CMS Pub. 100-04, ch. 4, § 20.6.17

TB: Drug or biological acquired with 340b drug pricing program discount, reported

for informational purposes for select entities

A. General

On January 1, 2018, CMS established HCPCS Level II modifier TB to facilitate the

collection and tracking of 340B claims data for OPPS providers that are excepted from

the 340B payment adjustment in CY 2018. Beginning January 1, 2019, modifier TB shall

be reported by both select hospitals paid under the OPPS and by nonexcepted off-campus

PBDs of a hospital paid under the PFS if a drug or biological was acquired under the

340B Program. The phrase “acquired under the 340B Program” is inclusive of all drugs

and biologicals acquired under the 340B Program or PVP, regardless of the level of

discount applied to the drug.

Effective January 1, 2023, the TB modifier will be used by rural sole community

hospitals, children’s hospitals, and PPS-exempt cancer hospitals to identify 340B drugs

for informational purposes. Additionally, all pass-through drugs (reported with the status

indicator “G”) purchased through the 340B drug discount program will report with the

modifier TB by all OPPS providers.

B. Effect on Payment

From CY 2018 through CY 2022, rural SCHs, children’s hospitals, and PPS-exempt

cancer hospitals providers that were exempt from the 340B drug payment adjustment

reported the informational modifier TB to identify OPPS separately payable drugs

(reported with status indicator “K”) purchased through the 340B discount program. The

use of modifier TB did not trigger a payment adjustment, and these providers received

and will continue to receive ASP plus 6 percent (or equivalent payment rate derived from

the ASP methodology) for separately payable drugs furnished by these select providers.

Furthermore, between CY 2019 and CY 2022, nonexcepted off-campus PBDs paid under

the PFS (departments that bill the modifier PN on their claim lines) that furnished 340B-acquired drugs and biologicals and were exempt from the 340B payment adjustment

(because their hospital is a rural SCH or children’s hospital) were required to bill under

the PFS using the institutional claim form and report the informational modifier TB for

340B-acquired drugs and biologicals, which did not trigger a payment adjustment, and

these providers received ASP+6 percent for separately payable drugs furnished in CY

2019, even if such drugs were acquired under the 340B Program.

For CY 2023, the presence of modifier TB on a claim to indicate a drug is acquired under

the 340B program will continue to not trigger a payment reduction and be used only for

informational purposes. Claims for 340B drugs and biologicals identified with a TB

modifier will be paid at the same statutory default rate as non-340B drugs and

biologicals. Additionally, the requirement of the TB modifier to identify drugs acquired

through the 340B Program complies with certain requirements of the Inflation Reduction

Act because these modifiers are an established mechanism that have been in use by

hospitals paid under the OPPS. The Inflation Reduction Act establishes a Part B inflation

rebate by manufacturers for certain single source drugs and biologicals with prices

increasing faster than the rate of inflation. However, it also specifically excludes units of

drugs for which the manufacturer provides a discount under the 340B program from the

units of drugs for which a manufacturer otherwise may have a Part B inflation rebate

liability.

A document explaining the use of this modifier is available via the Internet on the CMS

Web site at https://www.cms.gov/files/document/part-b-inflation-rebate-guidance340b-

modifierfinal.pdf.