Judge blocks Trump administration policy cutting drug payments to hospitals

A federal judge blocked a Trump administration rule that reduces payments to hospitals under the 340B drug discount program, ruling Dec. 28 that the government overstepped its authority in its effort to address high prescription medication costs, according to STAT.

The decision by Judge Rudolph Contreras, a district court judge in Washington, D.C, is a win for the more than 2,000 hospitals that participate in the program, most of which treat high volumes of low-income patients.

In 2017, the HHS cut its reimbursements for some drugs by about 28 percentage points ($1.6 billion) beginning on Jan. 1, 2018.

The administration framed this 340B change as part of an attempt to lower prescription drug prices. The HHS said the reimbursement reductions were intended to make drugs less expensive for some Medicare patients, but hospital groups said cuts to the program would hinder their ability to care for low-income patients.

The groups have fought the policy in court since it was first announced, and lost a previous legal battle to block the policy over the summer.

However, in Judge Contreras' Dec. 28 ruling, he said while the HHS secretary does have the authority to make "adjustments" to the program, "he cannot fundamentally rework the statutory scheme," which is what he did in this case.

Although the judge said the change was in violation of the law, it is unclear what will happen as a result of the ruling.

The judge asked for more information on what should be done from the government and hospital groups that brought the lawsuit, which includes the American Hospital Association and the Association of American Medical Colleges.

"The court's carefully reasoned decision will allow hospitals and health systems in the 340B Drug Pricing Program to serve their vulnerable patients and communities without being hampered by deep cuts to the program," the AHA said in a statement.

The HHS did not immediately respond to STAT's request for comment.

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