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CMS Proposes More Than 22% Drop in 340B Drug Reimbursement in 2018 OPPS Rule

By Revenue Cycle Advisor  
   July 14, 2017

CMS intends a significant drop in reimbursement for 340B drug payment program participants, along with potentially burdensome reporting requirements for non-participants.

This article was originally published on Revenue Cycle Advisor, July 14, 2017.

The 2018 OPPS proposed rule is one of the shortest, and latest, in recent memory, being released July 13 at only 663 pages, but it contains major proposed policy changes for the 340B drug discount program, new modifiers, and expands packaging to drug administration for the first time.  

“This is the first Fourth of July I recall being able to enjoy since the rule had not come out, which made me wonder what it would contain, given it had been sitting at the Office of Management and Budget for months,” says Jugna Shah, MPH, president and founder of Nimitt Consulting.

“What’s clear is this rule packs a punch, so no one should be misled by how short it is,” she adds. “There are several significant proposals providers will need to pay attention to and comment on to CMS.”

Payment changes for 340B

One proposal that would have an enormous impact on a large number of hospitals is CMS’ proposal to reduce the payment to hospitals who acquire their drugs through the 340B drug discount program. The program allows eligible hospitals, such as disproportionate share, rural, and cancer centers, to purchase drugs at a reduced price to allow those resources to be used elsewhere. CMS currently reimburses all hospitals for separately payable drugs at the standard average sales price (ASP) plus 6%.

For 2018, the agency proposes a dramatic decrease in what it would pay hospitals participating in the 340B program for separately payable drugs, excluding those with pass-through status and vaccines, at ASP minus 22.5%, basing that deduction on an estimate from the Medicare Payment Advisory Commission.

The agency admits it does not know how much hospitals actually pay for these drugs, but predicts it could decrease such payments by up to $900 million. Since the proposal is to be budget neutral, this money would be redistributed throughout the OPPS for other items and services. In the rule, CMS notes that it may need to adjust the conversion factor in future years as it did previously due to a billion-dollar miscalculation in its clinical laboratory packaging policies.

Revenue Cycle Advisor combines all of HCPro's Medicare regulatory and reimbursement resources into one handy and easy-to-access portal. News is not just repeated from other sources. It is analyzed by our Medicare experts so professionals can comprehend any new rule and regulatory updates thoroughly. Learn more.

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