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Judge Issues Ruling on Remedy in 340B Case

May 10, 2019

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PRESS CONTACTS
Ivy Baer, Senior Director and Regulatory Counsel

U.S. District Court Judge Rudolph Contreras May 6 issued a ruling regarding the remedy in the 340B case filed by the AAMC, the American Hospital Association, and America’s Essential Hospitals. The judge previously concluded that the Centers for Medicare and Medicaid Services (CMS) exceeded its authority when it cut payments to average sales price (ASP) -22.5% for 340B disproportionate share (DSH) hospitals for certain outpatient drugs in the final fiscal year (FY) 2018 Outpatient Prospective Payment Rule (OPPS) [see Washington Highlights, Jan. 11]. 

The judge ordered the parties to propose a remedy. In the latest ruling, Judge Contreras extended his earlier ruling, saying that CMS again exceeded its authority when it imposed the same cuts in the final FY 2019 OPPS rule. While saying that it was “a close question,” the Court let the 2018 and 2019 rules stand and sent them back to the Department of Health and Human Services (HHS). He ordered that “on or before August 5, 2019, the parties shall submit a status report regarding the agency’s progress … to remedy the issues raised in this litigation.” The judge added that he “expects that the agency will act expeditiously to resolve these issues.”

In a joint statement, the associations noted that they are pleased by the ruling and “urge[d] HHS to follow the judge’s directive to promptly resolve the harm caused by its unlawful cuts to Medicare reimbursement for certain 340B hospitals.”

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