CMS Proposes 340B Payment Cuts in the 2027 OPPS Rule: Time to Diversify Your Revenue Model

In early July, CMS released its proposed Calendar Year 2027 Hospital Outpatient Prospective Payment System (OPPS) rule, putting 340B hospital reimbursement back in the spotlight.

Under the proposal, CMS would significantly reduce Medicare Part B reimbursement for certain separately payable drugs acquired through the 340B Drug Pricing Program. Specifically, CMS proposes moving payment for affected 340B-acquired drugs from the current ASP plus 6% methodology to ASP minus 33.4% beginning in 2027.

CMS based the proposed rate on findings from its 2026 OPPS Drug Acquisition Cost Survey and says the change would better align Medicare reimbursement with hospitals’ reported acquisition costs. The agency also projects that lower reimbursement would reduce beneficiary cost-sharing for affected drugs.

The proposal echoes a longstanding policy debate over how Medicare should reimburse hospitals for 340B-acquired drugs — an issue that previously reached the Supreme Court in American Hospital Association v. Becerra in 2022. Unlike the earlier policy struck down by the Court, CMS conducted a hospital acquisition-cost survey before issuing the current proposal, a distinction that could be significant if the policy faces a future legal challenge.

What CMS is Proposing

The CY 2027 proposal includes several provisions that could affect hospital outpatient reimbursement:

• Lower reimbursement for 340B-acquired drugs. CMS proposes paying affected separately payable 340B drugs at ASP minus 33.4%, rather than the generally applicable ASP plus 6% methodology.
• Expanded site-neutral payment policies. Additional changes would reduce payment differences between certain hospital outpatient departments and lower-cost care settings, potentially creating further reimbursement pressure for affected hospital-affiliated sites.
• Accelerated 340B remedy recoupment. CMS also proposes increasing the annual OPPS conversion-factor reduction associated with recouping prior 340B remedy payments from 0.5% to 3.0% for affected hospitals, with the goal of completing the offset sooner.

The proposal is not final. Comments are due August 31, 2026, and any finalized policies generally would take effect January 1, 2027.

But regardless of the final outcome, the proposal reinforces a broader strategic reality: covered entities with revenue models heavily dependent on a single reimbursement mechanism may be more vulnerable when federal payment policy changes.

The Strategic Problem

Many covered entities use the financial benefit generated through participation in the 340B Program to support patient care, expand access, and sustain critical services.

When a significant portion of that financial benefit is tied to Medicare reimbursement for 340B-acquired drugs, changes in federal payment policy can materially affect program economics.

The CY 2027 proposal illustrates that exposure. If finalized, affected hospitals could receive substantially less Medicare reimbursement for certain 340B-acquired drugs, even as they continue to navigate broader reimbursement pressures, manufacturer restrictions, compliance requirements, and evolving federal policy.

How a PIAP Can Support a More Diversified Model

A Premium Insurance Assistance Program (PIAP) can help eligible uninsured or underinsured patients obtain and maintain health coverage by providing financial assistance with qualifying insurance premiums.

When appropriately structured and administered, a PIAP may help a covered entity:

• Expand access to comprehensive coverage for eligible patients who might otherwise remain uninsured or face gaps in coverage.
• Create additional reimbursement opportunities when newly insured patients receive covered services that can be billed to their health plans, subject to applicable contracts, plan benefits, and reimbursement terms.
• Improve continuity of care by helping eligible patients maintain coverage and access medications, preventive services, specialty care, and other covered benefits.
• Diversify the organization’s payer and revenue mix, reducing reliance on any single reimbursement mechanism or federal payment policy.

A PIAP does not eliminate exposure to changes in 340B or Medicare policy. But as part of a broader financial and patient-access strategy, it can help organizations build a more diversified model that is less dependent on any one source of reimbursement.

What Should Covered Entities Do Now?

The proposed 2027 OPPS rule is an opportunity to evaluate your organization’s exposure before any changes take effect.

Consider modeling how the proposed changes could affect your Medicare Part B drug reimbursement and overall 340B economics. Then look beyond 340B savings alone: assess your payer mix, uncompensated-care population, coverage gaps, and opportunities to help eligible patients obtain sustainable health coverage.

Schedule time with the American Exchange team to explore how a PIAP could support your patient coverage and revenue diversification strategy.