In the latest entry in what has been a tumultuous year for the 340B Drug Pricing Program, the Centers for Medicare & Medicaid Services (CMS) released the proposed rule that would reduce Medicare reimbursement for separately payable drugs under the 340B program. Under the proposal, reimbursement would fall from 6% above average sales price (ASP) to 22.5% below beginning in calendar year 2018.
This is not the first time the drug program has been in the news in 2017. The Health Resources and Services Administration (HRSA) decided in early 2017 to delay the most recent Final Rule to October 1st, 2017, and then withdrew its proposed 340B Drug Pricing Program Omnibus Guidance. As it stands, these developments have left the 340B program requirements unchanged for most covered organizations.
Yet today, the new reimbursement rate within proposed rule is arguably one of the program’s most reaching and impactful developments for healthcare providers. Coupled with recent reports of a potential executive order by the Trump administration that could further alter how the program is administered, the future of 340B is unclear, though reports from Modern Healthcare have quelled some concerns over the impact that these executive actions could have on the program.
Latest Developments: Proposal to Reduce Medicare Reimbursement
CMS’ reduction is stated to more closely align reimbursement with the actual costs participating organizations face, and is based on the Medicare Payment Advisory Committee’s estimated average minimum discount that 340B-covered organizations receive. The reduction would exclude vaccines (which aren’t covered under 340B) and pass-through drugs.
New Billing Modifiers Should Be on Providers’ Radars
In order to track drugs that providers purchased through the 340B program and subsequently billed to the OPPS, hospitals may soon be required in 2018 to apply a modifier when a billed drug was not purchased through 340B. According to the proposed rule, since most drugs used in this case are from the 340B program, applying a modifier for non-340B drugs may allow for better cost tracking while not placing an undue burden on providers. As far as the application of the modifier and other rules surrounding it—or whether it even comes to pass—providers can expect more details in the final rule, and likely, additional guidance from CMS.
Upcoming Dates for the Proposed Rule
- CMS is accepting comments until September 11th, 2017
- CMS will respond at the earliest by November 1st, 2017
Looking Ahead and Learning More
For now, organizations must await further developments to know exactly what the program’s future holds, but by closely following CMS and HRSA updates, organizations can adjust their practices as needed to maintain program compliance and ensure continued success under the 340B program. For additional insights—such as the white paper Participating in the 340B Drug Pricing Program, visit Healthcare Business Insights’ portal here.