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Page Number: 9.0

6 

AMERICAN HOSPITAL ASSN. v. BECERRA 

Opinion of the Court 

Id., at 52496, 52499.  HHS estimated that the reduction in 
the  reimbursement  rates  for  340B  hospitals  would  save 
Medicare (and deprive 340B hospitals of ) about $1.6 billion
annually, which by law would be re-allocated for other Med-
icare services.  Id., at 52509–52510.  For 2019, HHS set re-
imbursement rates for 340B hospitals in the same way.

When  setting  the  2018  and  2019  reimbursement  rates,
HHS  acknowledged  that  it  had  not  conducted  a  survey  of 
hospitals’ acquisition costs—the statutory prerequisite for 
varying the reimbursement rates by hospital group.  Id., at 
52496.  Nonetheless, HHS pointed to its statutory authority 
under option 2 to “adjust” the average price “ ‘as necessary
for  purposes  of ’ ”  this  statutory  provision.  Id.,  at  52499. 
HHS claimed that its authority to “adjust” the average price
for each drug also implicitly encompassed the authority to 
vary the reimbursement rates by hospital group.  Ibid. 

B 

The American Hospital Association, along with two other 
hospital  industry  groups  and  several  hospitals,  sued  in 
U. S. District Court to challenge HHS’s 2018 and 2019 re-
imbursement rates for 340B hospitals.  Among other things,
the Hospitals asserted that HHS did not conduct a survey
of  hospitals’  acquisition  costs  and  therefore  could  not  im-
pose  different  reimbursement  rates  on  different  groups  of 
hospitals.

In response, HHS first contended that various statutory
provisions precluded judicial review of the 2018 and 2019
reimbursement  rates.  As  relevant  here,  HHS  further  ar-
gued that it could vary the reimbursement rates by hospital 
group under its authority to “adjust” the price-based reim-
bursement  rates,  even  though  HHS  had  not  conducted  a 
survey of hospitals’ acquisition costs.

The District Court ruled for the Hospitals.  The court re-
jected HHS’s argument that the statute precluded judicial 
review.  On the merits, the court concluded that HHS had