Appeals Court Hears Oral Arguments in 340B Case

Oral arguments today in a federal appeals court case brought by the AHA, Association of American Medical Colleges, America’s Essential Hospitals and three hospital organizations to challenge a nearly 30% reduction to Medicare payments for 340B drugs focused on procedure issues. However, as evidenced by questions from the judges, the court seemed most interested in whether the Medicare statute expressly precludes judicial review of the Department of Health and Human Services’ actions. The attorney representing the government argued that the Congress clearly intended to preclude review, arguing that the specific section relied on to make the payment reduction was “mushed up together” in the section of the law that authorized preclusion. The attorney for the AHA and other plaintiffs argued forcefully that evidence of preclusion must be clear and convincing and that the preclusion provision identifies only specific statutory sections that are shielded from review, including sections added to law after the addition of the section at issue in the case. There also was discussion of whether plaintiffs had adequately presented their claims to the Centers for Medicare & Medicaid Services and whether CMS had the legal authority to reduce reimbursement to section 340B hospitals by almost 30% under the section of the statute establishing the reimbursement methodology for separately payable outpatient prospective payment system drugs. The AHA hopes for a ruling from the court sometime this summer. To listen to a recording of today’s oral arguments, click here.