, covered entities will now be required to include billing modifiers to identify how separately payable drugs are acquired. The proposed modifiers are:
- Modifier JG for 340B-acquired drugs furnished by hospitals subject to the payment reduction.
- Modifier TB for 340B-acquired drugs furnished by hospitals exempt from the reduction.
- A proposed new modifier, currently labeled XX, for drugs acquired outside the 340B Program.
CMS is considering requiring all separately payable OPPS drug claims to include one of these modifiers. This could potentially create additional claim-editing, charge-master, pharmacy, and compliance requirements.
CMS is requesting comments as a part of the standard rule-making process. The deadline for comments on the FY 2027 Hospital OPPS rule is August 31, 2026.
Additionally, on July 16th, CMS proposed the CY 2027 Physician Fee Schedule (PFS) rule. The proposed rule contains a new requirement for 340B covered entities to submit data on 340B claims covered by Medicare Part D to a CMS claims data repository. While previously a voluntary process, finalization of this rule would mandate data submission to CMS for Part D 340B claims.
Data fields proposed for submission include:
- Date of service;
- Date of prescription or service reference number;
- Fill number;
- Dispensing National Provider Identifier (NPI); and
- 11-digit National Drug Code (NDC-11).
CMS indicates that it will use this data to identify and exclude 340B units when calculating manufacturer Part D inflation rebates introduced under the Inflation Reduction Act and that this data will not be made available to external parties such as manufacturers or Part D plan sponsors. Without an exclusion, CMS claims, manufacturers could owe inflation rebates on units already subject to 340B pricing.
CMS is requesting comments as a part of the standard rule-making process. The deadline for comments on the CY 2027 PFS proposed rule is September 14, 2026.
These two proposed rules will cause significant material and operational impacts to 340B covered entities and 340B drugs given to Medicare beneficiaries. Blue & Co encourages covered entities to evaluate how these proposals will affect their program operations and overall 340B savings.
Contact Us
If you have any questions about how the proposed CY 2027 Hospital Outpatient Prospective Payment System (OPPS) rule or the CY 2027 Physician Fee Schedule (PFS) rule will impact your 340B program, please do not hesitate to reach out to one of our 340B ACE-certified advisors.
Kyle Smith, CPA, 340B ACE, Director
Jason Prokopik, PharmD, 340B ACE, Senior Manager
Alyssa Kramer, PharmD, 340B ACE, Manager
