CMS to Reduce 340B Drug Payments to Hospitals by US$1.6 Billion

    View Authors December 2017
    On November 13, 2017, Centers for Medicare & Medicaid Services (CMS) within the U.S. Department of Health and Human Services (HHS) published the final rule revising the Medicare hospital Outpatient Prospective Payment System (OPPS) for CY2018. Among a number of changes, the final rule dramatically reduces Medicare Part B payments to hospitals for separately payable drugs purchased at a discount through the 340B Program by an average of 28%. Currently, Medicare pays hospitals the Average Sales Price (ASP) plus 6% for a separately payable drugs (ASP+6%) regardless of whether the hospital purchased the drug at a discount through the 340B Program. Under the final rule, Medicare will pay hospitals ASP minus 22% for separately payable drugs purchased through the 340B Program. The change will reduce payments to 340B hospitals by an estimated US$1.6 billion that will be redirected to payment for other services within the OPPS.

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