SCOTUS Sides with 340B Hospitals and Denies CMS’s Attempt to Cut Reimbursement for 340B Drugs

Yesterday, america Supreme Courtroom handed down a extremely anticipated, unanimous opinion, AHA v. Becerra, confirming that CMS exceeded its statutory authority when it applied a discriminatory reimbursement construction in 2018 and 2019 that resulted in sure 340B hospitals receiving decrease Half B drug reimbursement than non-340B hospitals. The opinion is welcome information for 340B hospitals that proceed to face monetary pressures associated to the 340B Program and contract pharmacies. Now, CMS and probably the decrease court docket should kind by tough issues involving cost of damages for 2018 and 2019 underpaid claims, however the opinion does affirm that CMS should function inside a selected set of parameters if it intends to setup up a Half B cost construction that varies by hospital group. Specifically, CMS could solely differ Half B reimbursement by hospital group if it conducts a statistically legitimate survey pursuant to 42 U.S.C. § 1395l(t)(14)(D). Absent survey information, CMS should reimburse all hospitals on the similar price.

Now we have already obtained a number of questions in regards to the instant and long-term impacts that the choice can have on reimbursement for 340B medicine. Whereas Polsinelli’s 340B workforce remains to be assessing these points in mild of yesterday’s opinion, the quick reply is nothing adjustments within the close to time period. Key points embrace how CMS will fund and pay underpaid claims to 340B hospitals for cost years 2018 and 2019, how will the Supreme Courtroom’s determination influence funds in 2020-2022, and how will CMS change its cost coverage on a go-forward foundation, if in any respect. There are a variety of sub-issues to assess inside these areas.

As we proceed to unpack the lengthy listing of authorized points, one key merchandise to watch carefully is CMS’s upcoming CY 2023 Outpatient Potential Cost System proposed rule (Proposed Rule). CMS’s cost coverage within the Proposed Rule might shed some mild into its strategy to not solely cost going ahead, but additionally into its strategy to remedying previous underpayments.  For instance, it’s doable that the Supreme Courtroom’s unanimous determination influences CMS to revisit its 340B drug cost coverage in its upcoming CY 2023 Outpatient Potential Cost System proposed rule (Proposed Rule) and reinstate its ASP plus 6% cost price. We consider that if CMS took this step, it might shed mild into CMS’s strategy to cost years 2021 and 2022 the place it relied, partially, on its flawed 2020 acquisition value survey to proceed its ASP minus 22.5% cost coverage. Alternatively, CMS could try to depend on acquisition value information obtained in its 2020 acquisition value survey to proceed its ASP minus 22.5%. If it does, we might anticipate litigation difficult the validity of the survey itself and any ensuing cost guidelines that change reimbursement by hospital group. When CMS carried out its survey, it didn’t search acquisition value information from non-340B hospitals, and the info assortment strategies offered challenges with reporting constant information.

SCOTUS’s opinion is a a lot wanted and clear win for 340B hospitals.  As we proceed to watch these developments unfold, we advocate that impacted 340B hospitals assess claims from 2018 and 2019 for individually payable, non-pass by Half B medicine that have been paid on the decrease ASP minus 22.5% price and calculate what total reimbursement ought to have been had the claims been paid at the usual ASP plus 6% price.  Impacted hospitals might have to conduct an analogous evaluate for 2020-present claims sooner or later. Once more, CMS’s upcoming Proposed Rule might reply a number of unanswered questions.

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