CMS Finalizes Rule Requiring Covered Entities to Submit Medicare Part D 340B Claims Data Beginning Sept. 30, 2027 | 340B News Alert

Authored by: Jason Reddish, Principal, Greg Doggett, Counsel, and Fernando Montoya, Associate

Powers’ Drug Pricing and 340B Program Practice Group

Summary

The Centers for Medicare & Medicaid Services (CMS) finalized a requirement for covered entities to submit 340B Medicare Part D claims data to a “data repository ” for claims dated on or after January 1, 2027. However, covered entities have until September 30, 2027 to submit data for 340B claims with dates of service between January 1, 2027 and March 31, 2027. CMS will analyze the submitted data to determine whether it could be used reliably in the future to exclude 340B units from its Part D inflation rebate calculations.

Background

The Inflation Reduction Act (IRA) requires manufacturers to pay rebates to CMS on Medicare Part B and Part D drugs whose prices rise faster than inflation, but protects drugmakers from having to provide both an inflation rebate and a 340B discount on the same claim.^[1] To prevent Part D inflation rebate-340B duplicate discounts, CMS currently estimates whether a prescription qualifies for 340B treatment by looking at two factors: (1) whether the prescribing provider is affiliated with a registered 340B covered entity, and (2) whether the prescription was filled at a pharmacy registered as a 340B contract pharmacy. Rather than relying on actual 340B claims data, this approach — which the agency calls the Prescriber-Pharmacy Methodology — uses those two indicators as proxies for 340B eligibility. The methodology is widely criticized by manufacturers as being inaccurate.

In a final rule issued last year, CMS announced that it planned to test an alternative methodology called a “340B data repository” beginning in the fall of 2026. Under this approach, covered entities would voluntarily submit 340B claims data to CMS, and the agency would test the repository’s usability. CMS also said in the final rule that it would consider making 340B claims submission claims mandatory in the future. In June of this year, CMS proposed to make submission mandatory for claims dated on or after January 1, 2027.

In short, the Prescriber-Pharmacy Methodology uses Medicare Part D claims data as a proxy to identify 340B units for exclusion, while the repository is being tested as an alternative that would instead rely on claim-level data reported by covered entities themselves.

Finalized Requirements

The final rule requires covered entities to submit 340B Part D claims data beginning September 30, 2027. More specifically, a covered entity, its contract pharmacy, or its third-party administrator would need to submit the following data elements for all 340B Part D claims by the end of the current quarter for the preceding quarter:

1. 1. Date of Service;
   2. Prescription or Service Reference Number;
   3. Fill Number;
   4. Dispensing Pharmacy National Provider Identifier (NPI); and
   5. 11-digit National Drug Code (NDC).

The covered entity will ultimately be responsible for the data submitted. The final rule also requires that data submissions include a 340B provider’s 340B ID and name as designated in OPAIS. CMS provided a chart describing the submission dates and the corresponding dates of service timeframes for 2027:

TABLE B-F1: Medicare Part D 340B Claims Submission Due Dates for Dates of Service in 2027

The final rule provides covered entities additional time to resubmit data to correct previously submitted data or to identify as 340B a claim the entity had previously determined to be non-340B. The rule does not establish a time limit for resubmissions. A covered entity must certify that its data submissions are for verified 340B claims and that, to the best of its knowledge, its submissions include all Part D 340B claims for the relevant period at the time of submission. Covered entities may voluntarily submit 340B claims data earlier than September 30, 2027. (Covered entities can already access the repository and can voluntarily submit 340B claims data to the repository prior to the new requirement’s start date.)

The data submission requirement will be a condition of Medicare participation for providers, which would allow the agency to revoke a provider’s Medicare enrollment if it did not comply with the requirement.

CMS said it will not use data submitted to the repository to calculate Part D inflation rebates. The agency will continue using the Prescriber-Pharmacy Methodology to calculate the total number of 340B units for Part D drugs subject to inflation rebates. If CMS were to decide to use the repository data to determine the total number of 340B units, the agency would issue a proposed rule and solicit stakeholder comments on the proposal.

^[1] The Medicare inflationary rebates are unrelated to 340B rebates that would be paid under the 340B Rebate Model Pilot Program that is set to go into effect on January 1, 2027.
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Powers will continue to monitor developments regarding CMS’ repository. Please contact Powers’ Drug Pricing and 340B Program Team, or your lead Powers attorney, if you have any questions.

About Powers Law

Powers Pyles Sutter & Verville PC (“Powers”) is a DC based law firm with national practices in healthcare, education, government relations, Indian tribal governments, and nonprofit law. Powers attorneys and professionals are nationally known for their extensive expertise in their practice areas and their commitment to client service. For more information, visit www.PowersLaw.com.