The proposed rule by CMS is the remedy to payment rates the Supreme Court deemed unlawful.
CMS announced it will pay eligible hospitals $9 billion in a lump sum payment under a proposed remedy for the 340B payment rates—a decision hospital groups expressed satisfaction with.
The federal agency estimates that from 2018 through approximately the third quarter of 2022, certain 340B providers received $10.5 billion less in 340B drug payments than they would have without the policy.
In June 2022, the Supreme Court unanimously ruled against the 340B payment rates, considering them unlawful because HHS failed to conduct survey of hospitals' acquisition costs.
However, CMS stated that affected 340B providers have already received from Medicare and beneficiaries $1.5 billion of the $10.5 billion that would otherwise be owed. The remaining $9 billion for claims will go to 340B hospitals that were paid less due to the policy.
The American Hospital Association (AHA) said it was "extremely pleased" with the remedy.
Rick Pollack, AHA president and CEO, said in a statement: "We are especially gratified that HHS agreed with the AHA's position that these hospitals must be promptly repaid in full with a single lump-sum. At the same time, the AHA is disappointed that HHS has chosen to recoup funds from other hospitals that cannot afford additional Medicare payment cuts, including rural sole community, cancer and children’s hospitals that were initially exempted from HHS' illegal policy. We will continue to review the proposal closely and look forward to providing comments."
Meanwhile, America's Essential Hospitals also voiced their satisfaction with the proposal, but took issue with the budget neutrality portion of the rule.
Bruce Siegel, president and CEO of America's Essential Hospitals, said in a statement: "Essential hospitals still face heavy financial pressures from high labor costs and other challenges from the pandemic, and these payments are urgently needed to help these hospitals meet the needs of their patients and communities. We urge the Centers for Medicare & Medicaid Services to expedite the release of the reimbursements.
"We are disappointed the remedy payments would include no interest and be budget neutral. The administration’s plan to cut non–drug payments to hospitals to achieve budget neutrality unnecessarily blunts the impact of the remedy by ensuring years of future underpayments."
Jay Asser is the CEO editor for HealthLeaders.