Federal appeals court rules against the American Hospital Association’s challenge to the $1.6 billion in Medicare 340B cuts

On July 17, 2017, the U.S. Court of Appeals for the District of Columbia Circuit ruled in favor of the Department of Health and Human Services (HHS), finding that the American Hospital Association’s (AHA) legal challenge of the regulations that would cut $1.6 billion from the 340B Drug Pricing Program was filed prematurely.

The Court found that the legal challenge was filed prematurely because “when this action was brought, no plaintiff had presented any concrete claim for reimbursement implicating the new regulation, which had not even become effective.” Accordingly, the appeals court found that it lacked subject matter jurisdiction over the case, “[b]ecause the plaintiffs failed to satisfy the presentment requirement of 42 U.S.C. § 405(g).” The AHA said that they would continue to fight the 340B reimbursement cuts and that they expect to refile in District Court soon.