Supreme Court Overturns 340B Reimbursement Cuts
On June 15, 2022, the U.S. Supreme Court ruled unanimously in American Hospital Association v. Becerra that the U.S. Department of Health & Human Services (HHS) wrongly lowered Medicare reimbursement rates for 340B outpatient drugs. This ruling reverses a federal appeals court’s 2020 ruling that allowed HHS to cut more than $1.6 billion in annual reimbursement.
HHS cut the reimbursement rate for covered outpatient drugs by 28.5% starting in 2018. Payment cuts from 2020 to the present are not impacted by this decision. CMS and the lower court must work through how the reimbursement will be distributed to affected hospitals.
The 340B program was established to ensure hospitals that service low-income communities can access outpatient drugs at discounted rates. The ruling is a win for 340B covered entities, but covered entities will need to continue to focus on the 2020–2022 reimbursement cuts as well as current manufacturer barriers to obtain 340B pricing for contract pharmacy arrangements.
Be on the lookout for FORsights pertaining to the ruling.
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