Medicare to slash 340B drug payments and expand site-neutral rules in 2027

Medicare finalized a rule that will cut payments for drugs covered by the 340B discount program and broaden site-neutral payment policies beginning in 2027.

The rule is expected to reduce Medicare reimbursements for 340B drugs by billions of dollars and to apply the same payment rates for procedures performed in hospital outpatient departments and ambulatory surgery centers.

Hospitals have strongly opposed the changes, saying they will damage revenue, while CMS officials argue the reforms will lower out-of-pocket costs for beneficiaries and improve overall affordability.

The final rule also provides a modest 2.3% increase in Medicare payments to hospital outpatient departments and ASCs, slightly below the 2.4% increase proposed earlier.