The 340B Drug Pricing Program is a federal program that allows eligible healthcare facilities, particularly those serving low-income or uninsured patients, to purchase outpatient drugs at significantly reduced prices.
MA plans diverge from CMS guidance on underpayment of claims
In Ensemble’s experience, the agreed reimbursement rate with Medicare Advantage (MA) plans is nearly always tied to the current Original Medicare rate.
When CMS reduced the reimbursement rate for 340B-acquired drugs between 2018 and 2022, MA plans did the same. Similarly, when CMS restored the original payment rate of ASP + 6% in September 2022, MA plans again followed CMS’s lead. MA plans have not, however, followed CMS’s lead in devising a remedy for the underpayment of claims for 340B-acquired drugs which were paid between 2018 and 2022.
Providers are overwhelmingly being ignored or dismissed by contracted and non-contracted MA plans in their efforts to obtain a remedy for these underpayments. Like their peers, our partner 340B hospitals care for many uninsured or low-income patients and the 340B program allows these hospitals to expand such services to their communities. Pursuing recovery against MA plans for these underpayments can be complex and costly; therefore, providers should ensure they have reviewed their MA plan contracts carefully and evaluated their reimbursement data.
340B concerns are part of a worrying MA plan trend
In the current situation, MA plans have a significant financial incentive to ignore and disregard hospitals until actions are time-barred. While the obvious and primary impact of such tactics may be these underpayments owed to 340B hospitals, the long-term consequences of such tactics from MA plans may impact Medicare Advantage beneficiaries’ continued access to care.
As is known in the healthcare industry, providers and hospitals are exhausted with the costly and administratively burdensome tactics employed by MA plans. From reimbursement cuts to denied and delayed payments to not following Medicare coverage guidelines as required, many providers and facilities are increasingly and understandably choosing not to contract with MA plans or to terminate existing agreements.
As Medicare Advantage enrollment grows, it becomes increasingly important to ensure that MA plans tactics that limit or hinder efficient reimbursement are curtailed so that Medicare Advantage beneficiaries continue to have access to medically necessary care.
Ensemble continues to support our clients’ right to fair reimbursement
Ensemble is collaborating with our clients to provide support in pursuing potential recoveries from MA payers for 340B reimbursement. This support includes:
- Drafting 340B inquiry and demand letters
- Reviewing and analyzing claims and reimbursement data
- Researching dispute resolution and arbitration terms to guide clients on their next steps
Additionally, we have partnered with the health care team at the law firm of K&L Gates, LLP, offering our clients one-on-one sessions to discuss the current landscape, evaluate potential actions against payers and address specific questions. The team from K&L Gates, led by partners Andy Ruskin and Gary Qualls, brings decades of provider-side representation experience and significant expertise on 340B issues.
The bottom line
The 340B program is vital for many healthcare facilities, enabling them to provide essential services to underserved communities. The current tensions with Medicare Advantage plans highlight the complexities of healthcare reimbursement and the ongoing challenges faced by facilities in navigating these changes.