Screenshot of CMS meeting agenda
CMS plans to issue a proposed rule in April regarding “potential remedies” for illegal Part B drug payment cuts for 340B hospitals from 2018 through late September 2022.

CMS Plans in April to Address Potential Remedies for Illegal Drug Payment Cuts for 340B Hospitals

Federal Medicare officials plan to issue a proposed rule in April regarding “potential remedies” for illegal Part B drug payment cuts for 340B hospitals from 2018 through late September 2022.

The Centers for Medicare & Medicaid Services revealed April as its target month for the notice of proposed rulemaking in the executive branch’s latest semiannual agenda of upcoming regulatory actions.

The fall 2022 edition of the agenda, belatedly released yesterday, also included the U.S. Health Resources and Services Administration’s Nov. 30 proposed rule to replace its two-year-old 340B administrative dispute resolution process. Comments on that proposal are due Jan. 30.

There is nothing in the new agenda, however, about any forthcoming regulations to implement the Inflation Reduction Act’s drug pricing provisions, such as Medicare Part D and Part B drug price negotiation or manufacturer rebates to Medicare if certain Part B drug prices rise faster than the rate of inflation. CMS so far has been implementing the law’s drug pricing language through guidance instead of through traditional notice-and-comment rulemaking.

Part B Cut Remedies

CMS said in November its hospital outpatient prospective payment system final rule for 2023 would address “in future rulemaking,” rather than in the OPPS rule, how it will remedy five years of illegal Part B underpayments to hospitals for 340B purchased drugs. The U.S. Supreme Court declared the cuts illegal in June. The case is back before a federal district judge. Hospital groups have asked the judge to order the government to repay hospitals with interest immediately. The judge’s decision could come at any time.

In the 2023 OPPS final rule, CMS said only that it planned to issue a separate proposed rule detailing its proposed remedy for 2018 through 2022 in advance of issuing its OPPS proposed rule for 2024. CMS normally publishes its OPPS proposed rule for the coming year in July.

The entry yesterday in the latest semiannual regulatory agenda narrows down the projected timing for the proposed rule about potential remedies for 2018-2022 to April.

CMS’s wording (“…will issue a notice of proposed rulemaking regarding potential remedies…”) suggests that it might offer the public a range of possible remedies for discussion, as opposed to announcing a single remedy it has settled on. CMS solicited public input on potential remedies in July in its 2023 OPPS proposed rule.

ADR Revamp

The semiannual regulatory agenda entry about revising the 340B ADR process adds little new to what HRSA has previously disclosed.

The agenda says the rule would apply to all drug manufacturers and covered entities that participate in 340B and “establish new requirements and procedures’ for the ADR process. “This administrative process would allow covered entities and manufacturers to file claims for specific compliance areas outlined in the statute after good faith efforts have been exhausted by the parties,” the entry says.

The Department of Health and Human Services included the 340B ADR replacement rule in a statement yesterday highlighting its regulatory priorities for fiscal year 2023. HHS said the new ADR requirements and procedures would make the process “more equitable and accessible for participation by program participants” and would support 340B’s “mission to expand access to health care for underserved communities.”

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