CMS sent its proposed remedy for illegal Medicare Part B drug payment cuts for 340B hospitals to the White House for clearance to be released.

CMS Is a Step Closer to Saying How It Will Fix Medicare Drug Payment Cuts for 340B Hospitals

The U.S. Centers for Medicare & Medicaid Services has sent its proposed remedy for almost five years of illegal Medicare Part B drug payments cuts for 340B hospitals to the White House for clearance to be published in the Federal Register.

According to an update Tuesday on the Office of Management and Budget’s website, CMS sent the proposal to OMB for review on Friday.

CMS said in November in its calendar year 2023 hospital outpatient prospective payment system final rule that it would address the remedy for improperly reduced 340B hospital drug payments from 2018 through most of September 2022 in a proposed rule issued before it released its CY 2024 OPPS proposed rule. CMS normally publishes its OPPS proposed rule for the coming year in July. The update on the OMB website suggests that CMS’s proposed remedy for the cuts could be out as soon as June.

The Trump administration cut Part B drug reimbursement for 340B hospitals from average sales price plus 6% to ASP minus 22.5% beginning in 2018. The U.S. Supreme Court in June 2022 unanimously declared the cuts illegal but only for years 2018 and 2019. In January, a federal district judge held that all of the cuts were unlawful. “By some estimates, nearly $10 billion dollars of underpayments are at stake,” the judge wrote.

In the same ruling, the judge denied a motion by national hospitals groups to make CMS promptly remedy all five years of underpayments.

CMS resumed paying 340B hospitals at the ASP plus 6% rate in late September 2022. It has continued paying them at that rate under the CY 2023 OPPS final rule.

CMS sent its CY 2024 OPPS proposed rule to OMB for clearance on April 21.

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