On July 7, 2023, CMS issued a proposed rule outlining the proposed remedy for the 340B-acquired drug payment policy for calendar years (CY) 2018–2022. CMS published this rule to remedy the payment rates previously determined invalid under American Hospital Association v. Becerra. Aspects of this proposed policy will affect nearly all hospitals that were paid under the outpatient prospective payment system during the time of the now-invalidated payment policy. This follow-up FORsights™ article to “CMS Proposes 340B Underpayment Remedy for CY 2018–2022” will look at the additional revenue opportunities for Medicare Advantage.
The following summarizes the current state of Medicare Advantage plans and the actions we recommend that organizations take:
Current State
- CMS ruling silent on applicability to Medicare Advantage plans as of now.
- No trends in payor response yet; most Medicare Advantage plans are waiting on guidance from CMS.
Recommended Actions
- Submit feedback to CMS during the current comment period—which ends September 5, 2023—asking for the ruling to specifically apply to Medicare Advantage plans that reimburse drugs in accordance with CMS methodology during calendar years 2018–2022.
- Identify your organization’s contractual dispute resolution terms and send initial formal notices to your Medicare Advantage payors as soon as possible to preserve dispute rights under potential contract limitations.
- Formally request readjudication of claims from each impacted Medicare Advantage plan by:
- Identifying any contracted Medicare Advantage plans that passed through CMS’ average sales price (ASP) -22.5% drug reimbursement methodology from 2018 to date
- Quantifying any associated underpayments based on historical utilization and adjusted reimbursement rate of ASP +6%
- Send follow-up formal notices to the impacted Medicare Advantage plans requesting the amounts quantified through this process
- Confirm with your contracted Medicare Advantage plans that they are positioned to reimburse drugs at ASP +6% for current and future claims.
Conclusion
Our Managed Care team can assist hospitals with identifying and quantifying any underpayments from Medicare Advantage plans, as well as negotiating settlements directly with these payors on behalf of your organization. If you have any questions or need assistance, please reach out to a professional at FORVIS or use the Contact Us form below.