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Supreme Court To Review Association’s Lawsuit on OPPS Cuts

The U.S. Supreme Court agreed to review a case filed by America’s Essential Hospitals and other plaintiffs challenging payment cuts to hospitals in the 340B Drug Pricing Program.

In late 2017, America’s Essential Hospitals, the American Hospital Association, the Association of American Medical Colleges, and three individual hospital plaintiffs, including association member Henry Ford Health System, filed the lawsuit in the U.S. District Court for the District of Columbia. Specifically, the legal challenge questions the Centers for Medicare & Medicaid Services’ (CMS’) authority to reduce by nearly 30 percent Medicare Part B payment rates to 340B hospitals under the Outpatient Prospective Payment System (OPPS); the policy has been in place since 2018. After a district court decision found the cuts unlawful, the Trump administration appealed the case, and the court of appeals ruled in favor of the administration. In response, the association and the other plaintiffs asked the Supreme Court to review the case.

The Supreme Court’s decision to review the case marks a significant step in the association’s efforts to overturn the harmful cuts. The Supreme Court will hear oral arguments in the case in its next term, which begins in October, with a decision likely in 2022.

In its order stating it will review the case, the Supreme Court noted it will determine both the lawfulness of the policy, as well as whether the Medicare statute allows such legal challenges of CMS reimbursement decisions. Separately, CMS soon will issue OPPS rulemaking for calendar year 2022, determining whether the Biden administration will continue these cuts.

Contact Senior Director of Policy Erin O’Malley at or 202.585.0127 with questions.


About the Author

Shahid Zaman is a senior policy analyst at America's Essential Hospitals.

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