May 7, 2018—Federal appeals court judges in Washington focused largely on procedural issues during a May 4 hearing over a nearly 30 percent cut in Medicare drug payments to certain 340B hospitals.
A lawsuit by hospital groups and health systems over the cut was the subject of oral arguments before a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit. During the arguments, the judges discussed whether federal law allows the cuts implemented by the U.S. Department of Health and Human Services (HHS) to be reviewed by the court.
The lawsuit under appeal was filed by the American Hospital Association, the Association of American Medical Colleges, and America’s Essential Hospitals, along with three regional health systems. They claim HHS improperly reduced Medicare rates to the facilities and that the 340B cuts are causing “irreparable harm” to affected disproportionate share hospitals and rural referral centers.
In addition to questioning attorneys representing HHS and the hospitals over the ability of the court to intervene in this case, the judges also discussed whether the department had the power to implement the cuts and whether the hospitals correctly pursued administrative appeals before turning to the court system.
A decision by the three-judge panel is expected sometime in the summer. Separate from the court case, pending bipartisan legislation in the U.S. House that would reverse the cuts has 196 cosponsors.
An audio recording of the court hearing is available online.