The Centers for Medicare and Medicaid Services (CMS) issued a final rule earlier this week outlining the remedy for the invalidated OPPS 340B-acquired drug payment policy which was in place between 2018-2022.  CMS will proceed with issuing the proposed lump sum payments to impacted hospitals, which is expected to total more than $9 billion.

The total lump sum owed to each hospital was based off evaluating claims with a claims process date prior to October 12, 2022, or Date of Service on or before September 27, 2022 that were paid at the average sales price (ASP) -22.5% and identifying what payment would have been if it were made at ASP +6%, the standard payment rate for non-340B entities.

The payment also includes what would have been the patient’s 20% copayment and CMS has instructed hospitals not to seek additional payment from its patients, as it was was otherwise covered in the lump sum payment.

CMS issued a file related to the final payment amount, which contains the amount owed by calendar year for each impacted provider. The file, Addendum AAA, can be found on the CMS OPPS Webpage here. Providers are strongly encouraged to review this file and ensure the amount is correct. If there are perceived errors, the hospital must alert CMS by November 30th with specific documentation demonstrating the error.

Payment will then be made by the local MAC within 60 days of when CMS sends instructions. Instructions will be sent on or around the first week of December, unless a correction is requested.

Additionally, CMS released guidance as to how the lump sum payments will impact its budget neutrality mandate. CMS estimated that as a result of the decreased drug payment it overpaid for clinical services in the amount of $7.8 billion. As a result, they will be offsetting the increased reimbursement over the course of an estimated 16 years, beginning in CY2026, by reducing the payments for non-drug items and services to all OPPS providers by 0.5%.

Lastly, CMS reiterated its inability to interfere with payment rates established with Medicare Advantage Organizations and indicated only payment made under non-contracted MAOs would be subject to the provisions of the final rule.

If you’d like to hear more about how these rules impact your covered entity, please contact Advis through our website or give us a call at 708-478-7030.

Published: November 6, 2023