CMS finalizes changes to payment policy under the 340B drug discount program

The Centers for Medicare and Medicaid Services (CMS) on November 1, 2017, released the 2018 Hospital Outpatient Prospective Payment System (OPPS) final rule, moving forward with a significant change in payment policy under the 340B drug discount program that was included in the proposed rule earlier released in July.

Beginning January 1, 2018, CMS will no longer reimburse most 340B-purchased drugs at the standard Part B rate of Average Sales Price (ASP) plus 6 percent, and instead will pay a rate of ASP minus 22.5 percent. The change in payment policy has drawn sharp criticism from hospital organizations, including litigation by the American Hospital Association, the Association of American Medical Colleges, America’s Essential Hospitals and member hospitals to block the change in payment policy.

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Congress seeks feedback on changes to Medicare payment policy for certain off-campus hospital outpatient departments, site-neutral payments; American Hospital Association weighs in with CMS

US Supreme Court building

Posted by Anne Phelps, Principal, US Health Care Regulatory Leader on February 12, 2016.

A letter seeking comments on site-neutral payments under Medicare went out to the health care community from Congressional leaders on Friday, February 5 and highlighted a recent change in law that will affect Medicare payments for certain provider-based off-campus hospital outpatient departments (PBD HOPDs).

On November 2, 2015, President Obama signed the Bipartisan Budget Act of 2015, which included a provision on site-neutral payments for PBD HOPDs. Beginning January 1, 2017, the provision will bar PBD HOPDs that execute CMS provider agreements after November 2, 2015 (the date the law was enacted), from being reimbursed under the CMS Outpatient Prospective Payment System (OPPS). PBD HOPDs barred from OPPS will only be eligible for reimbursement under the Medicare Physician Fee Schedule (PFS) or the Ambulatory Surgical Center Prospective Payment System (ASC PPS), both of which have generally lower reimbursement rates than OPPS.

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