Medicare will slash payment rates under the 340B drug discount programme and broaden site neutral policies in 2027, under a final rule released by the Centers for Medicare and Medicaid Services on Wednesday. Hospital outpatient departments and ambulatory surgery centres will see overall Medicare payments increase 2.3 percent next year, slightly less than the 2.4 percent increase regulators proposed in July.
Under the final rule, Medicare will reimburse 340B participants at the drug’s average sales price minus 28 percent. Regulators said the policy would reduce drug spending by about 5.5 billion dollars next year alone, and it is slightly less severe than the rate proposed earlier this year. Medicare typically pays average sales price plus 6 percent for outpatient drugs. Because the cuts must be budget neutral, regulators will increase payments for non drug services by the same amount, which benefits for profit hospitals that do not participate in 340B.
CMS Administrator Mehmet Oz said the reforms would drive affordability for Medicare beneficiaries by lowering out of pocket costs for drugs and imaging services. The American Hospital Association argued the overall payment increase is inadequate and called the continued assault on the 340B programme deeply disturbing, saying it will put further stress on hospitals, in a statement by Ashley Thompson, its senior vice president of public policy analysis and development.
The rule also expands site neutral payment. Imaging services without contrast, including CT scans, MRIs, X rays and bone density scans, will be paid at the same rate in hospital outpatient departments and freestanding physician offices from next year. CMS estimates the site neutral policy will save taxpayers and beneficiaries more than 9 billion dollars over a decade.
Separately, CMS will remove 637 services from the inpatient only list next year, including endocrine, digestive, auditory and respiratory procedures, as part of a plan to phase the list out over three years.