Today, a federal court upheld the Medicare Part B payment cut for 340B drugs administered at certain hospitals.  As a result of the court’s decision, hospitals that wish to challenge the payment cuts will need to go through the administrative claims appeal process, which could take several years.

CMS finalized the nearly 30 percent payment cut at the end of last year with an effective date of January 1, 2018.  Hospitals and industry groups sued CMS, arguing that the agency did not have the authority under the Medicare statute to make the reduction.  The hospitals lost in the first round of litigation on jurisdictional grounds. 

On appeal, the federal court affirmed the lower court’s ruling and held that it did not have jurisdiction to review the hospitals’ case.  The court determined that the hospitals must challenge the reimbursement cut through CMS’ claims appeal process by challenging the payment of a specific claim.  The court did not reach the question of whether CMS has authority to implement the reimbursement reduction.

Reps. David McKinley (R-WV) and Mike Thompson (D-CA) have introduced legislation in the House to repeal the Medicare Part B payment reduction for 340B drugs.  The bill has almost 200 cosponsors.  RWC-340B has opposed the payment cut on the grounds that it sets a dangerous precedent for discriminatory reimbursement of 340B drugs.