Payment Rate for 340B-acquired Drug Reimbursement

The drug pricing files contain the payment amounts used to reimburse for Part B covered drugs for the applicable quarter of 2018. The payment amounts in the quarterly ASP files are 106 percent of the Average Sales Price (ASP) calculated from data submitted by drug manufactures (ASP X 1.06). The ASP rate must be adjusted before applying the 22.5 percent reduction.

As an example, ABC Facility located in Virginia files the following claim that incudes HCPCS code J1453.

Reimbursement Equation is: (ASP Rate/1.06) X 0.775 = Reimbursement

• January 2018 ASP File Rate for J1453 = 2.047, which includes a 6% markup
• ASP Rate Converted to 100% is 2.047/1.06 = 1.931132
• 100% Rate with Adjustment for 340B Drugs = 1.931132 X 0.775 = 1.497
• 340B Adjustment Rate of 1.497 X 150 Units = 224.55

Beginning January 1, 2018, Medicare pays an adjusted amount of the ASP minus 22.5 percent for certain separately payable drugs that are acquired through the 340B Program and furnished to a Medicare beneficiary by a hospital paid under the OPPS that is not excepted from the payment adjustment policy. For purposes of this policy, “acquired through the 340B Program” means the drug was purchased at or below the 340B ceiling price from the manufacturer and includes 340B drugs purchased through the Prime Vendor Program. (See Billing 340B Modifiers under the Hospital Outpatient Prospective Payment System (OPPS) Frequently Asked Questions (PDF, 71 KB))

Resources

• MLN Matters® Article: MM10447 (PDF, 78 KB)
• Billing 340B Modifiers under the Hospital Outpatient Prospective Payment System (OPPS) Frequently Asked Questions (PDF, 71 KB)
• 2018 ASP Drug Pricing Files