Dec. 31, 2018
Dive Brief:
- U.S. District Court Judge Rudolph Contreras
has decided against the Trump
administration in its plan to cut 340B payments for
outpatient drugs that took effect in January 2018. Contreras said HHS
didn't have legal authority to reduce payments and sidestepped
Congressional authority.
- The American Hospital Association (AHA), America’s
Essential Hospitals (AEH) and the Association of American Medical Colleges
(AAMC) sued after HHS made the cuts. The groups said the government
"exceeded its statutory authority when it cut Medicare reimbursement
rates for certain outpatient pharmaceutical drugs by nearly 30%."
- The judge asked that the hospital groups and federal government
figure out an "appropriate remedy."
Dive Insight:
Division between hospitals, drugmakers and
policymakers over the 340B program, which allows participating hospitals
to get discounted rates on covered outpatient drugs for Medicare beneficiaries,
has flared all year.
Hospitals say the lower drug costs enable
them to provide care to lower-income patients.
However, in recent years, critics have
decried the program's exponential growth and lack of oversight. In
2017, covered entities purchased more than $19 billion in drugs — a 114% increase since
2014.
In March, Senate health committee
chairman Lamar Alexander, R-Tenn,
questioned how hospitals used the program's savings. A New England Journal of Medicine report
additionally said the 340B project "drives hospital/physician
consolidation while not expanding care to low-income populations or improving
their mortality rates."
There's also the issue of a billion-dollar
gap between what hospitals pay for 340B drugs and what Medicare reimburses. HHS
has tried to bridge the gap through the payment cuts, reducing
Medicare reimbursement rates in the 340B program from the average sales price
(ASP) plus 6% to ASP minus 22.5%.
When proposing the cut in 2017, HHS said
the lower payment would "make Medicare payment for separately payable
drugs more aligned with the resources expended by hospitals to acquire such
drugs while recognizing the intent of the 340B program to allow covered
entities, including eligible hospitals to stretch scarce resources while
continuing to provide access to care."
In response, more than 200 members of the
House of Representatives sent a letter in
2017 asking CMS to abandon the cuts.
Now, more than a year later, hospital
groups are celebrating the latest decision. In a joint statement on
Friday, the AHA, AEH and AAMC, called the decision "carefully
reasoned" that will allow hospitals "serve their vulnerable patients
and communities without being hampered by deep cuts."
Brian Siegel, president and CEO at AEH,
said in a statement, "Congress was crystal clear when it created the 340B
program to support the work of essential hospitals. Now our hospitals can
continue their great work caring for the most vulnerable as good stewards of
the program. This is a victory for law and common sense."
We
are thrilled with last night's decision on #340B !! Sanity
prevailed!!
This is the latest twist
in the 340B payment fight. In July, the U.S. Court of Appeals for the D.C.
Circuit rejected the AHA's lawsuit against HHS on the payment cuts. The lawsuit
was also earlier denied by Contreras because
the cuts hadn't yet taken effect. After the July decision, the AHA, AAMC and
AEH said they would "refile promptly in district court," which culminated
in the decision on Thursday.
https://www.healthcaredive.com/news/court-rejects-340b-payment-cuts-in-big-win-for-hospitals/545028/
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