chevron-down Created with Sketch Beta.
June 24, 2022

SCOTUS Rules Against HHS in 340B Case

In a unanimous opinion authored by Justice Brett Kavanaugh, SCOTUS found that HHS acted outside its statutory authority in cutting reimbursement rates for safety-net hospitals that participate in the 340B program without first surveying them on their costs. These cuts, which began in 2018, resulted in $1.6 billion in annual Medicare payment cuts to 340B hospitals. The 14-page opinion found that the “text and structure” of the Medicare statute do not permit HHS’s targeted reimbursement cuts for 340B hospitals. A separate provision of the statute would allow the agency to vary the rates it pays for outpatient drugs, but only if the agency first conducts a time-consuming survey of hospitals, which it did not do.

The material in all ABA publications is copyrighted and may be reprinted by permission only. Request reprint permission here.