About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (September 16, 2022)

handle is hein.crs/goveivh0001 and id is 1 raw text is: Congressional R .fesearch Service Supreme Court Overturns HHS Regulation Reducing the Medicare Outpatient Drug Reimbursement Rate for 340B Hospitals September 16, 2022 On June 15, 2022, the Supreme Court unanimously decided American Hospital Association (AHA) v. Becerra, holding that the Secretary of Health and Human Services (HHS) lacked discretion to cut Medicare's reimbursement to selected hospitals for certain outpatient drugs by 28.5%. As the Court indicated, the payment cut at issue implicated immense economic consequences of about $1.6 billion annually for these hospitals, which purchase such drugs at significantly discounted prices through what is known as the 340B Program. Beyond the significant financial stakes at issue for both the hospitals and the Medicare program, this case garnered attention because many commentators expected it to serve potentially as a vehicle for the Court to make changes to the scope of Chevron deference enjoyed by agencies. Ultimately, however, the Court concluded that HHS exceeded its discretion in reducing the reimbursement rate without directly addressing the Chevron doctrine. This Sidebar provides an overview of the 340B Program and the rate cut at issue, a summary of the Court's decision, and some considerations for Congress. Background Under the 340B Program, drug manufacturers agree, as a condition of having their drugs covered by Medicare, to provide substantial purchasing discounts to specified covered entities, which generally include nonprofit hospitals and other health care providers that care for underserved populations. Because the covered entities generally receive some form of federal financial assistance, Congress imposed the required drug discounts to enable such providers to stretch scarce Federal resources as far as possible. Separately, Medicare Part B reimburses hospitals for certain drugs (known as specified covered outpatient drugs or SCODs) using a specific statutory formula provided in 42 U.S.C. @ 13951(t)(14), which specifies two paths for determining these drug reimbursement rates. Under the first option, payment is equal to the average acquisition cost for a given year, as determined using hospital acquisition cost survey data. Alternatively, if hospital acquisition cost data are not available, payment for Congressional Research Service https://crsreports.congress.gov LSB10821 CRS Legal Sidebar Prepared for Members and Committees of Congress

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most