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July 28, 2023

CMS Released the Hospital Outpatient Prospective Payment System

On July 11, 2023, CMS published its annual proposed rule to update the hospital Outpatient Prospective Payment System.  This year’s proposed rule includes the adjustment of Medicare payment rates for 340-B-acquired drugs purchased in cost years 2018-2022. The proposed rule addresses how the agency will restore payments to hospitals affected by a 2018 policy that was set aside in the 2021-2022 term by the Supreme Court in American Hospital Association v. Becerra, which reduced reimbursement amounts on 340B drugs to certain hospitals paid under the Outpatient Prospective Payment System. The rule would provide a $9 billion remedy for hospitals that received a cut in 340B payment from 2018 through 2022. Hospitals would receive the remedy in a lump sum payment. To pay for the restitution, CMS plans to reduce Medicare payments to all hospitals by 0.5% for the next sixteen years.   As noted in a July 14 correction to the proposed rule, comments are due September 5.  

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