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America’s Essential Hospitals wants HHS “to swiftly remedy five years of unlawful drug reimbursement cuts to 340B hospitals under Medicare Part B.”

America’s Essential Hospitals Asks HHS to Swiftly Repay 340B Hospitals for Unlawful Medicare Drug Payment Cuts

America’s Essential Hospitals asked U.S. Health and Human Services Secretary Xavier Becerra late last week “to swiftly remedy five years of unlawful drug reimbursement cuts to 340B
hospitals under Medicare Part B.”

“These cuts, and a delay in recompensing hospitals for them, undermine the already precarious financial situation of essential hospitals, frustrating their ability to continue to provide lifesaving, specialized care to their communities,” the group’s president and CEO Bruce Siegel said in a Feb. 17 letter.

The American Hospital Association sent HHS General Counsel Sam Bagentos a similar letter on Feb. 1.

The Centers for Medicare & Medicaid Services reduced Part B drug reimbursement by almost 30 percent for many 340B hospitals beginning in 2018. The U.S. Supreme Court ruled unanimously in June 2022 that the cuts during 2018 and 2019 were illegal. It remanded the case to a federal district judge, who affirmed last month that the cuts during 2020, 2021, and 2022 also were illegal. The judge however declined to order CMS to immediately reimburse hospitals with interest for those underpayments. He sent the matter back to CMS to decide how to remediate its underpayments.

CMS has said it plans to issue a proposed rule in April regarding “potential remedies” for the underpayments, which the district judge said may total “nearly $10 billion.”

America’s Essential Hospitals told Becerra in its letter that:

  • CMS must promptly repay 340B hospitals for unlawful underpayments from 2018 to 2022, plus applicable interest.
  • “Under no circumstances should a remedy involve a new survey of acquisition costs”
  • CMS should not seek to recoup funds from the rest of the hospital field as part of any remedy for its statutory violations.

“We urge CMS to implement a fair, effective, and lawful remedy promptly—without the cost, disruption, and distraction of many more years of litigation to finally put the prior unlawful policy behind it,” Siegel said.

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