A federal judge recently ruled that Medicare cuts to 340B hospital reimbursements in 2018 and 2019 were not lawful and must be reversed. The ruling also requires administration officials at the U.S. Department of Health and Human Services (HHS) to reimburse hospitals for the monies withheld.
U.S. District Judge Rudolph Contreras granted a permanent injunction against the Part B pay reductions of nearly 30% that Medicare imposed in early 2019. In late 2018, the same judge had determined that similar cuts imposed in 2018 were also in violation of federal law. HHS must give the judge a status report by Aug. 5, 2019, detailing how it will implement its remedy.
This ruling comes at a critical time for many struggling hospitals in rural and low-income locations.
“This is a positive ruling for 340B covered entities that will help them maintain and extend services to the communities they serve,” said Dana Fox, quality and performance improvement manager for CompleteRx. “There are still other state-proposed regulations and programs that could impact the covered entities that need to be monitored but this is still good news.”
The American Hospital Association, Association of American Medical Colleges, America’s Essential Hospitals, and three hospitals led the lawsuit against the 340B cuts.
Hospitals should continue to submit bills to Medicare for any qualifying outpatient drugs with 340B billing modifiers until new rules are issued by HHS.
Read more about the 340B ruling and industry reactions here:
- 340B Health: Statement by 340b Health President and Ceo Maureen Testoni Regarding Court Ruling on Medicare Cuts to 340b Hospitals
- Modern Healthcare: Judge halts 340B Medicare rate cuts for hospitals
- Advisory Board: 340B cuts are illegal, judge rules. Is ‘havoc’ coming for hospitals?
- Becker’s Hospital Review: HHS exceeded authority in cutting hospitals’ drug payments, court rules