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Association Comments on Proposed 340B Cut Remedy

In a Sept. 5 letter to the Centers for Medicare & Medicaid Services (CMS), America’s Essential Hospitals urged the agency to swiftly finalize a remedy to repay hospitals in the 340B Drug Pricing Program for five years of Medicare Part B drug payment cuts. Through these cuts, effective from 2018 through fall 2022, CMS reduced Part B reimbursement to 340B hospitals by nearly 30 percent, totaling $10.5 billion in reduced drug reimbursement.

In the CMS rule outlining a remedy, CMS proposed to make $9 billion in one-time, lump-sum repayments to 340B hospitals at the end of 2023 or in early 2024. CMS has already repaid an additional $1.5 billion in reprocessed claims for drug payments in 2022. Repayments will include what hospitals would have received in beneficiary cost sharing without the cuts. CMS also proposed to reduce Outpatient Prospective Payment System payment rates for non-drug items and services over 16 years to maintain budget neutrality and recoup higher payments that were paid for these services from 2018 to 2022.

In its comments, America’s Essential Hospitals recommends CMS swiftly finalize the proposed lump-sum repayments and the methodology for calculating these amounts. Once CMS finalizes and issues the repayments, we urge CMS to address other issues, including:

  • Withdraw its proposed budget neutrality recoupment, which would begin in 2025.
  • Include interest on repayment amounts.
  • Consider how its policy would affect Medicare Advantage payments to hospitals.

CMS extended the comment deadline to Sept. 11. We urge essential hospitals to submit their own comments to ensure the agency acts without delay to repay 340B hospitals.

Contact Senior Director of Policy Erin O’Malley at or 202.585.0127 with questions.


About the Author

Shahid Zaman is a senior policy analyst at America's Essential Hospitals.

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