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  • Washington Highlights

    Hospital Associations Will Appeal Court Decision Allowing Cuts in Payments to 340B Hospitals

    Ivy Baer, Senior Director and Regulatory Counsel
    Jason Kleinman, Senior Legislative Analyst, Govt. Relations

    The AAMC, American Hospital Association, and America’s Essential Hospitals will appeal a Dec. 29 ruling from the U.S. District Court for the District of Columbia that dismissed a lawsuit challenging a Centers for Medicare and Medicaid Services (CMS) final rule that significantly reduced Medicare reimbursements to many hospitals in the 340B Drug Pricing Program. The Outpatient Prospective Payment System (OPPS) reduced payments for non pass-through drugs from average sales price (ASP) plus six percent to ASP minus 22.5 percent beginning Jan. 1 [see Washington Highlights, Nov. 3, 2017].

    The judge found that it was premature for the court to have jurisdiction in the case because no claim for reimbursement under the new rule had been submitted. Since the case was dismissed for jurisdictional reasons, the judge did not address the merits of the arguments presented by the plaintiffs.

    In a joint press release, the associations stated they will continue to pursue the lawsuit. AAMC President and CEO Darrell G. Kirch, MD, said, “The court’s decision, while not ruling on the merits, still permits CMS to make drastic cuts to safety net hospitals that participate in the 340B program, which allows teaching hospitals to strengthen care for low-income, rural, and other underserved patients.” He continued, “The fact remains that the CMS rule is bad policy. We are committed to reversing this flawed policy to ensure patients continue to receive the vital services supported through the 340B program.”