Judge orders HHS to restore 340B drug payments after 6-year battle

A federal judge ruled Sept. 28 that HHS must immediately cover 340B hospitals' drug costs rather than waiting until 2023. The American Hospital Association and 340B organizations applauded the decision, which took "nearly six years," Maureen Testoni, 340B Health President and CEO, said. 

"This is an important victory for 340B hospitals," Ms. Testoni said in a statement. "The Centers for Medicare & Medicaid Services has the clear responsibility to restore the appropriate payments for 340B drugs immediately, and now a federal court has ordered it to do so without delay."

In June, the Supreme Court ruled in favor of hospitals part of the 340B program — which allows eligible hospitals to buy discounted outpatient drugs — and said HHS couldn't vary the program's reimbursement, which it did in 2018 by lowering it by 28.5 percent and then later to 22.5 percent. 

HHS said it would follow through on the order in 2023, but the latest ruling instructs the agency to immediately restore those cuts. In response to the Supreme Court ruling, the AHA urged the HHS to repay the cuts "without delay."

"HHS should not be allowed to continue its unlawful 340B reimbursements for the remainder of the year just because it promises to fix the problem later," federal judge Rudolph Contreras wrote in the most recent ruling. 

Becker's has reached out to HHS for comment and will update the story if the agency responds.

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