Court Upholds Reimbursement Cut for 340B Drug Discount Program

On July 17, the U.S. Court of Appeals for the District of Columbia upheld the reimbursement cut that took effect on Jan. 1 for drugs purchased under the 340B Drug Discount Program reimbursed under the Medicare hospital Outpatient Prospective Payment System (OPPS). As such, 340Bcovered entity hospitals must continue to absorb a 28.5 percent cut under OPPS. However, the court did say it would consider the merits of the case in the future, so many hospitals are assessing the ruling’s financial impact and taking steps to preserve potential remedies if the cuts are ultimately overturned or reversed.

A final rule issued last year by the Centers for Medicare and Medicaid Services reduced reimbursement under OPPS for 340B drugs from the drug’s average sales price (ASP) plus 6 percent to the current rate of ASP minus 22.5 percent.