Supreme Court docket Guidelines Towards HHS in Hospital Medicare Reimbursement Case

By George F. Indest III, J.D., M.P.A., LL.M., Board Licensed by The Florida Bar in Well being Legislation

On June 15, 2022, the U.S. Supreme Court docket stated the federal authorities improperly minimize greater than $1 billion a yr in Medicare reimbursements to hospitals.  This got here in a ruling that limits regulators’ energy to regulate what this system pays for sure medication.  On this case, the Supreme Court docket justices sided unanimously with a bunch of hospitals suing over drug reimbursement charges for services that serve low-income communities. Writing for the court docket, Justice Brett Kavanaugh stated the U.S. Division of Well being and Human Companies (HHS) improperly calculated reimbursement charges utilizing a strategy Congress licensed to be used in solely restricted circumstances.

Had been the Reimbursement Cuts Illegal?

The Supreme Court docket overturned a decrease court docket's 2020 resolution that HHS had the authority to cut back the yearly Medicare reimbursement charges for a bunch of hospitals serving low earnings communities. Click here to view the July 31, 2020 decision. 

The excessive court docket discovered the U.S. Court docket of Appeals for the District of Columbia Circuit erred in 2020 when it allowed the HHS to cut back Medicare funds, by roughly $1.6 billion, for outpatient medication that had helped subsidize the operations of the hospitals.  The Supreme Court docket's resolution didn't prolong as far as to undermine HHS authority, however solely acknowledged how the company acted unlawfully in accordance with its various charges for hospitals beneath the 340B Drug Pricing Program.

“Briefly, the statute permits HHS to set reimbursement charges primarily based on common worth and affords the company discretion to ‘modify' the value up or down. However until HHS conducts a survey of hospitals' acquisition prices, HHS might not fluctuate the reimbursement charges by hospital group,” Justice Kavanaugh wrote in the ruling.

Regulating Reimbursement Charges Beneath the 340B Program.

Beneath Medicare, health care providers get reimbursed by the government for expenses, including medications used in hospital outpatient departments. Previously, hospitals had been getting reimbursed at a rate based on the average price of the drugs. However, in 2018, the HHS, under then-President Donald Trump, cut payments for outpatient drugs by 28.5% to hospitals receiving money under the 340B program.

The department found that reimbursements were too high because these hospitals obtain the drugs from manufacturers at a deep discount, an issue that also resulted in excessive patient co-payments. Additionally, the resulting cut dealt “a crushing blow to providers that were already operating on razor-thin  margins and to the vulnerable populations they serve,” the hospitals told the justices in a court filing.

Justice Brett Kavanaugh wrote for the court that “absent a survey of hospitals’ acquisition costs,” the HHS “may not vary the reimbursement rates for 340B hospitals. The HHS’s 2018 and 2019 reimbursement rates for 340B hospitals were therefore contrary to the statute and unlawful.”

Click here to read the Supreme Court's Opinion within the case, American Hospital Affiliation v. Becerra, 20-1114.

Do not Wait Till It is Too Late; Seek the advice of with a Well being Legislation Lawyer Skilled in Medicare and Medicaid Points Now.

The attorneys of The Well being Legislation Agency signify healthcare suppliers in Medicare audits, Medcaid audits and RAC audits all through Florida and throughout the U.S. Additionally they signify physicians, medical teams, nursing houses, residence well being companies, pharmacies, hospitals and different healthcare suppliers and establishments in Medicare and Medicaid investigations, audits, restoration actions and termination from the Medicare or Medicaid Program.

For extra data please go to our web site at www.TheHealthLawFirm.com or name (407) 331-6620 or toll-free at (888) 331-6620.

Sources:

Stohr, Greg. “Supreme Court docket Sides With Hospitals on Medicare Reimbursement.” Bloomberg Legislation. (June 15, 2022). Internet.

Chung, Andrew. “U.S. Supreme Court docket faults Medicare cuts to hospitals for outpatient medication.” Reuters. (June 15, 2022). Internet.

Gresko, Jessica. “Excessive court docket guidelines towards authorities on drug reimbursement.” Related Press. (June 15, 2022). Internet.

In regards to the Writer: George F. Indest III, J.D., M.P.A., LL.M., Board Licensed by The Florida Bar in Well being Legislation is an lawyer with The Well being Legislation Agency, which has a nationwide follow. Its fundamental workplace is in Orlando, Florida, space. www.TheHealthLawFirm.com The Well being Legislation Agency, 1101 Douglas Avenue, Suite 1000, Altamonte Springs, Florida 32714, Cellphone: (407) 331-6620 or Toll-Free: (888) 331-6620.

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