Resources

Client Alerts, News Articles, Blog Posts, & Multimedia

Everything you need to know about BMD and the industry.

A Win for the Hospitals: An Update on the Latest 340B Lawsuit

Client Alert

The Ruling at a Glance

On Wednesday, the Supreme Court unanimously rejected massive payment cuts to hospitals under the 340B drug discount program. Now, the Department of Health and Human Services (HHS) no longer has the discretion to change 340B reimbursement rates without gathering data on what hospitals actually pay for outpatient drugs. This “straightforward” ruling was based on the text and structure of the statute, per the Supreme Court. Simply put, because HHS did not conduct a survey of hospitals’ acquisition costs, HHS acted unlawfully by reducing the reimbursement rates for 340B hospitals.

The History of this Healthcare Battle

Beginning in 2018, HHS began reducing reimbursement rates for hospitals in the 340B program by roughly 30% and paying higher rates to hospitals not under the program. The American Hospital Association (AHA) and other provider groups argued that these cuts were illegal because the hospitals involved were never surveyed to determine their average drug acquisition costs. The agency instead used the “average price” method, which is also approved by Medicare to determine reimbursement for hospital-purchased drugs. HHS countered that courts do not have jurisdiction to review 340B payment policies.

Initially, the American Hospital Association won in federal district court. However, the U.S. Court of Appeals for the District of Columbia Circuit reversed that decision in 2020. Wednesday’s opinion reversed course again, finding that the U.S. Court of Appeals for the District of Columbia Circuit erred when it allowed HHS to reduce yearly Medicare payments by $1.6 billion for outpatient drugs that aided in subsidizing hospitals that cater to poor and uninsured patients.

HHS previously argued that in designing the 340B program, Congress would not have intended for the agency to "overpay" hospitals for 340B drugs. However, the Supreme Court disagreed, asserting that legislators would have been "well aware" that 340B hospitals paid less for prescription drugs. According to the Court, even if the reimbursement payments were intended to offset the considerable costs of providing healthcare to the uninsured and underinsured in low-income and rural communities, the Court is not the correct forum to resolve policy debates.                                                                                                                                                                         

The Hospital Community’s Response

After this pro-hospital ruling, the AHA, AAMC (American Association of Medical Colleges) and America's Essential Hospitals called it "a decisive victory for vulnerable communities and the hospitals on which so many patients depend." In their shared statement, the organizations declared that “340B discounts help hospitals devote more resources to services and programs for vulnerable communities and increase access to prescription drugs for low-income patients.”

Now, the legal landscape regarding 340B programs is even more complex. More litigation is pending as the Biden Administration’s 340B regulations have spurred conflict with pharmaceutical companies nationwide.

If you have any questions about this Supreme Court decision or the 340B program in general, please contact BMD Healthcare and Hospital Law Member – Jeana Singleton at jmsingleton@bmdllc.com, or 330.253.2001.


“In for a Penny, in for a Pound” is No Longer the Case for Florida Lawyers

On April 1, 2024, newly adopted Rule 1.041 to the Florida Rules of Civil Procedures goes into effect which creates a procedure for an attorney to appear in a limited manner in civil proceedings.  Currently, when a Florida attorney appears in a civil proceeding, he or she is reasonable for handling all aspects of the case for their client.  This new rule authorizes an attorney to file a notice limiting the attorney’s appearance to particular proceedings or specified matters prior to any appearance before the court.  For example, an attorney can now appear for the limited purpose of filing and arguing a motion to dismiss.  Once the motion to dismiss is heard by the court, the attorney may file a notice of termination of limited appearance and will have no further obligations in the case.

Enhancing Privacy Protections for Substance Use Disorder Patient Records

On February 8, 2024, the U.S. Department of Health and Human Services (“HHS”) finalized updated rules to 42 CFR Part 2 (“Part 2”) for the protection of Substance Use Disorder (“SUD”) patient records. The updated rules reflect the requirement that the Part 2 rules be more closely aligned with the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) privacy, breach notification, and enforcement rules as mandated by the Coronavirus Aid, Relief, and Economic Security Act of 2020.

Columbus, Ohio Ordinance Prohibits Employers from Inquiries into an Applicant’s Salary History

Effective March 1, 2024, Columbus employers are prohibited from inquiring into an applicant’s salary history. Specifically, the ordinance provides that it is an unlawful discriminatory practice to:

The Ohio Chemical Dependency Professionals Board’s Latest Batch of Rules: What Providers Should Know

The Ohio Chemical Dependency Professionals Board has introduced new rules and amendments, covering various aspects such as CDCA certificate requirements, expanded services for LCDCs and CDCAs, remote supervision, and reciprocity application requirements. Notable changes include revised criteria for obtaining a CDCA certification, expanded services for LCDCs and CDCAs, and updated ethical obligations for licensees and certificate holders, including non-discrimination, confidentiality, and anti-sexual harassment measures.

Governor Mike DeWine and The Ohio State University Introduce the SOAR Study on Ohio Mental Illness

On January 19, Ohio Gov. Mike DeWine and The Ohio State University announced a new research initiative, the State of Ohio Adversity and Resilience (“SOAR”) study, which will investigate all factors influencing Ohio’s mental illness and addiction epidemic.