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AAMC Supports Legislation, Files Litigation to Rescind Cuts to 340B Hospitals

November 17, 2017

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PRESS CONTACTS
Jason Kleinman, Senior Legislative Analyst, Govt. Relations

Representatives David McKinley (R-W.Va.) and Mike Thompson (D-Calif.) Nov. 15 introduced bipartisan legislation (H.R. 4392) to prevent dramatic cuts in Medicare payments to certain hospitals that participate in the 340B Drug Pricing Program effective Jan. 1, 2018. The bill would rescind the policy, which is part of the Centers for Medicare and Medicaid Services’ (CMS) Outpatient Prospective Payment System (OPPS) final rule [see Washington Highlights, Nov. 3].

In a joint press release issued by Reps. McKinley and Thompson, AAMC Executive Vice President Atul Grover, MD, PhD, expressed support for the bill, stating, “The AAMC would like to thank Representatives McKinley and Thompson for introducing this important bipartisan bill to prevent major Medicare cuts to safety net hospitals that participate in the 340B Drug Pricing Program. This program provides savings to many teaching hospitals, allowing them to maintain vital services for patients at no cost to taxpayers.”

Additionally, the AAMC, American Hospital Association, and America’s Essential Hospitals Nov. 13 filed a lawsuit against the Department of Health and Human Services (HHS). The suit argues that the 340B provisions in the outpatient final rule violate the Social Security Act and, therefore, should be set aside under the Administrative Procedure Act as unlawful and in excess of the HHS Secretary’s statutory authority. The lawsuit requests an injunction that would prohibit HHS from implementing the payment reductions to hospitals that participate in the 340B program, pending resolution of the lawsuit.

As part of a joint press release announcing the lawsuit, AAMC President and CEO Darrell G. Kirch, MD, said, “This decision will penalize safety net hospitals that participate in the 340B program, forcing them to curtail critical programs in communities around the country. The life-saving services provided to patients as a result of 340B savings have been put in jeopardy by this harmful, illegal regulatory change.”

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