Viewpoint: Hospitals shouldn't expect quick pay despite 340B win

Despite their U.S. Supreme Court win, 340B hospitals shouldn't expect to receive withheld program funds soon, McDermott Will & Emery partner Emily Cook said in a July 1 opinion piece for Bloomberg Law. 

The case centered around whether HHS has the authority to make cuts to the program under its  Medicare Outpatient Prospective Payment System (OPPS). Under the payment rule, HHS cut the reimbursement rate for covered drugs by 28.5 percent in 2018, but it later lowered the cut to 22.5 percent. The Supreme Court reversed a federal appeals court's 2020 ruling that HHS had the authority to make the $1.6 billion annual reimbursement cut.  

Ms. Cook is a practice area leader for the healthcare regulatory and compliance law firm, according to Bloomberg. She said developing and implementing a payment plan may be difficult. The funds were redistributed by increasing the payment rates for all other items and services paid under OPPS.

"Therefore, a remedy may involve recouping payments from all hospitals paid under OPPS and re-redistributing it back to the hospitals that were subject to the payment cuts," she said. 

When the federal appeals court originally reviewed possible remedies to address the past payment cuts in 2019, it likened the task to unscrambling an egg, she said. 

Ms. Cook said the Supreme Court's decision was a big win for 340B hospitals, but it will not result in any immediate changes to Medicare payments for 340B drugs, nor does it require that HHS restore the full payment rates for those drugs. 

The case heard by the court involved only payments for 2018 and 2019, she said. The opinion focused on a provision that requires HHS to conduct a survey of hospital acquisition costs before implementing a change in drug payment rates. HHS did not conduct a survey in either of those years. It also did not conduct a survey in 2020 but did in 2021 and 2022. 

"Therefore, while the reasoning in the opinion arguably extends to the payment cuts in 2020, it would not apply to the payment cuts in 2021 or 2022," she said. 

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