Supreme Court rejects 340B pay cut to hospitals

The Supreme Court unanimously ruled that cuts to hospital reimbursement under the 340B drug discount program were unlawful.

In the June 15 ruling, the justices said that HHS’ failure to survey hospital costs before enacting the cuts exceed the agency’s authority under the Medicare statute, making the decision to reduce 340B reimbursement unlawful.

The ruling is the culmination of a court battle stretching back to 2017, when CMS finalized cuts to hospital reimbursement under the 340B program in the 2018 Outpatient Prospective Payment System (OPPS) final rule.

The plaintiffs, the American Hospital Association, the Association of American Medical Colleges, and American’s Essential Hospitals, released a joint statement praising the decision.

“[We] look forward to working with the administration and the courts to develop a plan to reimburse 340B hospitals affected by these unlawful cuts while ensuring the remainder of the hospital field is not disadvantaged as they also continue to serve their communities,” they said.

Revenue integrity professionals should monitor communications from CMS for updates on 340B reimbursement including potentially in the upcoming 2023 OPPS proposed rule. It may be prudent to begin collecting internal data on 340B claims to prepare for potential claims resubmission scenarios.

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