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A federal district court in Washington, D.C., declined to order HHS to promptly repay hospitals for illegal Part B drug payment cuts spanning five years.

Breaking: Judge Declines to Order HHS to Promptly Repay 340B Hospitals for Illegal Medicare Part B Drug Reimbursement Cuts

A federal district judge in Washington, D.C., this morning ruled that Medicare Part B underpayments to hospitals for 340B drugs from 2018 to 2022 were unlawful. But in a disappointment for the hospital groups that sued, the judge declined to order the government to repay hospitals promptly for those underpayments.

Instead, U.S. District Judge Rudolph Contreras sent the matter back to the U.S. Department of Health and Human Services to decide how to remediate its underpayments. Contreras said he “expects that HHS will act promptly” to do so.

The Centers for Medicare & Medicaid Services announced last week that it plans to issue a proposed rule in April regarding “potential remedies” for the underpayments. Contreras noted in his Jan. 10 opinion that, “by some estimates, nearly $10 billion dollars of underpayments are at stake.”

American Hospital Association General Counsel and Secretary Melinda Hatton said in a statement this morning, “We are disappointed that the district court elected to extend this delay by remanding this case back to the department to determine the appropriate remedy.”

“HHS recently indicated that it expects to propose a remedy by April, and like the district court said in its opinion, the AHA ‘expects that HHS will act promptly to remediate its underpayments.’ We look forward to continuing to work with the Administration to develop a plan to swiftly repay 340B hospitals, with interest, while ensuring the remainder of the hospital field is not penalized as they too continue to serve and care for their patients and communities,” Hatton said.

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