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Supreme Court to Hear 340B Case

July 9, 2021

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CONTACTS
Ivy Baer, Senior Director and Regulatory Counsel

On July 2, the U.S. Supreme Court agreed to hear a case brought by the AAMC, the American Hospital Association, and others that challenges cuts to certain prescription drug payments made by the Centers for Medicare and Medicaid Services under Medicare’s Outpatient Prospective Payment System for 340B hospitals.

In the certiorari petition filed before the Supreme Court, the AAMC argued that the cuts were not made according to statutory requirements that must be followed for changes to payments. The U.S. District Court for the District of Columbia agreed with the AAMC. However, that decision was overturned by the U.S. Court of Appeals for the District of Columbia Circuit, which relied on a previous Supreme Court decision known as “Chevron,” that calls for deference to an agency’s interpretation of the law when the law is determined to be unclear and the agency’s interpretation is not unreasonable [refer to Washington Highlights, Aug. 7, 2020]. The petition for certiorari argued that this case “raises question of fundamental importance regarding the limits of federal agency interpretive authority.”

In response to the Supreme Court’s decision to hear the case, the AAMC issued a statement noting that “a reversal of the cuts will ensure that low-income, rural, and other underserved patients and communities are able to access the vital services they need.”

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