Yesterday, the Centers for Medicare & Medicaid Services (“CMS”) released its 2023 Medicare Outpatient Prospective Payment System (“OPPS”) Final Rule.  The rule specifically addressed payment rates for Part B drugs and biologicals to 340B hospitals, which was reduced from ASP +6% payment to ASP-22.5% payment rate in the 2018 final rule.

Following the recent Supreme Court decision that invalided the reimbursement cuts, CMS has announced it will return payment rates to the default rate of ASP plus 6% moving forward and for all of CY2023, regardless of whether the drug was purchased through the 340B program.

The rule also details billing requirements amidst the new payment rates. Despite the fact that Part B drugs will be paid at the same rate as drugs and biologicals purchased outside of the 340B program, CMS is requiring that the modifiers JG and TB are still used in order to track the utilization of 340B acquired drugs reimbursed under the OPPS.  However, these modifiers, particularly, the JG modifier, will no longer have any impact on payment.

CMS also announced it is still evaluating how to reimburse covered entities for the amount owed for drug claims paid between CY 2018 to CY 2022 at the reduced rate.  CMS noted the outstanding motion filed before the District Court which specifically addressed the question of how to remedy the reduced payment amounts to 340B hospitals under the reimbursement rates in the final OPPS rules for CYs 2018–2022. Accordingly, the methodology for this reimbursement is yet undecided and CMS expects to issue a separate proposed rule detailing its proposed remedy in advance of the CY 2024 OPPS/ASC proposed rule, which is typically issued in July.

Furthermore, it should be noted that all cuts to the 340B drug reimbursement rate were done in a budget neutral manner, meaning the savings were passed along to other service lines. Therefore, in order to ensure continued budget neutrality under the OPPS, CMS has announced it will apply an offset of $1.96 billion to decrease the OPPS conversion factor, reflecting a budget neutrality adjustment of -3.09% to the conversion factor.

If you have any questions related to the 340B payments or its impact to your hospital, please contact Advis at (708) 478-7030.

Published: November 3, 2022