Legal Matters

CMS Proposes $9B Lump Sum Payment in Relief For 340B Hospitals

remedy amount between CY 2018 –September 27, 2022 was $10.5B among 1,649 CEs.

By Kyle A. Vasquez, J.D. Mary H. Canavan, J.D. Polsinelli, PC

340B

Covered Entities (CEs) are getting a glimpse into what they can expect to be repaid due the fallout from CMS’ unlawful 340B payment reduction that was struck down by the U.S. Supreme Court in June 2022. CMS discussed a potential budget neutral lump sum payment process in its highly anticipated Hospital Outpatient Prospective Payment (OPPS) Remedy for the 340B-Acquired Drug Payment Policy Proposed Rule (“Proposed Remedy Rule”) published on July 7, 2023. CMS calculated that the overall

The Proposed Remedy Rule outlines CMS’ plan to pay CEs a lump sum payment of the difference between what they were paid and what they should have been paid applying the statutory default rate of ASP + 6 percent at 42 U.S.C. 1395w–3a. Although the Proposed Remedy Rule is framed to be for 340B CEs, there is a component that will impact all OPPS providers for the next several years. CMS outlined a corresponding budget neutrality adjustment that will apply to non-drug items starting in CY 2025. CMS utilized an extended timeline in attempt to balance the interest of all hospital stakeholders. Providers will want to analyze the net impact of this payment reduction and submit comments on the methodology and proposed remedy to CMS.

CMS expects to finalize the