On June 15, 2022, the Supreme Court ruled in favor of hospitals in AHA v. Becerra issuing a decision that CMS had exceeded its authority to reduce payments under the Outpatient Prospective Payment System to 340B hospitals. In the 2023 OPPS final rule, CMS finalized that payments to 340B hospitals for certain drugs would be set at average sales price (ASP) + 6 percent. Litigation is on-going regarding the remedy for years 2018 through September 27, 2022.
What does this mean for your hospital?
The AAMC supports understanding the financial impact of the 340B payment restoration on your hospital through its hospital-specific OPPS Impact Reports.
We have received questions over the past few months asking about what will come next and answer them in the FAQ section below. We welcome any discussion, notes-comparing, or anything else related to the topic. Sound off here to folks at AAMC or others at member teaching hospitals.
- What questions do you have about Medicare's payment for 340B-acquired drugs?
- How are you using or have you used the AAMC's impact reports to project your 340B drug payments?
We want to hear from you! In addition to posting below, our virtual doors are always open at COTH@aamc.org if you want to reach out directly.
@Lynne Boyle, @Jay Grider, @Katherine Levins
Your FAQs below.
When will I see my 340B payment restored before Jan. 1, 2023?
On Sept. 28, 2022, the District Court for the District of Columbia ruled that the U.S. Department of Health and Human Services (HHS) must immediately begin to reimburse 340B-acquired drugs at average sales price plus 6 percent (ASP+6%). CMS notes that it will upload revised OPPS drug files that will apply the default rate (generally ASP+6%) to 340B-acquired drugs for the rest of the year. Thus, beginning September 28, 2022, 340B drugs will be paid at ASP+6%.
How much higher will my OPPS payments be next year due to restoration of 340B payments?
There are two factors determining your OPPS payment impact. First, the payment restoration will apply to the volume of your 340B-acquired drugs. Second, to offset the budget-neutral payment restoration, CMS will reduce the OPPS-wide conversion factor by 3.19% by applying a -3.09% adjustment in CY2023. The AAMC's hospital-specific OPPS impact reports provides custom analysis of your 340B and other OPPS payments, modeling both factors before and after restoration to help you understand the net impact of the policy change on your institution's payment. Expect the updated release of this report on December 15, 2022.
If you're not on the distribution list already, email COTH@aamc.org, referencing the report with your name, institution name, email address, institution address, and title.
How will CMS pay back previously-cut 340B payments following AHA v. Becerra?
CMS has not released a proposal on how they will repay the unlawful 340B cuts starting with 2018 payments. In the CY2023 OPPS Final Rule, CMS stated that it will address the remedy for 340B-acquired drug payments for years 2018 through 2022 in future rulemaking prior to the CY2024 OPPS/ASC proposed rule. The issue remains at the District Court.
#HealthCare #PatientCare
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Matthew C. Baker, PhD
Director, Payment Policy Research and Analytics
Health Care Affairs
Association of American Medical Colleges
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