FAQ: New Guidance on 340B Drug Modifiers

on Wednesday, 03 January 2018. All News Items | FAQ

Outpatient FAQ January 2018


Is there any additional guidance on the use of modifiers for the payment reduction of drugs purchased through the 340B program?


Yes.  On December 13, 2017, CMS released a list of Frequently Asked Questions (FAQs) concerning “Billing 340B Modifiers under the Hospital Outpatient Prospective Payment System (OPPS).”  There are 17 FAQs that contain information on the policy, definitions of types of hospitals, which types of providers have to report which modifiers, and more.

Some of the more surprising answers are:

  • Hospitals must report modifier ‘TB’ for pass-through drugs (status indicator of “G”). Pass-through drugs are exempt from the 340B payment reduction and will continue to be paid at ASP+6%. The ‘TB’ modifier is informational to allow CMS to understand the scope of the 340B drug discount program.
  • Discarded (wasted) drug amounts of drugs purchased through the 340B drug discount program for applicable entities should be billed on a separate claim line with the JW modifier and the appropriate 340B modifier.
  • Non-excepted off-campus provider based departments (those PBDs that are paid under the Medicare Physician Fee Schedule) must report the ‘TB’ modifier for drugs purchased through the 340B program. The payment reduction does not apply to these types of PBDs since they are not paid under OPPS, but they must report the ‘TB’ modifier in addition to modifier “PN” (Nonexcepted service provided at an off-campus, outpatient, provider-based department of a hospital).
  • Modifiers ‘JG’ or ‘TB’ can be optionally reported on packaged drugs with a status indicator of “N.” Packaged drugs with a status indicator of “N” do not require either modifier to be reported, but a provider may voluntarily report a modifier with these drugs.
When Medicare is either the primary or secondary payer, the appropriate 340B modifier is required in accordance with the OPPS 340B payment policy.

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