New Developments in the 340B Hospital Environment

GE Healthcare Partners works with hospitals to implement, extend, and optimize participation in the 340B program. As you may have heard, new 340B guidelines were announced yesterday, November 1, 2017. Here is a brief summary of the changes which will be effective January 1, 2018.

On November 1, CMS issued its 2018 Outpatient Prospective Payment System (OPPS) Final Rule, which has finalized the Medicare Part B payment reduction for certain drugs acquired through the 340B Program for Disproportionate Share Hospitals and Rural Referral Centers.

The current rate for Medicare Part B payment is set at Average Sales Price (ASP) plus 6%. Effective January 1, 2018, the new payment rate for these affected 340B participants will be reduced to ASP minus 22.5%, which is nearly a 27% reduction in Medicare Part B reimbursement. It is also very important to note that commercial payer rates are often based on Medicare, so payment from these payers are likely to be reduced as well.

The final rule also establishes two modifiers to identify whether a drug was purchased under the 340B program—one for hospitals that are subject to the payment reduction and another for exempted hospitals that purchase drugs under the 340B program. The goal is to better track what drugs are being purchased under the program. Without that change, hospitals might have received a cut in reimbursement for drugs not purchased under the discount program.

To understand how this new payment rule may affect your organization, as well as to discuss strategies to lessen this negative impact to your outpatient revenue, please contact the GE Healthcare Partners team by clicking the button below. Our 340B experts will follow-up with you.

340B Final Rule

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