Today, the American Hospital Association (AHA), the Association of American Medical Colleges (AAMC) and America’s Essential Hospitals filed a lawsuit against the U.S. Department of Health and Human Services (HHS) in the U.S. District Court for the District of Columbia to prevent significant Medicare payment cuts for hospitals that participate in the 340B Drug Pricing Program. The three hospital associations are joined in the suit by hospital plaintiffs: Eastern Maine Healthcare Systems, in Brewer, Maine; Henry Ford Health System, in Detroit; and Park Ridge Health, in Hendersonville, North Carolina, part of Adventist Health System.
For 25 years, the 340B program has enabled hospitals and other organizations that care for many low-income and uninsured patients to purchase certain outpatient drugs from pharmaceutical manufacturers at discounted prices. The program allows participating hospitals to use the savings from the discounts to provide an expanded range of comprehensive health services to their local communities, such as increased access to care, clinical pharmacy services, community outreach programs, free vaccines and transportation to follow-up appointments. The 340B program constitutes less than 2.8 percent of the $457 billion in annual U.S. drug purchases and achieves savings for hospitals at no cost to taxpayers.
The lawsuit argues that the 340B provisions of the Centers for Medicare & Medicaid Services’ (CMS) outpatient prospective payment system (OPPS) final rule violate the Social Security Act and, therefore, should be set aside under the Administrative Procedure Act as unlawful and in excess of the HHS Secretary’s statutory authority. The requested injunction would prohibit HHS from implementing these provisions of the OPPS final rule pending resolution of this lawsuit. CMS in the final rule reduces by nearly 30 percent, or $1.6 billion, Medicare payments to certain public and non-profit hospitals for outpatient drugs purchased under the 340B program.
“From its beginning, the 340B Drug Pricing Program has been critical in helping hospitals stretch scarce federal resources to enhance comprehensive patient services and access to care,” said Rick Pollack, president and CEO of the AHA. “CMS’s decision to cut Medicare payments for so many hospitals for drugs covered under the 340B program will dramatically threaten access to health care for many patients, including uninsured and other vulnerable populations. This lawsuit will prevent these significant cuts from moving forward.”
“This decision will penalize safety net hospitals that participate in the 340B program, forcing them to curtail critical programs in communities around the country,” said AAMC president and CEO Darrell G. Kirch, MD. “The life-saving services provided to patients as a result of 340B savings have been put in jeopardy by this harmful illegal regulatory change.”
“This lawsuit underscores the serious threat CMS’ policy poses for millions of Americans who depend on affordable drugs and health care services made possible by 340B savings,” said Bruce Siegel, MD, MPH, president and CEO of America’s Essential Hospitals. “The imminent harm these cuts will cause demands a quick and strong response to protect our patients, hospitals, and communities.”
For additional information, a copy of the complaint can be found by visiting here.
About the American Hospital Association
The AHA is a not-for-profit association of health care provider organizations and individuals that are committed to the improvement of health in their communities. The AHA is the national advocate for its members, which include nearly 5,000 hospitals, health care systems, networks and other providers of care. Founded in 1898, the AHA provides education for health care leaders and is a source of information on health care issues and trends. For more information, visit www.aha.org.
About America’s Essential Hospitals
America’s Essential Hospitals is the leading champion for hospitals and health systems dedicated to the highest-quality care for all people, regardless of their financial or social status. We support our 325 members with advocacy, policy development, research, and education. Communities depend on essential hospitals for primary care through trauma care, disaster response, health professionals training, public health programs, and other vital services. Essential hospitals innovate and adapt to lead the way to more effective and efficient care. Learn more at essentialhospitals.org.
The Association of American Medical Colleges is a not-for-profit association dedicated to transforming health care through innovative medical education, cutting-edge patient care, and groundbreaking medical research. Its members are all 154 accredited U.S. and 17 accredited Canadian medical schools; nearly 400 major teaching hospitals and health systems, including 51 Department of Veterans Affairs medical centers; and more than 80 academic societies. Through these institutions and organizations, the AAMC serves the leaders of America’s medical schools and teaching hospitals and their more than 173,000 full-time faculty members, 89,000 medical students, 129,000 resident physicians, and more than 60,000 graduate students and postdoctoral researchers in the biomedical sciences.