By Paige Minemyer – Jun 15, 2022
The Supreme Court on Wednesday unanimously rejected massive payment cuts to hospitals under the contentious 340B drug discount program.
In the ruling (PDF), the justices noted that the Department of Health and Human Services did not survey hospital costs before adjusting payments for 340B in a 2018 rule, which cut payments to hospitals in the program by nearly 30%.
The agency repeated that approach in 2019 rulemaking, and attorneys for HHS argued before the court that the surveys were not required. SCOTUS disagreed.
“The text and structure of the statute make this a straightforward case,” the opinion says. “Because HHS did not conduct a survey of hospitals’ acquisition costs, HHS acted unlawfully by reducing the reimbursement rates for 340B hospitals.”
The American Hospital Association sued to challenge the payment cuts, and a federal district court sided with them and struck down the rule. However, an appeals court later reversed the decision, leading to the SCOTUS showdown.