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Hospitals Sue HHS to Stop Cuts to Medicare Drug Payment Program

Hospitals and several of their trade organizations sued the U.S. Department of Health and Human Services to stop cuts to a Medicare program that lets facilities that serve low-income patients buy drugs at a discount and then get reimbursed at a higher rate.

Earlier this month, the government issued a final regulation saying it would cut payments to hospitals in the 340B program by 30 percent. The program has been criticized by drugmakers as being abused by hospitals, who in turn call it a crucial subsidy used to fund care for the poor.

The American Hospital Association, the Association of American Medical Colleges and America’s Essential Hospitals, as well as several individual health systems said the cuts violate the Social Security Act and should be deemed unlawful, according to a compliant filed Monday in U.S. District Court in Washington, D.C.

The Department of Health and Human Services didn’t immediately respond to a request for comment Monday night.

The department’s “decision to cut Medicare payments for so many hospitals for drugs covered under the 340B program will dramatically threaten access to health care for many patients, including uninsured and other vulnerable populations,” AHA Chief Executive Officer Rick Pollack said in a statement. “This lawsuit will prevent these significant cuts from moving forward.”

The payment reduction will go into effect at the beginning of 2018 for all hospitals participating in the program.

The case is American Hospital Association v. Hargan, U.S. District Court, District of Columbia (Washington).

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