Judge Orders HHS to Immediately Halt Unlawful Reimbursement Cuts for Remainder of 2022

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

AMERICAN HOSPITAL  ASSOCIATION, et al., 

                               Plaintiffs,                                       Civil Action No.: 18-2084 (RC)

                               v.                                                    Re Document No.: 67

XAVIER BECERRA, in his official capacity :
as the secretary of Health and Human Services, :
et al.,

                             Defendants.

MEMORANDUM OPINION
GRANTING PLAINTIFFS’ MOTION TO VACATE
I. INTRODUCTION

As part of its duty to administer the Medicare statute, the Department of Health and Human Services (“HHS”) establishes annual rates reimbursing hospitals for outpatient services and drugs through the Outpatient Prospective Payment System (“OPPS”). In American Hospital Association v. Becerra, 142 S. Ct. 1896 (2022), the Supreme Court unanimously held that HHS exceeded its statutory authority by varying its 2018 and 2019 OPPS reimbursement rates for a particular group of hospitals—“340B hospitals”—without having first conducted a statutorily mandated survey of hospitals’ acquisition costs. Id. at 1899. The case has returned to this Court to decide the issue of remedies. Plaintiffs, a group of hospital associations and non-profit hospitals, now ask the Court to vacate the prospective portion of the 340B reimbursement rate in the 2022 OPPS Rule—in other words, to “forbid Defendants from underpaying 340B claims for the remainder of 2022.” Pls.’ Mot. to Vacate (“Mot.”) at 2, ECF No. 67.1 For the reasons stated below, the prospective portion of the 2022 reimbursement rate shall be vacated because it is defective and because vacating this portion of the 2022 OPPS Rule will not cause substantial disruption. Moreover, the Court finds that injunctive relief is not necessary because vacatur will immediately revert the 340B reimbursement rate to the default rate.

View the detailed order below.