OIG Reports on, Proposes Alternatives to Medicare Part B Reimbursement for 340B Drugs

December 7, 2015

McDermott Will & Emery (12/7) reported on a U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) report “on the subject of Medicare Part B (Part B) payments made for covered outpatient drugs purchased through the 340B Drug Pricing Program (340B Program).” The report is the result of a review by OIG that found “in 2013, Part B payments exceeded drug costs to Covered Entities by approximately $1.3 billion.” The report lays out three alternative payment methodologies that would allow Part B and its beneficiaries to “share in the savings accrued to Covered Entities through the 340B Program. … [T]he total savings to the Part B Program varies among the three options: the first alternative methodology (100 percent of ASP) represents a 5 percent reduction in total Part B expenditures on 340B drugs, the second methodology represents an 18 percent reduction and the third represents a 31 percent reduction in Part B spending on 340B drugs.”