AHA wins lawsuit over 340B payment cuts

Amy Baxter | September 30, 2022 | Health Exec | American Hospital Association (AHA)

The American Hospital Association (AHA) has claimed victory after the U.S. District Court for the District of Columbia ruled that the Department of Health and Human Services (HHS) must immediately halt payment cuts to the 340B Drug Pricing Program.

The 340B program requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs to healthcare organizations at discounted prices for uninsured and low-income patients. AHA sued HHS in August after the agency cut payments to the program for 2022, calling every day the agency continued to cut payments as unlawful.

This week, the judge agreed.

“The prospective portion of the 2022 reimbursement rate shall be vacated because it is defective and because vacating this portion of the 2022 OPPS Rule will not cause substantial disruption,” wrote Judge Rudolph Contreras in his ruling Sept. 28. “HHS should not be allowed to continue its unlawful 340B reimbursements for the remainder of the year just because it promises to fix the problem later.”

While the ruling immediately halted the lower payments, the judge did not issue a ruling on the 2020-2022 payment cuts in AHA’s case and the AHA’s motion to repay hospitals for payment cuts from 2018 without penalizing other hospitals.

AHA claimed victory in the case earlier this summer for payment cuts made to hospitals in 2018 and 2019. That court ruling stated HHS cannot vary payments based on different groups of hospitals. The drastic cuts to outpatient reimbursement rates for certain hospitals in the 340B program were ruled unlawful. However, the court did not specify a remedy for the unlawful cuts, remanding the case back to the District Court for D.C.

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Amy Baxter

Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."

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