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CMS Proposes New 340B Hospital Acquisition Cost Survey

The Centers for Medicare & Medicaid Services (CMS) on Feb. 7 issued notice of its intent to field a new survey to collect acquisition cost data from hospitals participating in the 340B Drug Pricing Program.

The data collection responds to a U.S. District Court for the District of Columbia decision that CMS exceeded its statutory authority to “adjust” Outpatient Prospective Payment System rates for separately payable, 340B-acquired drugs. The court ruled CMS had not collected the necessary data as outlined in the Medicare statute to set payment rates based on acquisition costs for the drugs. CMS appealed the decision, and the decision of the appellate court is pending.

Given the potential it could lose on appeal, CMS proposed in the interim to issue the survey per the statutory requirements and to use the data it collects to set payment amounts for 340B drugs.

To comply with the Paperwork Reduction Act of 1995, CMS must solicit public comment, and the Office of Management and Budget (OMB) must approve the collection request. The deadline for public comment is March 9. Assuming OMB approval, CMS intends to collect information from hospitals from March 23 through April 10. The request would apply to hospitals enrolled in the 340B program in the last quarter of 2018 or the first quarter of 2019.

CMS first sought comments on collecting 340B hospital acquisition cost data in October 2019. America’s Essential Hospitals expressed concern that a proposed drug acquisition cost survey would impose excessive burden on hospitals in the 340B program and raise many operational challenges.

Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Erin O' Malley is the senior director of policy at America's Essential Hospitals.

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