HHS 340B hospital pay cuts are legal, appeals court rules

A appeals court panel on Friday ruled that an HHS policy that would cut Medicare drug outpatient drug payments by 28.5% at 340B hospitals is legal, overturning a lower court decision.

The U.S. Court of Appeals for the District of Columbia Circuit voted 2-1 to uphold the HHS payment policy. A lower court ruled in May 2019 that the pay changes were unlawful.

Hospital groups including the American Hospital Association, Association of American Medical Colleges and America’s Essential Hospitals had argued that CMS inappropriately used information on the large discrepancy between hospitals’ acquisition costs for drugs and their 340B reimbursements to justify the payment formula changes.

This is the second recent legal defeat for hospitals, as the D.C. Circuit also upheld HHS’ site-neutral pay policy for 2019. Hospitals have since asked for a rehearing in that case.

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Source: modernhealthcare.com

Tags: covid-19, pandemic

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