Judge allows 340B drug payment cuts for 2018 to proceed pending a final ruling

On December 29, 2017, a ruling by a US District Court Judge denied a preliminary injunction to the cuts to Medicare Part B reimbursement rates for 340B drugs pending a final legal decision in a suit filed by a group of about 30 affected hospitals and related associations. The plaintiffs initially filed suit on November 13, with an initial hearing held on December 21 in which the plaintiffs advocated for a preliminary injunction of the rule. In denying of the preliminary injunction, the rate cuts took effect on January 1, 2018.

The suit stems from a provision in the Medicare Outpatient Prospective Payment System (OPPS) final rule issued on November 1, 2017. In the final rule, the Centers for Medicare and Medicaid Service (CMS) announced that it would no longer reimburse certain 340B-purchased drugs at the standard Part B rate of Average Sales Price (ASP) plus 6 percent, instead paying a rate of ASP minus 22.5 percent.

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