Skip to main content

AHA, 340B Health Applaud SCOTUS Decision to Hear Medicare Cuts Case

Analysis  |  By Jack O'Brien  
   July 02, 2021

The AHA applauded the Supreme Court's announcement in a statement released Friday morning.

The U.S. Supreme Court announced Friday morning that it would review a Court of Appeals ruling that upheld cuts to the 340B Discount Drug Program by the Centers for Medicare & Medicaid Services (CMS).

The Supreme Court granted certiorari in American Hospital Association v. Becerra, a case that asks the Court to consider CMS payment cuts for prescription drugs acquired by hospitals through the program. 

In its 2018 Outpatient Prospective Payment System (OPPS) final rule, CMS reduced the reimbursement rate at the average sales price (ASP) from plus 6% to minus 22.5%.

AHA filed a lawsuit that CMS lacked statutory authority to reduce the reimbursement rate, which a federal judge agreed with in a December 2018 ruling.

However, a three-judge panel at the U.S. Court of Appeals overturned the lower court ruling in July 2020 and a full-court declined to reconsider the panel ruling in October 2020

Related: Federal Judge Nixes Hospitals' Attempt to Force HHS 340B Crackdown

In addition to the question presented by the AHA's petition, the court stated that both parties are direct to argue whether the petitioners' suit challenging HHS' adjustments is precluded by 42 U. S. C. §1395l(t)(12). 

The AHA applauded the Supreme Court's announcement in a statement released Friday morning.

"We are pleased that the U.S. Supreme Court has agreed to hear the compelling arguments in our case on payments cuts to the 340B drug pricing program that are adversely impacting care to patients," Melinda Hatton, General Counsel at AHA, said in a statement. "We are hopeful that the Court will reject the appellate court decision deferring to the government’s interpretation of the law that clearly imperils the important services that the 340B program helps allow eligible hospitals and health systems to provide to vulnerable communities, many of which would otherwise be unavailable."

Related: Healthcare Stakeholders Applaud Becerra Confirmation

Similarly, 340B Health, an advocacy group for the federal program, released a statement praising the Court's decision to hear the case.

“We are pleased that the Supreme Court has agreed to review the appellate court decision, which we believe was legally flawed," Maureen Testoni, CEO of 340B Health, said in a statement. "We are hopeful that the justices will reverse the lower court decision that upheld these damaging cuts to many 340B hospitals treating patients with low incomes. In the meantime, we continue to urge the Biden administration to change this harmful policy by abandoning the payment cuts for 2022 and beyond.”

Related: CMS Final Rules Cut 340B, OPPS as Hospitals Carp

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

Get the latest on healthcare leadership in your inbox.