The district court recently remanded remedy decisions to HHS for its underpayments related to the 340B drug pricing program.
After experiencing several key wins throughout their long legal battle with HHS, the American Hospital Association (AHA) and other industry plaintiffs were disappointed by the January ruling where a district court judged remanded HHS the question of how to repay 340B hospitals.
According to the AHA, this decision caused the repayments to be even further delayed—and a recent letter penned by the group outlines five ways the group says HHS can expediate the administrative process and avoid further legal challenges.
In the letter, the AHA calls for HHS to:
- Repay each 340B hospital the full amount that was unlawfully withheld between January 2018 and September 2022
- Repay each 340B hospital promptly
- Not impose a prospective remedy
- Pay hospitals interest on its underpayments until they are fully repaid
- Not recoup funds from the hospital field to achieve budget neutrality
"As the AHA has stated before, we are willing to work with HHS to assure a fair and equitable resolution of these issues, which have already taken far too long to resolve, at great cost to the entire hospital field," the AHA said.
"Working together, HHS and the AHA can develop a fair and administrable remedy that avoids further legal or administrative delay."
This is just the latest drama surrounding 340B payment cuts. The long legal battle between HHS and hospital groups stems from the nearly 30% cut to hospital reimbursement under the 340B program in 2018.
After a 2022 court ruling, CMS restored 340B reimbursement to the pre-2018 method of average sales price +6% for fiscal year 2023. However, to maintain budget neutrality for 2023, the agency implemented a 3.09% reduction to payment rates for non-drug services.
Robin Damschroder, the CFO for Henry Ford Health, previously shared with HealthLeaders the impact that these payments have on hospitals.
"Henry Ford Health system and a lot of folks rely on 340B discounts and other mechanisms like disproportionate share payments. We're a big teaching institution, so a lot of these special payments that we do in order to teach the healthcare leaders of the future or make sure that we can take care of vulnerable patients are extremely important," Damschroder said.
"So that is an area that we and others are actively—in our advocacy—ensuring that these programs stay intact or evolve to a place that enhances the programs for the people that were trying to care for," said Damschroder.
Revenue cycle leaders should have their teams stay up to date on these regulations to ensure their organization understands how these changes to reimbursement will affect their organizations throughout the year.
“As the AHA has stated before, we are willing to work with HHS to assure a fair and equitable resolution of these issues, which have already taken far too long to resolve, at great cost to the entire hospital field.”
Amanda Norris is the Associate Content Manager of Finance, Payer, Revenue Cycle, and Strategy for HealthLeaders.