Judge hears arguments in 340B lawsuit; ruling expected by Jan. 1

District Court Judge Rudolph Contreras today heard arguments from both sides in the AHA's lawsuit to prevent the Department of Health and Human Services from reducing Medicare payments under the 340B drug savings program by nearly 30% effective Jan. 1. AHA is joined in the lawsuit by the Association of American Medical Colleges and America's Essential Hospitals, as well as Eastern Maine Healthcare Systems in Brewer, ME, Henry Ford Health System in Detroit and Adventist Health System's Park Ridge Health in Hendersonville, NC. The judge said he would rule on the preliminary injunction, which would prevent the cuts from taking effect, before Jan. 1. Judge Contreras actively questioned both sides during an extended oral argument that focused on a number of technical legal issues, as well as congressional intent behind the 340B program. He asked both sides pointed questions about whether the HHS secretary had sufficient authority to make the nearly 30% cuts to Medicare payments to offset savings from the 340B program for the affected hospitals. He also inquired about the harm that would befall hospitals if the rule were permitted to go into effect as scheduled and suggested it might be preferable to prevent the rule from taking effect rather than undoing it at a later date.