Updates
March 21, 2016
On March 15, 2016, the Medicare Payment Advisory Commission (MedPAC) released its latest report to Congress that included 340B Implications for Medicare Part B Drugs along with a quick fact sheet regarding the report. Key highlights, as they relate to 340B entities, include:
  • MedPAC recommended that Congress reduce Medicare Part B payments to 340B hospitals by 10 percent of the average sales price (ASP) for separately payable 340B drugs. Currently, Part B pays 106 percent of ASP. The recommendations apply to all 340B hospitals (disproportionate share, critical access, sole community, children’s, freestanding cancer hospitals, and rural referral centers) but not grantees (Ryan White, FQHCs, etc.). 
  • MedPAC also recommended that the 10 percent savings be allocated to the Medicare-funded uncompensated care pool for distribution to those hospitals that provide high amounts of uncompensated care. 
  • Although MedPAC did not go into great detail in its report, it stated that 340B hospitals with high levels of uncompensated care (charity care and bad debt) would potentially experience an overall average increase in Medicare payments post-payment reduction while those facilities with low uncompensated care costs may see a slight overall decrease in Medicare reimbursement due to the drug reimbursement reduction. 
To view the full alert, click here.