The Supreme Court hears the 340B case that may affect all hospitals

The Supreme Court will hear arguments in cases seeking to overturn reduce Join the 340B drug program next week, and the result may affect all providers, even those who cannot get discounted drugs.

Plaintiffs including the American Hospital Association and providers participating in the plan are asking the High Court to revoke almost 30% reduction In the 340B reimbursement, the Medicare and Medicaid Services Center was initiated during President Donald Trump’s administration and continued under the leadership of President Joe Biden. The oral debate is scheduled for November 30th.

The 37 state and regional hospital associations wrote: “If the final rules of CMS are allowed to be established, 340B providers will be forced to cancel or drastically reduce some of the key programs for the treatment of various diseases, from cancer to mental health disorders and opioid addiction. “In a briefing submitted to the court in September.

The impact of this decision may not be limited to 340B providers. Non-profit hospitals and rural providers benefit from higher payments provided by funds saved by reducing 340B payments. Children’s hospitals and rural providers participating in 340B are not subject to reduction. For-profit providers are not eligible for 340B.

“Non-340B hospitals bear the financial burden of the previous payment policy, despite serving uninsured or other disadvantaged patients similar to 340B hospitals, and are usually located in the same or demographically similar communities,” said the American Hospital Association on behalf of investors Lawyer-own health system, written in briefly Go to court this month. “Reversing the current payment policy will eliminate the $1.6 billion redistributed savings, punish non-340B hospitals, and restore the overpayment of 340B hospitals that were caused by the inefficiency of the previous payment policy,” the federation’s external legal counsel wrote.

Similarly, the Rural Hospital Alliance, made up of nearly 200 facilities in 33 states, wrote In a briefing submitted to the court this month, the higher compensation received by its members helps them continue to operate. The briefing stated: “The overthrow of the Minister’s power to finalize this rule, let alone undermine the implementation of the adjustments that took effect nearly four years ago, is extremely onerous, especially in the context of ongoing public health emergencies.”

340B program Allow non-profit hospitals and clinics to purchase heavily discounted outpatient drugs from manufacturers, and then charge higher dispensing prices from medical insurance and commercial payers. These “savings” are used to provide services to the community or to offset unpaid care and low reimbursements for public projects.

In 2018, the Trump administration reduced the cost of insured outpatient drugs paid to the 340B hospital to an average selling price of-22.5%, a significant drop from the previous average selling price of + 6%. Providers who did not participate in 340B will still be reimbursed for drug expenses according to the old formula.

For 340B providers, with the exception of some rural and safety net hospitals, this is equivalent to a 30% reduction, or a loss of $1.6 billion. These payments are redistributed in the form of a 3.2% increase in reimbursement to all providers who pay according to the medical insurance outpatient expected payment system.

AHA and other provider associations File a lawsuit In 2018, without collecting data from the hospital’s purchase cost survey, through modifying the reimbursement rate, it was argued that CMS was beyond the scope of medical insurance regulations. The plaintiff argued that the current law only allows HHS to make minor adjustments.

“No hidden purpose [the law] AHA’s lawyers wrote in a briefing to the court last month that this may justify giving the agency the unfettered power to compensate 340B hospitals-only 340B hospitals-based on the acquisition cost.

The Justice Department, led by Trump and Biden, countered that HHS had sufficient legal authority and that the cost data cited by the plaintiff was unavailable when CMS wrote the regulation. The Ministry of Justice also argued that the law creating an outpatient payment system excludes judicial review, so the court can dismiss the case without ruling on the merits.

The Ministry of Justice wrote in a statement: “If the court finds the merits of the case, it should maintain interest rate adjustments.” briefly Submitted last month. “If HHS has specific survey data, or if such data is not available, based on average prices, HHS must set the reimbursement rate equal to the cost of drug acquisition… Undoubtedly, there is no survey data here.” The government argued that HHS “The reimbursement rate was calculated based on the average price and was’adjusted’ to reflect the substantial discounts received by the 340B hospital.”

The appeal court concluded last year that judicial review was not ruled out, but after a lower court ruled on the plaintiff in 2019, the court supported HHS in the case itself.

Andrew Ruskin, a partner at K&L Gates and a member of the Health Care and Food and Drug Administration, said a key question is how far institutions including the Department of Health and Human Services can go in interpreting vague regulations. And whether the court should respect the agency’s interpretation. Practice group.

Allison Hoffman, a professor at the Carey School of Law at the University of Pennsylvania, wrote that if the Supreme Court rules on hospitals, they may receive retroactive compensation to make up for the lower they received during the two-year period when the cut took effect. Payment. Blog Federal fund position.

Hoffman wrote that after the Federal District Court ruled against the plaintiff, HHS began collecting data needed to make changes to 340B. The department’s latest outpatient payment regulations indicate that HHS intends to maintain the 340B reduction without court intervention.

If the court upholds HHS and allows the appellate court’s ruling to be established, then the reduction will continue to exist, and more changes may occur in the future, which may occur in projects other than 340B.

When AHA expressed concern about this possibility Require The Supreme Court reviewed the decision of the Court of Appeal.

“It is crucial that this court does not allow the Court of Appeals to transfer power from national legislators to irresponsible executives,” the AHA briefing said. The association believes that in this case, allowing HHS to maintain the 340B reduction would be “a permit for institutions to achieve almost any policy goal they want.”

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