On Friday July 7th, 2023, CMS released a proposed rule outlining a plan to correct and reverse the 340B payment cuts from calendar years (CY) 2018 through 2022. This proposed rule is in response to last years Supreme Court ruling that CMS lacked authority to reduce reimbursement for drugs to average sale price (ASP) minus 22.5 percent.
Outpatient Prospective Payment System (OPPS) Solution Proposed Rule
In the proposed rule, CMS would make lump sum payments to all providers that were negatively impacted by the reductions in reimbursement. CMS is estimating the total payments remaining would be approximately $9 billion owed to affected 340B providers. Providers would also receive beneficiary copayments 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 2025, all non-drug item and service payments would be reduced by adjusting the OPPS conversion factor by minus 0.5%. CMS is estimating this adjustment would remain in place for approximately 16 years.
Since this is only proposed currently, there is a 60-day comment period which ends on September 5, 2023.
Blue will continue to monitor all of the information that becomes available and provide updates as necessary. We welcome the opportunity to address any questions or assist with evaluating how these changes may impact your organization. Please reach out to your local Blue & Co. advisor or a member of our 340B team below if you have questions about the proposed hospital 340B outpatient prospective payment system (OPPS) solution.
Kyle Smith, CPA, 340B ACE, Director
Jason Prokopik, PharmD, 340B ACE, Senior Manager