The Centers for Medicare and Medicaid Services (CMS) released a new rule in November 2018 that will increase 340B drug program cuts by expanding 2018 changes to off-campus provider-based hospital outpatient departments paid under the Physician Fee Schedule. These new changes went into effect January 1, 2019.
Explore this issue:January 2019
What Is Changing?
Congress established the 340B Drug Discount Program (also known as the 340B Program) in 1992. The program allows certain providers, considered “safety net providers,” and typically nonprofit hospitals and federally funded clinics, community health centers, family planning clinics, and specialized clinics treating cases of tuberculosis or HIV, to receive reduced rates on certain medications prescribed at those locations.
In 2018, Medicare reimbursed 340B drugs dispensed by certain participating hospitals at a rate of the drug’s average sales price (ASP) minus 22.5%. Before then, 340B drugs were reimbursed at a rate of ASP plus 6%. In 2019, the Medicare reimbursement cuts for 340B drugs are expanded to additional off-campus clinical locations of hospitals subject to the payment cuts in 2018, said Emily Cook, a partner at the global law firm McDermott, Will & Emery.