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Judge Hears Arguments in the 340B Federal Lawsuit

December 21, 2017

Today, District Court Judge Rudolph Contreras heard arguments from both sides in the American Hospital Association's (AHA) lawsuit to prevent the Department of Health and Human Services (HHS) from reducing Medicare payments for drugs acquired under the 340B program by nearly 30 percent, effective January 1, 2018.

Judge Contreras said he would rule on the motion for a preliminary injunction to prevent the cuts from taking effect before January 1. He actively questioned both sides about technical legal issues and about the Congressional intent behind the 340B program. Both sides also were asked about whether the HHS secretary had sufficient authority to make the nearly 30 percent cuts to Medicare payments to offset savings from the 340B program for the affected hospitals.

There was discussion about the harm that would befall hospitals if the rule were permitted to go into effect as scheduled, and suggestions that it might be preferable to prevent the rule from taking effect rather than undoing it at a later date.  

HAP joined 31 state and regional hospital associations in filing an amicus brief in support of the AHA lawsuit, and continues to keep members updated about this priority issue. For additional information or questions, please contact Jolene Calla, HAP’s vice president, health care finance and insurance, or Laura Stevens Kent, HAP’s vice president of federal advocacy.

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