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340B Payment Cut Overturned By US Federal Court; What Comes Next?

 
• By Michael McCaughan

Siding with coalition of hospitals, judge ruled that HHS lacked authority to cut Medicare reimbursement for drugs purchased at 340B prices. That should change the dynamics of the 340B reform debate heading into 2019 – but don’t expect the Trump Administration to back down on its push to rein in what it sees as abuses of the discount.

Hospital exterior

The US Department of Health & Human Services and a coalition of hospitals have about six weeks to prepare arguments for how to restore Medicare Part B payments for drugs purchased using the 340B discount program after a federal court ruled that HHS lacked the authority to set the reduced payment rate currently in effect.

On Dec. 27, Judge Rudolph Contreras ruled in favor of the American Hospital Association, America’s Essential Hospitals, and the Association of American Medical Colleges in a lawsuit challenging the 2018 Medicare Part B Hospital Outpatient Prospective Payment System policy of paying a much lower rate for drugs purchased at 340B prices: average sales price minus 22.5% rather than the statutory standard of ASP+6%

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