HHS Finalizes Remedy for Unlawful Cuts to 340B Hospitals.

November 9, 2023

The U.S. Department of Health and Human Services November 2 finalized its rule outlining the agency’s remedy for the unlawful payment cuts to certain hospitals that participate in the 340B Drug Pricing Program. The remedy was required following last year’s unanimous Supreme Court decision that determined the cuts were improperly done.

Under the final rule, CMS through its Medicare Administrative Contractors will pay for the cuts made from 2018-2022 as a lump sum payment, including the Medicare beneficiary cost share amount. It is expected the lump sum payments will be made during the first quarter of calendar year 2024. Since the cuts to prospective payment 340B hospitals were accompanied by an overall budget neutrality adjustment to the outpatient prospective payment system (OPPS) conversion factor for all OPPS hospitals, the final rule includes a prospective decrease to the OPPS rates of .5 percent beginning 2026 and lasting about 16 years. In its comments on the proposed rule, WSHA supported the lump sum payment but strongly opposed the prospective payment decrease. (Andrew Busz, andrewb@wsha.org)


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