Richard B. Davis, Associate

Publications & Media

CMS Publishes 340B Drug Acquisition Cost Survey: Respond by May 15, 2020

To Be or Not to 340B Blog Brenda M. Maloney Shafer, Richard B. Davis

Healthcare costs and fees concept.Hand of smart doctor used a calculator for medical costs in modern hospital with VR icon diagram

On April 24, 2020, the Centers for Medicare and Medicaid Services (CMS) finalized and published a survey intended to capture the actual amounts paid by 340B covered entities (excluding critical access hospitals) for 340B drugs. CMS then intends to use the data collected from the survey to adjust the Medicare Part B reimbursement rate for 340B drugs purchased by certain covered entities. This survey is an offshoot of the ongoing litigation surrounding the Medicare Part B payment reductions that CMS imposed on 340B drugs for certain 340B covered entities, and reflects a continued effort by CMS to reduce Medicare Part B reimbursement despite recent judicial setbacks. We discussed these payment reductions and the ongoing litigation in a prior article.

The instructions for the CMS survey require that each reporting 340B covered entity report the net acquisition cost for each 340B drug (reflecting the 340B discount) purchased by the covered entity between October 1, 2018, and March 31, 2019. The survey provides two options for reporting the net acquisition cost data:

  1. The first option is the submission of a "Detailed Survey" which involves the covered entity entering the actual acquisition cost for each 340B drug purchased between October 1, 2018, and March 31, 2019 "as identified by the [drug's] Healthcare Common Procedure Coding System (HCPCS) code for the amount corresponding to a single billing unit of the corresponding HCPCS billing code."
  2. The second option is the submission of a "Quick Survey," which merely involves the covered entity indicating that it prefers that "CMS utilize the 340B ceiling prices obtained from Health Resources and Services Administration (HRSA) as reflective of [its] hospital acquisition costs."

This presents covered entities with a seemingly clear choice between an onerous and time-consuming process, and a relatively easy one. Covered entities, however, must remember that CMS is conducting this survey to determine the appropriate amount of Part B payment reduction for 340B drugs. Given CMS' motives here, covered entities should carefully weigh the pros and cons of each option and may wish to seek legal counsel to determine the best approach for their organization. We also hope to see more guidance from 340B Health and other advocacy organizations on this topic as they obtain input from their constituencies.

If you have any questions about this survey and how they might affect your 340B program participation, please contact your Quarles & Brady attorney or:

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