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'Unreviewable': HHS Asks D.C. Circuit to Curb Hospitals' 340B Suit

By Steven Porter  
   March 21, 2018

The judiciary has no authority to second-guess the OPPS rates HHS sets each year, according to the latest court filings in a suit that aims to halt planned cuts to the 340B Drug Pricing Program.

The federal government argued in a court filing this week that an appellate judge should dismiss a lawsuit brought by a long list of hospital organizations challenging a reduction in payments under the 340B Drug Pricing Program.

The plaintiffs—which include the American Hospital Association, the Association of American Medical Colleges, America’s Essential Hospitals, and others—argue that the program is needed to improve patient care. But the government argues the judiciary has no authority to review the Outpatient Prospective Payment System (OPPS) rates set each year by Health and Human Services (HHS).

That’s because Congress, in drafting the relevant statutes, intended “to confer unreviewable discretion on the [HHS] Secretary to make adjustments to the OPPS payment rates, including those for 340B drugs,” the Department of Justice argued on behalf of HHS.

The hospitals brought this appeal after a district court dismissed their complaint late last year.


Related: House Committee Recommends Fixes to 340B Drug Program


Any adjustments to OPPS rates must be budget neutral, the government argued, so if a judge orders HHS to forgo planned cuts to 340B, the ruling would require offsets elsewhere as well.

“If a court were to invalidate the adjustment at issue here, it would affect not only payment rates for 340B drugs, but also payment rates for services across the classification system,” the DOJ’s filing states.

The document—which says resetting 2018 OPPS rates would be like “unscrambling the egg”—is included here:

180321 HHS Court Documents 340B by HLMedit on Scribd

Steven Porter is editor at HealthLeaders.


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