March 12, 2018—A federal appeals court will hear oral arguments on May 4 from hospital groups and health systems that are suing to reverse a nearly 30 percent cut in Medicare drug payment rates for certain 340B hospitals that took effect Jan. 1.
In advance of the court hearing date, the U.S. Court of Appeals for the District of Columbia Circuit has asked the U.S. Department of Health and Human Services to submit its written arguments by March 19, and the hospitals will submit written counterarguments by April 2. The American Hospital Association, the Association of American Medical Colleges, and America’s Essential Hospitals have joined three regional health systems in pursuing the lawsuit, which states that the Medicare rate cut was improper and is causing “irreparable harm” to the affected 340B disproportionate share hospitals and rural referral centers.
A lower court late in 2017 had dismissed the lawsuit based not on the merits of the case but on the procedural grounds that the hospitals could not show that they had suffered harm from a Medicare pay cut that had not yet taken effect. The appeals court on Jan. 30 granted the hospitals’ motion to expedite consideration of the lawsuit. An amicus brief filed in February by 35 state and regional hospital associations in support of the hospital plaintiffs gave numerous specific examples of how the roughly $1.6 billion Medicare drug pay cut would hurt 340B hospitals and the low-income patients that they treat.
Separate from the court case, pending bipartisan legislation in the U.S. House to reverse the cuts authored by Rep. David McKinley (R-W.Va.) had 189 cosponsors as of March 12.