Hospitals denied full court review in lawsuit over 340B cuts

Hospitals suing HHS over a policy that will cut Medicare outpatient drug payments by nearly 30 percent at 340B hospitals failed to persuade a full appeals court to rehear the case, according to court documents published by Bloomberg Law

The U.S. Court of Appeals for the District of Columbia Circuit denied the hospitals’ motion for en banc, or full court, review Oct. 16. 

A three-judge panel for the appeals court ruled in July that cuts to the payment rate for drugs purchased under the 340B program are legal. The judges said that the lower HHS drug reimbursement rate “rests on a reasonable interpretation of the Medicare statute.”

The denied petition for a full court review means the three-judge panel’s decision is upheld. 

In 2018, under its proposed Medicare Outpatient Prospective Payment System, HHS cut the reimbursement rate for 340B drugs by nearly 30 percent.

The American Hospital Association, Association of American Medical Colleges and America’s Essential Hospitals in December 2018 sued to stop the cuts, arguing that HHS exceeded its federal authority to adjust the payment rates.   

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