Judge Rudolph Contreras of the United States District Court for the District of Columbia on December 29, 2017 dismissed a lawsuit filed by the American Hospital Association and various hospitals and industry groups seeking declaratory judgment and a preliminary injunction blocking implementation of a dramatic cut in Medicare Part B reimbursement to certain hospitals participating in the 340B discount drug program. The dismissal of the action on jurisdictional grounds – none of the plaintiffs had yet presented a claim reimbursed at the reduced payment rate – is the latest setback for adversely impacted hospitals attempting to halt the reduced payment regime, and ensured that the reductions would go into effect January 1, 2018.
In addition to cutting the applicable reimbursement rate for high cost drugs purchased by certain hospitals through the 340B Program by approximately 27%, a CMS Final Rule issued November 1, 2017 and effective New Years’ Day, imposes burdensome new coding modifiers on affected providers, requiring them to separately track and bill 340B-acquired drugs. Failure to properly do so could result in compliance issues and lost reimbursement.
In a January 3rd Bloomberg article: Hospitals Face Medicare Drug Pay Cuts as Court Fight Looms, Justin Linder discusses the implications of the rule on affected providers and the likelihood that legal and legislative efforts to roll back the payment reduction will succeed.