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New CMS Rule Requires Claims Modifiers for All 340B Entities

All 340B covered entities that submit claims for separately payable Part B drugs and biologicals face a new requirement starting January 1, 2024.
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All 340B Drug Pricing Program (340B) covered entities, including hospitals and non-hospitals, that submit claims for separately payable Part B drugs and biologicals will be required to report the applicable modifier on claim lines for all 340B acquired drugs starting January 1, 2024. New guidance issued by CMS on December 20, 2022 stated this requirement. Entities are encouraged to begin using the appropriate modifier as soon as possible.

As previously required by the 2023 Outpatient Prospective Payment System Final Rule, all hospitals are currently required to use the “JG” and “TB” modifiers to identify 340B drugs on claim lines. This excludes rural sole community hospitals, children’s hospitals, and Prospective Payment System-exempt cancer hospitals, which are instead required to use the “TB” modifier on claim lines to identify 340B drugs. These modifiers will be utilized for informational purposes.

The new guidance from CMS states grantee sites, including Ryan White clinics and hemophilia clinics, will be required to identify 340B drugs with the “JG” modifier for claims with dates of services beginning no later than January 1, 2024. The guidance issued at the end of December does not specifically mention if critical access hospitals (CAHs) are required to use the “JG” or “TB” modifiers to identify 340B drugs.

DesignationModifier
DSH, RRC, non-rural SCHJG
PED, CAN, rural SCHTB
Grantee (including RW and HM clinics)JG
CAHNot determined

The Inflation Reduction Act of 2022 will establish a Part B inflation rebate from manufacturers on certain drugs and biologicals when prices increase faster than the rate of inflation. The act excludes drugs for which the manufacturer provides a discount under the 340B program.

“Further program instruction on the Part B inflation rebate is forthcoming and will include information on how CMS will determine rebatable units during CY 2023 for purposes of determining the Part B inflation rebate,” the CMS guidance said.

The professionals at Forvis Mazars can help you understand how the new modifier requirements may impact your organization as this may necessitate operational changes to billing systems. If you have any questions or need assistance, please reach out to one of our professionals or submit the Contact Us form below.

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