Hospital Groups, Health Centers Sue HHS Over 340B Reimbursement Cuts

Three hospital groups filed their lawsuit against HHS over the projected $1.6 billion in cuts to the 340B drug discount program, claiming the department lacked the authority to make them.

The American Hospital Association, the Association of American Medical Colleges and America’s Essential Hospitals, as well as three hospital systems, argued the cuts will undermine the discount program. Detailed in a recent final rule, the cuts represent a reduction of nearly 30 percent in reimbursements.

The agency’s rationale for the rate change — from the average sales price plus 6 percent down to the ASP minus 22.5 percent — is that it reflects the discounted price the hospitals pay to obtain the drug from manufacturers. But the complaint argues the discount program authorizes HHS to base the rate on average sales price, not acquisition cost.