August 4, 2020

Around the nation: Federal appeals court panel upholds cuts to hospitals' 340B payments

Daily Briefing

    Chief Judge Sri Srinivasan of the U.S. Court of Appeals for the District of Columbia Circuit wrote that CMS' cuts to hospital payments under Medicare's 340B Drug Discount Program are intended to "avoid reimbursing … hospitals at much higher levels than their actual costs to acquire the drugs," in today's bite-sized hospital and health industry news from Arizona, the District of Columbia, and Ohio.

    • Arizona: Rep. Raul Grijalva (Ariz.-D) on Saturday announced that he has tested positive for the novel coronavirus. Grijalva, who is 72, said he currently has "no symptoms, feel[s] fine, and hope[s] to make a quick and speedy recovery." Grijalva began isolating after receiving his diagnosis and expressed frustration with members of Congress who have not been wearing masks on the House floor. "While I cannot blame anyone directly for this, this week has shown that there are some members of Congress who fail to take this crisis seriously," Grijalva said (Bartz, Reuters, 8/1; Silva, NPR, 8/1).

    • District of Columbia: A three-judge panel for the U.S. Court of Appeals for the District of Columbia Circuit on Friday issued a 2-1 ruling that upholds a final rule issued by CMS that cut hospitals payments under Medicare's 340B Drug Discount Program. The policy took effect in 2018, but the American Hospital Association, the Association of American Medical Colleges, America's Essential Hospitals, and three health systems sued CMS over the policy, and a federal judge in 2019 ruled that CMS implemented the policy unlawfully. That judge ordered CMS to propose a remedy to settle the dispute, but CMS appealed the decision. In the latest ruling, the three-judge panel decided that CMS had the authority to implement the payment cuts, and Chief Judge Sri Srinivasan wrote that the policy is intended to "avoid reimbursing … hospitals at much higher levels than their actual costs to acquire the drugs." The groups and health systems that filed the lawsuit in a joint statement said they will "continue to fight for their hospitals and patients" and called on CMS to rescind the payment cuts, Modern Healthcare reports (Cohrs, Modern Healthcare, 7/31; King, FierceHealthcare, 7/31 Stein, Inside Health Policy, 7/31 [subscription required]).

    • Ohio: Connie Culp, the recipient of the first partial face transplant performed in the United States, died on Saturday, at age 57. The Cleveland Clinic, where Culp had received the partial face transplant, announced that Culp died from complications from an infection that wasn't related to the transplant. Culp received the transplant in 2008, and the transplant replaced 80% of her face with muscles, nerves, skin, and bone from a donor. At the time, it was the most extensive face transplant surgery ever performed, the Associated Press reports. Frank Papay, chair of Cleveland Clinic's dermatology and plastic surgery institute and part of Culp's surgical team, said she "was a great pioneer and her decision to undergo a sometimes-daunting procedure is an enduring gift for all of humanity" (Todt, Associated Press, 8/1).

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