Sponsor
Hillary Scholten
Representative · D-MI
Representative · D-MI
The bill temporarily preserves 340B status for hospitals that qualified on July 3, 2025—maintaining discounts and patient access in underserved areas—but does so at the cost of higher federal program spending and weaker incentives to target benefits to the poorest patients.
Low-income patients and people with chronic conditions in underserved and rural communities retain access to subsidized pharmacy services and outpatient/charity care because hospitals that were 340B covered entities on July 3, 2025 can keep 340B status through cost reporting periods starting FY2026 up to Sept 30, 2030.
Hospitals and health systems (including many rural and safety-net hospitals) that qualified as 340B covered entities on July 3, 2025 can preserve drug discounts and associated revenue streams through the specified cost reporting periods even if they fall below DSH thresholds.
Taxpayers and federal health programs (Medicare/Medicaid) may face increased costs because keeping hospitals eligible for 340B despite falling below DSH criteria can reduce expected program savings and raise pressures on publicly funded programs.
Low-income individuals may see weaker targeting of benefits over time because hospitals that no longer serve high volumes of low-income patients can retain 340B status, reducing incentives to prioritize care for vulnerable populations.
Based on analysis of 2 sections of legislative text.
Temporarily preserves 340B covered-entity status through Sept 30, 2030 for hospitals that were 340B entities on July 3, 2025 even if they miss the DSH percentage, and orders a GAO study of eligibility and payment impacts.
Official title: To establish an eligibility exception for the drug discount program due to cuts to the Medicaid program.
Introduced August 20, 2026 by Hillary Scholten · Last progress August 20, 2026
Keeps certain hospitals that were 340B covered entities on July 3, 2025, eligible for the 340B drug discount program for cost reporting periods beginning in FY2026 through periods ending no later than September 30, 2030, even if they do not meet the usual disproportionate share hospital (DSH) percentage requirement, provided they otherwise meet the statutory criteria and follow 340B rules. Also requires the Government Accountability Office (GAO) to report to Congress within one year analyzing covered-entity criteria, Medicare DSH-related State criteria, the causes and effects of declining Medicare payment adjustments, and possible reform options.