WASHINGTON — Medicare is planning to send $9 billion in lump-sum payments to more than 1,600 hospitals that participate in a drug discount program after the Supreme Court found the program underpaid them for prescription drugs, the agency announced on Friday.
To pay for the restitution, Medicare would slash all hospitals’ payments for other items and services by 0.5% for the next 16 years.
The remedy accounts for four years of underpayments to hospitals that participate in the 340B drug discount program. The Trump administration dramatically reduced Medicare payments for discounted drugs in 2018, but the Supreme Court found they didn’t follow the proper procedure and that the payment scheme was illegal.