340B Compliance with New Billing Modifier Requirements

March 2024

By: Dennis Killian, PharmD, PhD, 340B ACE

In early 2024, CMS rolled out changes to 340B modifier requirements for Part B drugs. There are more changes coming in 2025.

Is your organization prepared? Last month, we shared three considerations on how to remain compliant with 340B Report subscribers.

Although compliance with Medicare Part B billing falls outside of a HRSA audit scope, it is important that all covered entities remain compliant with those guidelines. Pharmacy leaders and 340B coordinators are well positioned to identify any 340B-specific billing discrepancies and can assist with routine auditing after billing changes are implemented.

The updated CMS billing guidance, which went into effect January 1, 2024, requires all providers and suppliers billing Medicare Part B for status indicator “K” 340B drugs to use the “JG” or “TB” modifier.

Considerations for the updated CMS billing requirement include:

1. Previously, it was optional for critical access hospitals (CAH) to utilize the “TB” modifier for status indicator “K” 340B drugs. It is now mandatory for CAHs to submit the “TB” modifier.
2. 340B covered entities not previously reporting a modifier, such as grantees, should report the “JG” modifier when billing Medicare Part B for status indicator “K” 340B drugs.
3. Providers and suppliers, such as contract pharmacies, should submit the “JG” modifier when billing Medicare Part B for status indicator “K” 340B drugs.
   

Starting January 1, 2025, all 340B covered entities must transition to the “TB” modifier on 340B claims for separately payable Medicare Part B drugs and biologics. Covered entities also have the option for early transition to the “TB” modifier in CY24.

A complete list of drugs with status indicators is available on the CMS website under the most recent Addendum B file, which is updated each calendar quarter.

Additional information can be found in the following resource: Medicare 340B Billing Changes

Want to make sure your facility doesn't miss any critical compliance elements? Our 340B team is ready to support you!