Supreme Court to hear cases on Medicare and 340B payments

Affordable Care Act survives Texas' Supreme Court challenge

The Supreme Court will take up three healthcare cases in the next term, including one involving Medicare payments to providers and cuts to the hospital discount drug program.

The justices agreed to hear an American Hospital Association lawsuit challenging HHS’ decision last year to cut reimbursement rates for certain outpatient drugs to hospitals participating in the 340B drug discount program.

Hospitals serving large numbers of low-income and uninsured patients can buy drugs from manufacturers at a discounted price under the 340B program. But in 2018, CMS reduced the rate at which 340B hospitals are reimbursed for buying those drugs. The AHA filed suit, arguing CMS didn’t have the authority to reduce those payments.

“We are pleased that the U.S. Supreme Court has agreed to hear the compelling arguments in our case on payments cuts to the 340B drug pricing program that are adversely impacting care to patients,” AHA general counsel Melinda Hatton said in a statement Friday.

The AHA appealed to the Supreme Court after a lower court sided with CMS last year.

“We are hopeful that the court will reject the appellate court decision deferring to the government’s interpretation of the law that clearly imperils the important services that the 340B program helps allow eligible hospitals and health systems to provide to vulnerable communities, many of which would otherwise be unavailable,” Hatton said.

Another case centers on a 2005 rule changing how Medicare disproportionate share hospital (DSH) payments are calculated. Hospitals serving a high number of low-income patients qualify for higher payments through the DSH adjustment. Empire Health Foundation in Washington state challenged the regulation after appealing the reimbursement it received from HHS in 2008. The formula, which considers the number of days a hospital treats Medicare Part A patients—even if Medicare never paid for those days—resulted in Empire getting lower DSH payments, the foundation argued. The ninth circuit court of appeals sided with Empire last year, but the Department of Justice asked the Supreme Court to hear the case.

The high court also will hear a case about state Medicaid programs clawing back medical expenses when patients reach settlements or awards in injury cases. In that case, the parents of a child who was hit by a truck while exiting a school bus sued Florida’s Medicaid program after it claimed a portion of a legal settlement the family won. The child’s parents were awarded $800,000, including $35,000 for medical expenses. But the state Medicaid program argued it was entitled to more than $35,000 since it paid much more than that for the patient’s care. An eleventh circuit judge sided with the state last year, and the plaintiffs appealed to the high court.

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Marie Maynes
Marie Maynes is a Sports enthusiast and writes for the Sports section of ANH.