Appeals court declines to rehear 340B, site-neutral cases

The full U.S. Court of Appeals for the District of Columbia Circuit Oct. 16 denied AHA’s request to reconsider two decisions from this summer that upheld the Centers for Medicare & Medicaid Services’ cuts to payments for 340B drugs and for off-campus hospital outpatient clinic visits.

The full U.S. Court of Appeals declined to reconsider a July 31 decision by a three-judge panel that upheld the authority of CMS to lower by nearly 30% 2018 and 2019 Medicare outpatient prospective payment system drug payments for certain hospitals participating in the 340B Drug Pricing Program.

A district court had previously ruled in AHA’s favor, finding that the payment reductions were invalid. In addition, the court said it will not rehear a July 17 decision by a three-judge panel that upheld the authority of the Department of Health and Human Services to reduce payments for hospital outpatient services furnished in off-campus provider-based departments grandfathered under the Bipartisan Budget Act of 2015. A lower court twice found that HHS exceeded its statutory authority when it reduced these payments.

The AHA said it is deeply disappointed in the court’s decisions in both of these cases, which conflict with Congress’ clear intent and defer to the government’s inaccurate interpretation of the law. The association is evaluating all of its options to repeal these unlawful cuts, including petitioning the Supreme Court to hear the cases.