Blog Post

340B Ruling: What’s Next?

Bg 340 B What Next Dec 2018 Web

AHA, AAMC, and Others Win Permanent Injunction on 340B Reimbursement Changes

On December 27, 2018, the United States District Court for the District of Columbia granted the plaintiffs, a group of nonprofit hospitals as well as the American Hospital Association (AHA), Association of American Medical Colleges (AAMC), and America’s Essential Hospitals, a permanent injunction on the 2018 Medicare reimbursement cuts related to 340B drugs. The court stated that Health and Human Services secretary Alex Azar did not have the statutory authority to make the 2018 rate reduction.

Last year, CMS reduced reimbursement for 340B outpatient drugs by almost 30%. In 2019, these cuts are planned to continue and to extend to off-campus outpatient departments. The court concluded that the secretary’s actions exceeded his statutory authority given the impact on potentially thousands of drugs and the significance of moving from ASP plus 6% to ASP minus 22.5%.

In addition, the court ordered a supplemental briefing in 30 days to determine a remedy for this ruling. It stated that the complexity of the reimbursement structure and the impact of budget neutrality on any rate changes required additional information on remedies from both parties. Those hospitals affected by these reimbursement rate changes will need to monitor the changes into the new year. The full brief can be viewed here: