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  • Washington Highlights

    CMS Releases Proposed Rule for 340B Remedy


    Mary Mullaney, Director, Hospital Payment Policies
    For Media Inquiries

    The Centers for Medicare & Medicaid Services (CMS) on July 7 released a proposed rule to address the reimbursement reductions for drugs acquired under the 340B Drug Pricing Program and paid under the Outpatient Prospective Payment System (OPPS). This proposed rule is in response to the U.S. Supreme Court’s ruling that the CMS did not have the authority to implement the cuts [refer to Washington Highlights, June 17, 2022].   

    The CMS proposed to make lump sum payments to hospitals impacted by the reimbursement cuts, with agency estimates putting the total payments to hospitals at $9 billion. Beneficiaries’ cost-sharing for these drugs is included in this amount. The proposed rule states that the CMS does not have the authority to pay interest on the remedy payments. 

    Finally, the CMS proposed to implement the remedy in a budget-neutral manner. To that end, the agency proposed a prospective adjustment to OPPS payments for nondrug items and services to offset the increased payments for these items and services made during calendar years 2018 through 2022. Beginning in 2025, the CMS would implement a -0.5% adjustment to the OPPS conversion factor. The agency anticipates that it will take 16 years to fully offset the overpayments.