HHS ordered to restore 340B reimbursement rate for 2022

Wednesday, October 5, 2022

A federal judge ruled in favor of the American Hospital Association (AHA) and other industry plaintiffs on September 28, ordering HHS to stop its reimbursement cuts to the 340B Drug Pricing Program for the remainder of the year.

Following a unanimous Supreme Court decision that cuts to the program were implemented unlawfully, HHS agreed to restore the previous reimbursement rate in 2023. The Supreme Court handed the case down to the lower courts for remedy decisions, and U.S. District Court Judge Rudolph Contreras ruled HHS must also pay the previous reimbursement rate for the rest of 2022.

"HHS should not be allowed to continue its unlawful 340B reimbursements for the remainder of the year just because it promises to fix the problem later," wrote Contreras.

Prior to Contreras’ ruling, HHS reimbursed hospitals for drugs purchased through the 340B program using the 2022 rate of average sales price (ASP) minus 22.5%. As a result of the ruling, these drugs will now be reimbursed at the previous rate of ASP plus 6%.

“The court finds that any disruption that will be caused by vacating the prospective portion of the 2022 [Outpatient Prospective Payment System] OPPS rule's 340B reimbursement rate does not rise to the level of justifying remand without vacatur,” wrote Contreras.

In addition to the motion addressed in this ruling, the AHA and other industry plaintiffs filed a motion to “remedy all of HHS’ underpayments to 340B hospitals under the unlawful reimbursement rates in OPPS rules 2018–2022,” wrote Contreras. The second motion will be resolved in a separate opinion at a later date.

“We continue to urge the administration to promptly reimburse all the hospitals that were affected by these unlawful cuts in previous years and to ensure the remainder of the hospital field is not penalized for their prior unlawful policy,” said AHA General Counsel and Secretary Melinda Hatton in a press release.

Revenue integrity professionals should monitor communications from CMS on 340B reimbursement and the 2023 OPPS final rule. The 2023 OPPS final rule is anticipated for release in early November.

Update: In a filing released September 30, HHS said it will adjust the reimbursement rate within the next two weeks.

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