Federal Regulatory Update from 340B to Drug Pricing Banner Image

Healthcare Law Blog

Federal Regulatory Update from 340B to Drug Pricing

November 4, 2022

For more information about this blog post, please contact Khaled J. KleleRyan M. MageeRyan L. O’Neill, Connor Breza, William R. Meiselas or Labinot Alexander Berlajolli.

CMS Rolls Out New 340B Hospital Payment Plan Following SCOTUS Decision

As previously reported, the U.S. Department of Health and Human Services ("HHS") stated that it would restore its coverage of 340B drugs and biologics in CY 2023 following a District Court for the District of Columbia ruling which vacated planned 340B coverage reductions in the Calendar Year ("CY") 2022 Outpatient Prospective Payment System ("OPPS"). In accordance with the ruling, CMS recently announced that it is revising its OPPS payment criteria to apply the default rate (generally average sales price ("ASP") plus 6%) to 340B-acquired drugs for the rest of CY 2022. CMS also stated it will reprocess claims paid on or after September 28, 2022, using the default rate. CMS further announced that it will continue the general payment rate of ASP plus 6% for 340B drugs and biologicals through CY 2023, but warned that it would implement a 3.09% reduction to the payment rates for non-drug services to achieve budget neutrality.

CMS Opens Payment Reconsideration For Interoperability Program Participants

U.S. Centers for Medicare & Medicaid Services (“CMS”) recently announced that hospitals participating in the Medicare Promoting Interoperability Program (“MPIP”) may apply for payment reconsideration for Fiscal Year (“FY”) 2023. Hospitals participating in MPIP are annually assessed and given scores based on their compliance with the program’s objectives and measures, many of which pertain to the utilization of electronic health record (“EHR”) systems. Eligible hospitals which receive low scores could be subject to a downward payment adjustment. Hospitals seeking to avoid a downward payment adjustment may submit a request for reconsideration to CMS.

The submission deadline for the FY 2023 Medicare Promoting Interoperability Program payment adjustment reconsideration application is December 2, 2022. The application, with filing instructions, may be accessed here. 

CMS Proposes New Mandatory Medicaid Reporting and Compliance Requirements

CMS recently issued a proposed rule establishing new state reporting and compliance requirements for multiple Medicaid programs and the Children's Health Insurance Program ('CHIP"). The proposed rule will implement statutory updates passed in 2018 which established mandatory reporting on a core set of measures (the “Core Sets”) related to the quality of care provided to certain Medicaid and CHIP beneficiaries. Specifically, the Core Sets focus on the quality of care provided to child beneficiaries in Medicaid and CHIP as well as the quality of behavioral health care for Medicaid-eligible adults. CMS anticipates that this rule will provide states with clear and detailed guidance for reporting on measures in the Core Sets, enabling each state to establish corresponding intra-state reporting requirements for healthcare providers and entities.

A detailed summary of the proposed rule is available here.

Biden Administration Executive Order Seeks Lower Prices of Prescription Drugs

The Biden Administration recently issued an Executive Order  directing HHS to explore additional actions it can take to lower prescription drug costs. Under the Executive Order, HHS will have 90 days to submit a formal report outlining its plans, utilizing the authority of the HHS Innovation Center, to lower drug costs and promote access to innovative drug therapies for Medicare beneficiaries. This action is designed to build on the drug pricing reforms instituted under the Inflation Reduction Act, including enhancement of Medicare’s ability to negotiate prices with manufacturers and capping of yearly out-of-pocket prescription drug costs for Medicare beneficiaries.

Our Team

Khaled John Klele

Khaled John Klele
Partner

​Ryan M. Magee

​Ryan M. Magee
Partner

Ryan Lee O'Neill

Ryan Lee O'Neill
Partner

Labinot Alexander Berlajolli

Labinot Alexander Berlajolli
Associate

Connor Bradford Breza

Connor Bradford Breza
Associate

William R. Meiselas

William R. Meiselas
Associate

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