District court remands case to HHS to determine remedy for 340B underpayments

The U.S. District Court for the District of Columbia today decided to allow the Department of Health and Human Services to propose an appropriate remedy for its past underpayments to hospitals participating in the 340B drug pricing program. After AHA’s unanimous victory in the U.S. Supreme Court last summer, the D.C. court ordered HHS to halt its unlawful 340B cuts for the remainder of 2022. In the outpatient prospective payment system final rule for calendar year 2023, the agency said it would defer any proposal of a remedy for CYs 2018-2021 until sometime before its CY 2024 payment rule, and in subsequent legal filings, the agency stated that it intends to announce a final remedy before the 2024 OPPS rulemaking cycle is complete next fall.

In a statement shared with the media today, AHA General Counsel Melinda Hatton said, “For more than five years, the Department of Health and Human Services has unlawfully withheld vital funding from 340B hospitals that helps them provide a range of important benefits to their patients and communities. We are disappointed that the district court elected to extend this delay by remanding this case back to the department to determine the appropriate remedy. HHS recently indicated that it expects to propose a remedy by April, and like the district court said in its opinion, the AHA ‘expects that HHS will act promptly to remediate its underpayments.’ We look forward to continuing to work with the Administration to develop a plan to swiftly repay 340B hospitals, with interest, while ensuring the remainder of the hospital field is not penalized as they too continue to serve and care for their patients and communities.”