AHA urges HHS to ensure hospitals quickly receive withheld 340B funds 

AHA last week asked the Department of Health and Human Services to ensure hospitals quickly receive the funding to which they are entitled under last week’s Supreme Court decision in American Hospital Association v. Becerra, without penalizing the rest of the hospital field. The court unanimously held that the prior Administration acted unlawfully when it severely reduced Medicare reimbursement rates for outpatient drugs provided by hospitals in the 340B program, but did not determine a remedy for the unlawful payment cuts. Instead, it remanded the case to the lower courts to address the proper remedy. 
 
“Given the vital role that 340B hospitals play in serving vulnerable communities, they should be repaid the funds that have been withheld from them without delay,” AHA wrote. “They also should be paid for all of the years (2018-2022) in which the Centers for Medicare & Medicaid Services (CMS) illegally cut reimbursement rates. We are concerned, however, that despite the Supreme Court’s conclusive decision, resolution of these issues could be bogged down in needless litigation, and that hospitals will not be appropriately compensated at a time when they are weathering significant financial challenges on many fronts.” 
 
Among other concerns, AHA urged HHS not to apply budget neutrality when determining the appropriate remedy. 
 
“As you know, that position would mean that some hospitals will be forced to pay back money spent years ago — including during the COVID-19 pandemic — because the federal government made a legal error,” the letter says. “Hospitals should not have to pay for the agency’s mistakes. Instead, this Administration should take the sensible (and legally correct) position that budget neutrality is not required when a court — here, all nine Justices of the Supreme Court — concludes the agency violated the law.”