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July 10, 2023

CMS proposes plan to repay 340B hospitals for drug underpayments and recoup increased payments for non-drug items and services

On July 7, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule detailing the agency’s plan for repaying about 1,600 340B hospitals $9 billion in cuts to hospital outpatient payments under the 340B Drug Discount Program after the Supreme Court ruled the cuts unlawful. CMS’ proposed rule includes a hospital-by-hospital breakdown of expected repayment amounts in Addendum AAA (linked below). The proposed rule also details the agency’s plan to recoup increased payments for non-drug items and services over a 16-year period.

CMS is accepting comments on the proposed rule until September 5. CMS anticipates issuing the final rule before the Calendar Year (CY) 2024 Outpatient Prospective Payment System/Ambulatory Surgery Center (OPPS/ASC) final rule is published in Fall 2023. The proposed CY 2024 OPPS/ASC rule is expected in the coming weeks.

More information on the proposed rule: Fact Sheet, Proposed Rule, Addendum AAA

Additional information is also available in the attached Tax Alert.


Contact Information
For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
   • Heather Meade (
   • Heather Bell (


Plan to repay 340B hospitals