Supreme Court Will Hear Challenge to Medicare Drug Payment Cuts

The Supreme Court agreed Friday to hear a case challenging cuts the Department of Health and Human Services made to Medicare prescription-drug reimbursements for hospitals that serve low-income and underserved communities.

The American Hospital Association (AHA) and the Association of American Medical Colleges (AAMC), which filed the petition to the high court with various hospital and health systems, argued HHS unlawfully slashed nearly 30% in Medicare reimbursement rates for specified covered outpatient drugs paid to hospitals participating in a drug discount, or 340B, program.

Under the 340B program, drug manufacturers must provide participating hospitals substantial discounts on prescription drugs in ...