Hospitals disappointed by court decision leaving 340B repayment to HHS
On Tuesday, a federal court ruled to allow HHS to propose an appropriate remedy for its past underpayments.
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On Tuesday, a federal court ruled that the Department of Health and Human Services can propose the appropriate remedy for underpaying hospitals in the 340B program, to the disappointment of the American Hospital Association and America's Essential Hospitals.
"For more than five years, the Department of Health and Human Services has unlawfully withheld vital funding from 340B hospitals that helps them provide a range of important benefits to their patients and communities," said Melinda Hatton, AHA general counsel and secretary. "We are disappointed that the district court elected to extend this delay by remanding this case back to the department to determine the appropriate remedy."
Dr. Bruce Siegel, president and CEO of America's Essential Hospitals said, "We are disappointed the district court gave the Department of Health and Human Services discretion in how to remediate the department's unlawful payment cuts for 340B hospitals. These steep reductions have undermined essential hospitals and have come at the worst possible time, as providers struggle with the heavy financial pressures of COVID-19."
WHY THIS MATTERS
Five years of funding for 340B hospitals has been lost in these cuts, the groups said.
The AHA said HHS recently indicated that it expects to propose a remedy by April. It quoted the district court opinion that it "expects that HHS will act promptly to remediate its underpayments." Hospitals want repayment, with interest.
"Essential hospitals cannot afford additional delays in repayment, and we stand ready to work with HHS to resolve this matter quickly," Siegel said.
THE LARGER TREND
The cuts have represented an annual $1.6 billion loss to hospitals. They came about under the Trump Administration in the 2018 Outpatient Prospective Payment System Final Rule that cut drug reimbursement, first by 28.5% and then, by 22.5%.
The AHA sued. The case went to the Supreme Court, which in June 2022, ruled in favor of hospitals' claims to 340B drug reimbursement but left questions as to how hospitals would be made whole for the years they didn't receive billions from HHS.
In September 2022, a federal court ruled that HHS should immediately stop the 30% drug reimbursement cuts to hospitals in the 340B program. The order from Judge Rudolph Contreras with the U.S. District Court for the District of Columbia, rejected HHS' plan to wait until January 1, 2023, to restore the full outpatient drug payment rates to 340B hospitals.
But in Tuesday's ruling, the U.S. District Court for the District of Columbia decided to allow HHS to propose an appropriate remedy for its past underpayments to hospitals.
ON THE RECORD
"After the American Hospital Association's unanimous victory in the U.S. Supreme Court last summer, the D.C. court ordered HHS to halt its unlawful 340B cuts for the remainder of 2022. In the outpatient prospective payment system final rule for calendar year 2023, the agency said it would defer any proposal of a remedy for CYs 2018-2021 until sometime before its CY 2024 payment rule, and in subsequent legal filings, the agency stated that it intends to announce a final remedy before the 2024 OPPS rulemaking cycle is complete next fall," Hatton said.
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
