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CMS Proposes Deeper Rate Cuts for 340B Hospitals

AUGUST 10, 2020

Hospitals that serve large numbers of patients who are uninsured or covered by Medicaid and Medicare took another big hit on Aug. 4, when the Centers for Medicare & Medicaid Services (CMS) unveiled a new round of cuts to the federal 340B drug program as part of its 2021 Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center Payment System Proposed Rule (CMS-1736-P).

The additional 6.2% cut to Medicare Part B reimbursement for 340B drugs comes just a few days after the Court of Appeals for the District of Columbia Circuit upheld the 2018 OPPS final rule that cut reimbursement for 340B drugs by nearly 30%. The new proposed rule ends up with a 340B reimbursement rate of average sales price (ASP) minus 34.7%, with 6% added overhead and handling costs, for a net proposed rate of ASP minus 28.7%.

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