CMS’ 340B Rate Cut Continues to Dampen Hospital Outpatient Expansion Efforts -

Hospitals hoping to benefit from favorable 340B drug pricing when acquiring independent physician practices for conversion to hospital outpatient “provider-based” departments (PBDs) or similarly converting hospitalowned physician practices should, as part of any decision calculus, pay close attention to recent 340B reimbursement rate reductions and monitor pending litigation challenging those reductions. CMS recently promulgated a final rule extending, for CY 2020, its policy limiting 340B drug reimbursement to Average Sales Price minus 22.5 percent for certain off-campus PBDs (i.e., those receiving payment for services under the Medicare Physician Fee Schedule as opposed to the Medicare Hospital Outpatient Prospective Payment System (OPPS) generally applicable to outpatient hospital services).