Federal Judge Blocks 340B Reimbursement Cuts

January 8, 2019

A federal court has issued an injunction against cuts to 340B payments introduced last January by the Centers for Medicare and Medicaid Services.

CMS cut the amount Medicare Part B reimburses hospitals for buying drugs through the 340B discount program, reducing payments to the average sales price minus 22.5 percent, as opposed to the previous formula of the average sales price plus 6 percent. 

The American Hospital Association, the Association of American Medical Colleges and America’s Essential Hospitals sued after the cuts were announced in 2017, arguing that the government was exceeding its statutory authority. But Judge Rudolph Contreras of the U.S. District Court for the District of Columbia denied the initial lawsuit because it was filed before the cuts actually went into effect. In a new ruling on Dec. 27, Contreras ruled in favor of a refiled complaint, imposing a permanent injunction against the cuts.

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