AHA Court Filing Calls for Full Restoration of 340B Cuts > Hospital Association of Pennsylvania

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AHA Court Filing Calls for Full Restoration of 340B Cuts

February 04, 2019

In a court-ordered brief filed late last week, the American Hospital Association (AHA) and others demanded that hospitals that received payment cuts of almost 30 percent for their 340B prescription drug claims be “made whole.” 

As a result of the Centers for Medicare & Medicaid Services' 2018 outpatient prospective payment system (OPPS) rule, 340B payment reductions began on January 1, 2018, and have been affecting hospital reimbursement for 340B drug claims.

In late December 2018, the D.C. District Court blocked the 340B payment cut in a ruling on the lawsuit brought by the AHA, Association of American Medical Colleges, America's Essential Hospitals, and three hospitals against the U.S. Department of Health and Human Services (HHS). The court ordered both the hospitals and the government to submit briefs on the proposed remedy for hospitals that have received reduced 340B payments.

The hospital plaintiffs’ brief argues that hospitals should receive supplemental payments such that the total reimbursement for 340B claims equals the full amount as specified by the 2017 OPPS rule—before the payment cuts—plus interest.

The brief also maintains that this proposed remedy “is easy to implement, will not have disruptive consequences for the Medicare program, does not require a new rulemaking for 2018, and is comparable to actions that other courts and HHS have taken in the past to correct previous erroneous payments to Medicare providers.”

The 340B Drug Pricing Program has enabled Pennsylvania hospitals to care for low-income and uninsured patients by purchasing certain outpatient drugs from pharmaceutical manufacturers at discounted prices. Hospitals can then use the savings to provide an expanded range of comprehensive health services to their local communities, such as increased access to care, clinical pharmacy services, community outreach programs, free vaccines, and transportation to follow-up appointments. The intent behind the program is to allow hospitals to stretch scarce resources to better serve vulnerable patients and communities.

The program has been a particularly valuable tool as the price of prescription drugs places an increasing financial burden on patients and hospitals, as detailed in a recent report by the University of Chicago’s NORC, an independent research institution. 

HAP will keep Pennsylvania hospitals informed of developments as legal proceedings related to the 340B program move forward. HAP also will continue to share its work in partnership with the AHA and with Pennsylvania lawmakers to find policy solutions to address ever-increasing drug prices.

For additional information about the 340B program or the AHA litigation proceedings, contact Jolene Calla, Esquire, HAP’s vice president, health care finance and insurance. For information about advocacy related to the 340B program or policies designed to address the high cost of pharmaceuticals, contact Laura Stevens Kent, HAP’s vice president, federal advocacy.

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