Hospitals refile lawsuit against CMS over $1.6B in 340B cuts

The American Hospital Association, along with several other national healthcare organizations and hospitals, refiled their lawsuit against HHS to reverse Medicare payment cuts for drugs purchased through CMS' 340B drug pricing program, the AHA announced Sept. 5.

Here are five things to know:

1. In November 2017, CMS issued a rule that allowed roughly $1.6 billion in cuts affecting the 340B Medicare drug discount program. The rule took effect in January.

2. Three hospital groups — the AHA, the Association of American Medical Colleges and America's Essential Hospitals — sued CMS in November 2017 to halt the cuts. A federal judge dismissed the lawsuit, but the groups appealed the suit in January. A July 17 ruling rejected the organizations' appeal, arguing that no claims had been filed when the case was originally brought to prevent the rule from going into effect.

3. The organizations have since filed claims that are progressing through the appeals process, satisfying the July 17 ruling.

"We look forward to receiving a prompt resolution on the merits of our case. For over 25 years 340B program drug discounts have played a critical role in helping hospitals expand access to care for vulnerable patients and communities at no cost to the federal government," the organizations said Sept. 5.

4. The hospital groups' original lawsuit argued the $1.6 billion in cuts to the 340B program violated the law and should therefore be set aside under the Administrative Procedure Act as unlawful. An AHA analysis released earlier this year showed 340B tax-exempt hospitals provided more than $50 billion in total benefits to their communities in 2015 alone, the most recent year for which data is available.

5. Along with the three healthcare organizations, Brewer-based Eastern Maine Healthcare Systems, Detroit-based Henry Ford Health System and Hendersonville, N.C.-based Park Ridge Health — part of Altamonte Springs, Fla.-based Adventist Health System — are also listed as plaintiffs in the case.

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