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CMS Proposes Payment Rate Increase, Officially Ends 340B Cuts in OPPS Rule

Analysis  |  By Amanda Norris  
   July 18, 2022

CMS proposes increasing outpatient hospital payment rates by 2.7% and considers paying average sales price plus 6% for drugs acquired through the 340B program.

CMS recently released the outpatient prospective payment system (OPPS) proposed rule that would increase Medicare hospital outpatient payment rates by a net 2.7% in calendar year 2023 compared to 2022.

For hospitals that participate in the 340B Drug Pricing Program and that were affected by CMS' OPPS cuts in recent years, the agency announced it would restore the payment to average sales price plus 6% for calendar year 2023, given the recent Supreme Court decision.

CMS also noted that it is evaluating how to apply the Supreme Court's decision to the prior year cuts and is seeking public comment on potential remedies affecting cost years 2018-2022.

Concerns have already started pouring in from hospital groups unhappy with the inadequate payment rate amount, much like what we saw with the recent inpatient payment system proposal.

American Hospital Association (AHA) Executive Vice President Stacey Hughes said, "We are deeply concerned about CMS' proposed payment update of only 2.7%, given the extraordinary inflationary environment and continued labor and supply cost pressures hospitals and health systems face," according to the association’s statement.

In contrast, the AHA is happy with the end of the 340B payment cuts and it demands repayment.

"Having now recognized what 340B hospitals are owed under the law, we urge the Administration to promptly reimburse those hospitals that were affected by these unlawful cuts in previous years. Additionally, we continue to urge the agency to ensure the remainder of the hospital field is not penalized for their prior unlawful policy, especially as hospitals and health systems continue to deal with rising cost for supplies, equipment, drugs, and labor," Hughes said.

Among other proposals, CMS would require prior authorization for an additional service category, remove 10 services from the inpatient only list, and add one procedure to the ambulatory surgical center covered procedures list.

CMS will accept comments on the proposed rule through September 13.

Amanda Norris is the Director of Content for HealthLeaders.

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