How we're addressing the 340B-Aquired Drugs ruling

On Sept. 28, 2022, a U.S. District Court judge ruled that CMS must cease reimbursement cuts to outpatient 340B drugs immediately. This reaffirmed an earlier Supreme Court Decision that CMS can’t apply the average sales price (ASP) minus 22.5% drug payment rate for 340B-Aquired Drugs.

As a result, CMS has reverted to paying the default rate (generally ASP plus 6%) under the Medicare statute for 340B-Aquired Drugs.

See CMS’s update from Dec. 20, 2022 for details.

What does this mean for our providers?

  • Automatic adjustments: Aligning with CMS and our Medicare Administrative Contractor’s guidance, we’re automatically reprocessing impacted claims billed with modifier JG paid on or after the ruling date of September 28 – paying the default rate (generally ASP plus 6%). There’s no need for providers to resubmit claims.
  • Paying new rate: Our systems were updated to begin paying 340B claims at the default rate (generally ASP plus 6%) in early November. Claims paid at the default rate won’t be adjusted. Claims paid on or after September 28, but prior to system effective date, will be automatically adjusted as well.
  • Not adjusting: We aren’t adjusting claims paid prior to September 28 (see reasoning below).

What about dates prior to September 28?

The Supreme Court case was looking at historical CMS payment cuts back to 2018. To date, CMS has only reverted to the default payment rate for claims paid on or after September 28.

CMS has stated they will address impacted claims from CYs 2018-2022 in future rule making prior to the CY 2024 OPPS/ASC* proposed rule.


*Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System