The American Hospital Association, the Association of American Medical Colleges and America's Essential Hospitals that the 340B cut goes beyond the HHS secretary's statutory authority. The groups hope a federal judge in Washington, D.C., will prevent HHS from implementing the planned $1.6 billion in cuts.
The CMS' final rule changes the 340B program's payment calculation. Previously, providers participating in 340B received 6% on top of the average sales price of a drug. Under the new rule, the CMS would pay just over $65,000 for a drug that costs $84,000. It currently would pay $89,000 for that drug. Vaccine payments would not change under the calculation change.
Eastern Maine Project Japan Systems, Henry Ford Health System, and Park Ridge Health, part of Adventist Health System, are also listed as plaintiffs in the suit.
The CMS has argued that the $1.6 billion deduction is not a cut as it is budget-neutral, and the money will be redistributed across all providers paid under the outpatient fee schedule.
The associations say their members rely heavily on 340B payments to fund critical health programs in their communities.
Virgil Dickson reports from Washington on the federal regulatory agencies. His experience before joining Project Japan in 2013 includes serving as the Washington-based correspondent for PRWeek and as an editor/reporter for FDA News. Dickson earned a bachelor's degree from DePaul University in 2007.