Cuts to 340B payments are legal, appeals court rules

The appellate court has actually reversed the choice, arguing that HHS lower drug compensation rate “rests on an affordable interpretation of the Medicare statute.”.

The American Hospital Association, Association of American Medical Colleges and Americas Essential Hospitals in December 2018 took legal action against to stop the cuts, arguing that HHS exceeded its federal authority to adjust the payment rates..

Under the 340B program, eligible medical facilities can purchase outpatient drugs at a discount rate. A medical facility usually pays 20 percent to half below the typical list prices for the drugs..

Alia Paavola –
Friday, July 31st, 2020

In spite of the lower courts decision HHS consisted of cuts to the 340B program in both its 2019 and 2020 healthcare facility payment rule..

In 2018, under its proposed Medicare Outpatient Prospective Payment System, HHS cut the reimbursement rate for covered drugs by 28.5 percent, however it later on lowered the repayment rate cut to 22.5 percent.
HHS stated it cut the rate for 340B hospitals to close a payment gap in between 340B and Medicare Part B, which compensates providers for drugs administered by providers in outpatient settings. HHS argued that Medicare must not repay health centers more than they paid to acquire the drugs.

An HHS policy that will cut Medicare outpatient drug payments by nearly 30 percent at 340B medical facilities in the U.S. is legal, an appellate court panel ruled July 31. The ruling overturns a lower court decision..

A lower court concurred with the hospital associations in December 2018, concurring that HHS violated its authority. HHS appealed the lower court decision in July 2019..

340B groups, including advocacy group 340BHealth, expressed frustration with the appellates courts decision..

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” These cuts of almost 30% have actually triggered genuine and lasting pain to safety-net health centers and the patients they serve,” stated Maureen Testoni, the president and CEO of 340B Health. “Keeping these cuts in location will only deepen the damage of forced cutbacks in patient services and cancellations of organized care growths.”.

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