CMS 2027 Proposed Rules Signal Significant Changes for 340B Covered Entities

August 25, 2026 Sponsored Content 340B Report Views

Now is the Time to Prepare and Weigh In

Proposed 37% Reduction in Medicare Part B 340B Drug Reimbursement

Perhaps the most consequential proposal for 340B hospitals is CMS’s plan to reduce Medicare Part B reimbursement for separately payable 340B drugs furnished by non-exempt OPPS hospitals.

Under the proposal, reimbursement would move from the current “ASP plus 6%” to “ASP minus 33.4%”. This represents an effective reduction of approximately 37% in Medicare payment for affected 340B drugs. CMS estimates that the policy would reduce payments by approximately $4.85 billion in CY 2027, with the reduction incorporated into the broader OPPS budget-neutrality framework.

The financial impact will vary by organization based on Medicare Part B drug utilization, payer mix and the extent to which individual drugs are separately reimbursed under OPPS. CEs should begin modeling the potential impact using their own historical claims and drug utilization data rather than relying solely on CMS’s aggregate estimate.

The proposal also accelerates the repayment of the previous 340B payment remedy. CMS proposes increasing the reduction applied to non-drug OPPS payments from the current 0.5% to 3% through CY 2029, rather than continuing the 0.5% reduction through 2035.

Billing Modifier Changes Will Require Operational Preparation

To operationalize the reimbursement changes, CMS is also proposing changes to the modifiers used to identify 340B and non-340B drug claims.

Under the proposal, non-exempt 340B hospitals would once again be required to report the “JG” modifier (previously used from 2018 through 2022), which would identify claims subject to the proposed “ASP minus 33.4%” reimbursement methodology. Exempt 340B hospitals and non-OPPS CEs would continue reporting the “TB” modifier, which would not trigger the proposed reimbursement reduction, but rather be used for CMS to appropriately calculate inflation rebate penalties for drug manufacturers. CMS also proposes an “XX” modifier for non-340B drug charges from OPPS hospitals (this modifier naming convention will be updated with the final rule).

These changes could require modifications to billing systems, charge master processes, pharmacy-to-billing workflows and internal controls. Organizations should begin identifying the technical and operational steps that would be necessary to implement the proposed modifier requirements while awaiting CMS’s final instructions.

Provider-Based Requirements Could Have 340B Eligibility Implications

Another area deserving attention involves CMS’s proposed implementation of new provider-based requirements established by the 2026 Consolidated Appropriations Act.

Notably, offsite hospital outpatient departments (HOPDs) would be required to obtain and begin billing with location-specific National Provider Identifiers (NPIs) effective January 1, 2028, and CMS proposes requiring provider-based attestations for all offsite HOPDs by the end of 2027.

For 340B organizations, these requirements could extend beyond Medicare billing and enrollment considerations. CEs that carve in Medicaid will need to time the use of new NPIs with the quarterly publishing of HRSA’s Medicaid Exclusion File. Additionally, failure to submit the required attestation for an offsite department could potentially jeopardize provider-based status and, ultimately, the site’s eligibility as a 340B child site.

CEs should therefore evaluate how their provider-based locations, NPIs, OPAIS registrations and Medicaid billing arrangements intersect.

New Medicare Part D 340B Data Repository

The proposed CY 2027 PFS rule introduces another significant data-reporting requirement. CMS proposes mandatory submission of Medicare Part D claims data to a new Medicare Part D Claims Data 340B Repository, effective January 2027. The repository is intended to provide CMS with more complete and reliable information about 340B claims and support the exclusion of 340B units from IRA-mandated inflation rebate penalty calculations.

The requirement would apply to all 340B providers and encompass Medicare Part D 340B-eligible claims, including claims dispensed through entity-owned and contract pharmacies. CMS proposes, at minimum, quarterly submission of specified data elements through a CMS-managed portal, with technical instructions expected later in 2026.

Importantly, this proposed repository would not replace existing claims-data submission processes associated with 340B ESP, Beacon MFP reconciliation or any future HRSA-approved 340B rebate pilots. Organizations should therefore anticipate potentially managing multiple data-reporting processes with overlapping but distinct requirements.

What Should CEs Do Now?

Although these provisions remain proposals, CEs should begin preparing rather than waiting for final rules. This includes:

Organizations should model the potential financial impact of the proposed Part B reimbursement reduction, including the implications for Medicare Advantage plans that follow OPPS billing rules.
340B hospitals should begin scoping billing-system changes associated with new modifier instructions.
CEs should ensure that processes are in place to ensure compliance with provider-based rules for offsite departments, and
Organizations should monitor CMS technical instructions related to the proposed Medicare Part D repository and evaluate their ability to produce the required data.

Finally, CEs should participate in the regulatory process. The proposed OPPS rule has a comment deadline of August 31, 2026, while comments on the PFS proposed rule are due September 14, 2026.

The proposed rules represent another significant shift in the 340B landscape. For CEs, the message is clear: now is the time to quantify the potential impact, identify operational gaps and prepare for a regulatory environment that increasingly connects 340B participation with detailed claims and data-reporting requirements.