The Health Resources and Services Administration (HRSA) recently announced the launch of a voluntary 340B Rebate Model Pilot Program. This program, set to begin on January 1, 2026, is aimed at providing discounted drugs and additional operating revenue to safety-net providers through the 340B program.
The 340B program allows hospitals to purchase drugs at a reduced price from manufacturers and then be reimbursed at a higher, non-discounted amount. This difference in price is used to serve vulnerable populations and support the operations of these safety-net providers.
However, pharmaceutical companies have raised concerns about potential abuse within the system, prompting HRSA to introduce the rebate model pilot program. Under this new model, hospitals will see a shift from upfront drug discounts to back-end rebates, a move that has been advocated for by drugmakers.
Additionally, oversight of the 340B program will transition from HRSA to the Department of Health and Human Services (HHS). This change is expected to result in increased reporting requirements for hospitals and possibly more audits to ensure compliance with the program.
The American Hospital Association (AHA) has expressed concerns about the financial implications of the rebate model for hospitals. Operational costs associated with the transition could range from $150,000 to over $500,000 per hospital, with the potential for further costs if there are delays or denials in rebate payments. AHA contends that these costs are significantly higher than what HRSA has estimated.
It is important for hospitals to closely monitor the developments of the 340B Rebate Model Pilot Program and prepare for the changes ahead. Understanding the implications of the new rebate model and the shift in oversight to HHS will be crucial for hospitals participating in the 340B program.
For more information on the 340B pilot program and its impact on hospitals, listen to the conversation between Sarah Bowman, principal at PYA Accountants and Advisors, and Susan Morse, executive editor of Healthcare Finance News.
To stay updated on the latest news and developments related to the 340B program and healthcare finance, be sure to check out the additional resources provided in the original article. And for any inquiries or feedback, feel free to reach out to the writer at [email protected].
