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One-year estimated state impact to hospitals of 340B cuts for FFY 2021

The 340B Drug Pricing Program allows qualifying hospitals to offer affordable prescription drugs to financially vulnerable and fragile patients by purchasing outpatient drugs from manufacturers at a discounted rate. These hospitals then can reinvest the savings in their services.

In 2018, CMS issued a final Outpatient Prospective Payment System rule that reduced by approximately 25% the reimbursement for certain drugs that hospitals acquired through the 340B Program and then continued those cuts in 2019 through 2022. HHS' 340B cuts are currently being challenged through a lawsuit with the U.S. Supreme Court. 

This analysis includes the continued 3.19% budget-neutral adjustment and the 340B reduction (Average Sales Price minus 22.5%) that was identified in the Standard Analytic File with the “JG” modifier, resulting in a net impact. DataGen has analyzed the budget neutrality adjustment and 340B cuts utilizing the 2019 Standard Analytic File showing the potential impact to 340B hospitals.


DataGen reviews and analyzes major Medicare policy changes before and after they happen, creating easy-to-understand analyses to help our state hospital associations, their members and multi-state health systems advocate, adjust and strategize accordingly.

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