Hospital groups renew 340B fight with HHS lawsuit

Several hospital groups, including the American Hospital Association, refiled their lawsuit against the Department of Health and Human Services over cuts to the 340B drug discount program.

The American Hospital Association, America's Essential Hospitals, the Association of American Medical Colleges, Eastern Maine Healthcare Systems, Henry Ford Health System and Fletcher Hospital originally sued HHS in November after the Centers for Medicare & Medicaid Services issued a final rule that would slash payments to hospitals that participate in the 340B program.

The suit came after CMS changed 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. There was an immediate outcry to the policy from hospitals and providers enrolled in the program.

RELATED: Hospitals, pharmaceutical companies spar over cuts to 340B drug discount program

A federal judge dismissed the AHA's lawsuit at the beginning of January, but the groups filed an appeal (PDF) shortly thereafter. In July, an appeals court delayed a ruling on the merits of the case because no claims had been filed when the case was originally brought to prevent the rule from going to effect.

Since the hospital group has filed claims that have progressed through the appeals process to address the court's procedural concern, American Hospital Association officials said, they have refiled the suit asking for expedited relief (PDF).

RELATED: Hospital groups urge HRSA to institute 340B final rule

The drug discount program once enjoyed bipartisan support and has been expanded three times by Congress. But drug companies say it's grown too large and contributes to the rising cost of medication. Leaders of major health systems in both urban and rural settings have raised concerns over the serious risks they face if those savings sustain significant cuts.