2nd Circuit Becomes Second Court to Reject HHS Urban-Rural Hospital Rule

On February 4, 2016, the United States Court of Appeals for the Second Circuit became the second federal appellate court to declare unlawful Medicare regulations that attempted to limit the scope of what is commonly known as Section 401. Glazer Law PLLC, represented the successful hospital in both cases. Section 401 allows qualifying urban hospitals to be treated as rural for certain purposes. Those purposes can include aspects of Medicare reimbursement and participation in the 340B Drug Discount program. The firm’s client was forced by HHS to forfeit its Section 401 status as a condition of being reclassified by the MGCRB to a more favorable wage area. As a result, the hospital was no longer eligible for the 340B program. The Second Circuit held the regulations requiring the hospital to forfeit its Section 401 status violated the Medicare Act and were unlawful. Click here to read the court’s decision.