CHA News

340B Case Remanded to HHS to Determine Underpayment Remedy

On Jan. 10, the U. S. District Court for the District of Columbia sent a case about 340B underpayments back to the Department of Health and Human Services (HHS). 

Hospitals had challenged the underpayments in American Hospital Association v. Becerra, arguing HHS improperly reduced the reimbursement rate it pays some hospitals for Medicare patients. The U.S. Supreme Court decided HHS did, in fact, violate its authority when lowering the reimbursement rates. 

The lawsuit sought a remedy for calendar years 2018 to 2022. Based on the Office of Management and Budget’s recently updated unified agenda, CHA anticipates that a proposed rule outlining a remedy will be issued this spring.  

Last year, the District Court ordered HHS to cease the 340B payment reduction for the remainder of 2022 (claims paid on or after Sept. 28). For claims paid prior to that date, hospitals will need to submit an adjustment request to Noridian for them to be paid at the correct rate of average sales price +6%.