Court Supports HHS on 340B Cut

The federal government may institute a nearly 30 percent cut in payments to some hospitals for prescription drugs, a federal court has ruled.

The cut, to the 340B program, was first proposed in 2017 the Department of Health and Human Services but has been blocked by the courts ever since.  Last week, though, a federal appeals court paved the way for the reduction.

Hospitals that serve especially large numbers of low-income patients participate in the federal 340B prescription drug discount program, which gives them discounts on prescriptions they distribute to low-income outpatients.  Under the program, participating hospitals are then supposed to use the savings they derive from the discount to provide additional services to low-income residents of their communities.

Several hospital groups sued when HHS first proposed the cut, arguing that the agency was exceeding its authority.  In last week’s ruling the court concluded that

At a minimum, the statute does not clearly preclude HHS from adjusting the [340B] rate in a focused manner to address problems with reimbursement rates applicable only to certain types of hospitals.

The cut will cost participating hospitals approximately $1.6 billion, with HHS maintaining that this money will be distributed among other deserving providers.

Learn more about the court decision and its implications in this Fierce Healthcare article.

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