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CMS Reveals 340B Hospital Payment Rate

Analysis  |  By Jay Asser  
   October 21, 2022

The agency will pay 340B hospitals the average sales price plus 6% for all calendar year 2022 drug claims billed with modifier -JG.

Following the recent ruling on the 340B hospital reimbursement timeline, CMS has disclosed its payment rate to cover 340B drug costs.

CMS will pay 340B hospitals the average sales price plus 6%, instead of the average sales price minus 22.5%, for all calendar year 2022 drug claims billed with modifier -JG (drug or biological acquired with 340b drug pricing program discount), the American Hospital Association (AHA) said.

The payment rate arrives weeks after a judge rejected HHS' plan to wait until January 1, 2023, to restore drug payments to 340B hospitals, instead ordering them to immediately end the cut.

AHA said of the ruling: "We continue to urge the administration to promptly reimburse all the hospitals that were affected by these unlawful cuts in previous years and 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 costs for supplies, equipment, drugs, and labor."

After the decision, HHS stated on September 30 it would need two weeks to adjust payment rates because it "requires revisions to four different electronic data files and then testing by multiple offices to confirm that the revised files function appropriately before the files are loaded to the production environment where they will be used to calculate OPPS reimbursements on a prospective basis."

With the payment rate now set, CMS said it will reprocess claims Medicare administrator contractors paid on or after September 28 using the default rate.

Jay Asser is the contributing editor for strategy at HealthLeaders. 

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