Last week, an appeals court ruled that the HHS policy to cut Medicare outpatient drug payments by 28.5% at 340B hospitals is legal, overturning a lower court’s previous decision. The court’s opinion found that HHS acted within its statutory authority and does not have to reimburse hospitals at a much higher costs than it takes to acquire the drugs. These cuts were originally made in the CY 2018 Outpatient Payment System (OPPS) final rule. This same court of appeals recently upheld HHS’ site neutral payment policy for clinic visits; hospital plaintiffs are requesting a rehearing of this case.

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