340B Lawsuit Not Premature, Hospital Groups Tell Appeals Court
NO. 18-5004; THE AMERICAN HOSPITAL ASSOCIATION, et al., Plaintiffs-Appellants, v. ALEX M. AZAR II, in his official capacity, et al., Defendants-Appellees, On Appeal from a Final Judgment of the U.S. District Court for the District of Columbia, (Honorable Rudolph Contreras)
Three hospital trade associations (the “Association Plaintiffs”)1 and three hospital systems (the “Hospital Plaintiffs”)2 (collectively, “Plaintiffs”) seek to enjoin a regulation issued in November 2017 by the Defendant Department of Health and Human Services (“HHS”). The regulation reduces by nearly 30% Medicare payments to certain public and non-profit hospitals for outpatient drugs purchased by those hospitals under section 340B of the Public Health Service Act (“the 340B Program”). The 340B Program helps hospitals and clinics that serve a disproportionate share of persons unable to pay their medical bills to provide critical healthcare programs and services to their communities, including underserved populations in those communities. The part of the regulation Plaintiffs challenge became effective on January 1, 2018, and unless enjoined will reduce reimbursements to 340B hospitals by $1.6 billion annually. The regulation is causing irreparable injury to the Hospital Plaintiffs by jeopardizing essential programs and services provided to their communities and the vulnerable, poor and other underserved populations, such as oncology, dialysis, and immediate stroke treatment services.