340B strategy has a “two-pronged” approach


On Monday, the American Hospital Association (AHA), along with five other Associations and hospitals filed a federal lawsuit in U.S. District Court for the District of Columbia in Washington, D.C. to prevent Health and Human Services (HHS) from implementing the planned $1.6 billion reduction in 340B payments.

The allegation is the 340B cut goes beyond the HHS secretary’s statutory authority in the OPPS rule violating the Social Security Act. The lawsuit also seeks an injunction preventing HHS from implementing the new payment rate until the lawsuit is resolved.  The government has 21 days to file a responsive pleading.

AHA was joined in the legal action by the Association of American Medical Colleges (AAMC) and America’s Essential Hospitals, alongside Eastern Maine Healthcare Systems in Brewer, Maine, Henry Ford Health System in Detroit, Michigan, and Park Ridge Health, a part of Adventist Health System in Hendersonville, North Carolina. The plaintiffs are represented by outside counsel Carlos T. Angulo, Alexandra W. Miller and Wen Shen in the Washington office of Zuckerman Spaeder.


AHA is expected to reengage the 228 U.S. House of Representatives who signed a bipartisan letter and those 57 U.S. Senators who signed a letter to Acting HHS Secretary Wright and Administrator Verma on October 6, to introduce a legislative proposal possibly later this week, to suspend the 340B cuts before years end.

AHA cautions it will be tough to get a legislative fix through both chambers before the cuts take effect but one possible avenue is to attach the 340B proposal to “must-pass” legislation, like the disaster relief package, funding for the Children’s Health Insurance Program (CHIP) and extenders or even tax reform, prior to year’s end.