Hospital groups vow to continue legal fight after losing challenge to 340B payment cuts

Legal Review
Groups including the American Hospital Association were part of an effort to fight 340B payment cuts pushed by the Trump administration. They said they plan to continue their legal challenge. (iStock-BrianAJackson)

Several hospital and healthcare industry groups vowed to continue their legal challenge to 340B cuts pushed by the Trump administration after a court ruled against their appeal.

“We are deeply disappointed that the courts have once again failed to rule on the merits of our case," the American Hospital Association (AHA), the Association of American Medical Colleges (AAMC), and America’s Essential Hospitals said in a statement.

On Tuesday, the U.S. Court of Appeals for the District of Columbia struck down their appeal after a lower court dismissed their lawsuit earlier this year.

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At issue was a change by CMS to the program's payment rate from up to 6% more than the average price of drugs to 22.5% less than the average price, which cuts $1.6 billion in 340B payments. The final rule was supported by the drug industry.

RELATED: Court grants hospital groups' request for expedited brief in 340B case appeal

CMS Administrator Seema Verma praised the court decision. "The court’s ruling is a big win for patients, who this year alone are expected to save $320 million in out-of-pocket expenses for medicines in their doctors’ offices," she said in a statement. "This policy is providing relief every day from the rising costs of drugs, a top priority for President Trump.”

But the healthcare groups, as well as Eastern Maine Healthcare Systems, Henry Ford Health System and Fletcher Hospital, sued HHS last November over the cuts. A federal judge dismissed the AHA's lawsuit at the beginning of January, but the groups filed an appeal (PDF) shortly thereafter.