U.S. SUPREME COURT STRIKES DOWN MEDICARE CUTS TO 340B HOSPITALS
WASHINGTON, D.C., JUNE 15, 2022— In a unanimous decision, the U.S. Supreme Court today said the nearly 30% cuts in Medicare outpatient drug payments to hospitals participating in the 340B drug pricing program that first took effect in 2018 were unlawful. The justices ruled that because the Department of Health and Human Services (HHS) did not first survey hospitals’ drug acquisition costs before imposing the cuts, it violated protections in the law against varying payment rates only for certain hospitals. The court overturned a lower court decision that was in favor of HHS on this issue and sent the case back to that court for further proceedings, though it does not weigh in on remedies for hospitals that have received the cuts.
The following statement is attributed to 340B Health President and CEO Maureen Testoni:
“This is an important victory for the 340B program. We applaud the U.S. Supreme Court for making the correct decision in striking down these Medicare cuts to payments for 340B drugs. Some safety-net hospitals have reported being forced to eliminate or scale back services to patients in need because of the reductions that have been in place since 2018. As Justice Kavanaugh wrote for the court, ‘340B hospitals perform valuable services for low-income and rural communities but have to rely on limited federal funding for support.’ We look forward to the next stage of the process involving remedies for hospitals that have been affected by these unlawful cuts. We also renew our call for the Centers for Medicare & Medicaid Services to abandon its policy of targeting 340B drugs for lower payment rates as it works to propose Medicare rates for 2023.”
Contact: Richard Sorian at richard.sorian@340bhealth.org or 202-536-2285.