District court remands 340B repayment determination to HHS

Wednesday, January 25, 2023

District Court Judge Rudolph Contreras remanded remedy decisions to HHS for its underpayments related to the 340B drug pricing program. After experiencing several key wins throughout their long legal battle with HHS, the American Hospital Association (AHA) and other industry plaintiffs were disappointed by the January 10 ruling.

According to the AHA, this decision caused the repayments to be even further delayed. “We look forward to continuing to work with the Administration to develop a plan to swiftly repay 340B hospitals, with interest, while ensuring the remainder of the hospital field is not penalized,” said AHA General Counsel and Secretary Melinda Hatton in a press release.

CMS addressed 340B reimbursement in the 2023 Outpatient Prospective Payment System (OPPS) final rule. CMS restored 340B reimbursement to the pre-2018 method of average sales price +6%. However, to maintain budget neutrality for 2023, the agency implemented a 3.09% reduction to payment rates for non-drug services.

In addition, CMS said it intends to address payment cuts for 2018–2022 in separate forthcoming rulemaking before the 2024 OPPS proposed rule.

The long legal battle between HHS and hospital groups stems from the nearly 30% cut to hospital reimbursement under the 340B program in the 2018 OPPS final rule. The Supreme Court unanimously ruled that these reimbursement cuts were unlawful in June 2022. In September 2022, Contreras ruled in favor of the AHA and ordered HHS to stop its reimbursement cuts to the program for the remainder of 2022.

Revenue integrity professionals should review the 2023 OPPS final rule to ensure their organization understands how these changes to reimbursement will affect their organizations throughout the year. Keep an eye out for future guidance on the 340B program or any reimbursement updates.

Editor’s note: See more NAHRI coverage of 340B reimbursement here.

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