patient receiving an IV infusion
340B hospitals want an expedited court order stopping CMS from "unlawfully underpaying for 340B drugs."

Hospitals Want Expedited Order Stopping Medicare Payment Cuts for 340B Drugs 

Hospital groups and health systems asked a federal appeals court on Monday to send their successful U.S. Supreme Court lawsuit over Medicare Part B reimbursement cuts for 340B drugs back to a district court for more proceedings. “The government does not oppose this motion,” they said.

American Hospital Association (AHA) and its fellow plaintiffs said in their July 25 filing that when their case is back before the lower court, they will ask the judge to order the government expeditiously “to stop unlawfully underpaying for 340B drugs.”

“Every day that the reduced rate … remains in effect, HHS is drastically underpaying claims for reimbursement for 340B drugs, in direct violation” of the Supreme Court’s unanimous June 15 decision.

The high court ruled that the U.S. Health and Human Services Department unlawfully slashed Medicare Part B drug reimbursement for many 340B hospitals by almost 30 percent during 2018 and 2019. The plaintiffs told the appeals court that when their case is back before the district court, they will amend it to challenge the cuts they also suffered in 2020, 2021, and 2022. 

Earlier this month, the U.S. Centers for Medicare & Medicaid Services said starting next year it “fully anticipate[s]” paying affected hospitals average sales price plus 6% for 340B drugs administered to Part B beneficiaries. They have been paid ASP minus 22.5% since 2018.

“We are still evaluating how to apply the Supreme Court’s recent decision to prior years,” CMS said. “We are interested in public comments on the best way to craft any potential remedies affecting cost years 2018-2022 given that the Court did not resolve that issue.”

Comments on CMS’s calendar year 2023 hospital outpatient prospective payment system (OPPS) proposed rule are due by Sept. 13.

The national hospital groups and individual health systems said in their appeals court motion that they “understand that the parties may disagree regarding what if any action the district court should take” regarding the reimbursement cuts occurring now under this year’s OPPS final rule. “But regardless, speedily presenting that issue to the district court is crucial given that the 2022 OPPS rule is currently in effect and results in unlawful underpayments for 340B drugs every day.”

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