340B Hospitals Owed $9 Billion in Reimbursements CMS Proposed Rule Says

CMS has issued a proposed rule that aims to spend $9 billion to reimburse nearly 1,650 hospitals participating in the 340B drug discount program for underpayment of fees over the past five years.

The 340B drug discount program requires drugmakers to offer discounts ranging from an estimated 25 to 50 percent to participating hospitals and clinics in return for participating in Medicare and Medicaid.

Manufacturers and HHS have clashed over the increasing use of contract pharmacies not owned by covered entity hospitals, which has caused many drugmakers to limit their participation in the program, citing duplicate discount requests from the 340B program and other issues that are currently being contested in litigation.

The CMS notice comes in the wake of a U.S. Supreme Court decision last year that ruled the agency had underpaid the covered entities for 340B medications from 2018 through most of 2022.

At issue were Medicare payment cuts in 2018, which resulted in hospitals going from receiving the average sales price (ASP) of a prescription drug plus 6 percent, to receiving the ASP minus 22.5 percent, in an attempt by CMS to reflect the actual costs of hospitals more accurately once 340B drug discounts were taken into account.

Read the CMS proposed rule here.

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