The federal government may have shut down, but there has been no pause for the 340B drug pricing program. The more than 1,600 safety-net hospitals my association represents are preparing for some of the biggest 340B changes since the program’s inception in 1992. We also have been busy educating lawmakers who have been asking why 340B has grown over those 30-plus years.
Jan. 1 will mark the start of a new year, and also a new process 340B hospitals must use to receive 340B discounts on some of the outpatient drugs they prescribe the most. The Health Resources and Services Administration (HRSA) will begin a pilot program to replace upfront discounts with backend rebates on the 10 drugs subject to Medicare Part D price caps.
The rebates will apply to all uses of the drugs, not just those drugs for Medicare Part D beneficiaries. And while the shutdown has complicated the timing, we expect more information soon about which drugmakers have permission to proceed, and how their rebate models might work.
340B hospitals are busy preparing not only for the administrative burdens of these models, but also the extra financial cost. Requirements to pay full commercial prices for these 10 drugs and file rebate claims after dispensing means that public and nonprofit safety-net hospitals will be floating millions to profitable drug companies with the hopes of receiving rebates soon thereafter. This process will cause these hospitals, which already have low or no operating margins, to divert revenue from patient care. Add to that the implementation of Medicare price caps on those 10 drugs, which will also reduce 340B savings, and hospitals will be financially hit by both the rebate pilot and Medicare price caps, all while trying to navigate these two complex new processes to make sure they receive the correct rebates for drugs and can maintain enough inventory for patients.
Meanwhile, Capitol Hill is still at work amid the shutdown, and that includes a 340B hearing held last week. Senator Bill Cassidy from Louisiana convened his Health, Education, Labor, and Pensions Committee to discuss 340B growth and its impact on patients. The event featured discussion of a Congressional Budget Office (CBO) report from September. And while the CBO found that the biggest contributor to growth in spending on 340B drugs is due to increased drug prices, it also suggests that 340B hospital actions, such as hospital integration with clinics, drug prescribing patterns, and health service expansions, might be contributing to growth – and potentially increasing spending by the federal government.
The CBO, however, overstates much of this growth by misinterpreting federal data on HRSA’s web page regarding hospital clinics. HRSA changed the rules for how hospitals report clinics – from doing so on a per-building basis to requiring reporting of each service at each location as its own separate clinic, dramatically increasing the number of reported 340B clinics practically overnight.
CBO also overlooks peer-reviewed research that found similar prescribing patterns between 340B and non-340B hospitals, after accounting for patient medical status, hospital characteristics, and other factors. CBO notes that federal spending could increase when 340B hospitals use savings to offer more services, subsidize uncompensated care, and provide patient support such as transportation.
But it also acknowledges that such care expansions may improve patients’ health outcomes, which could decrease overall care costs. 340B Health shared these important points with Senate offices ahead of the hearing.
We all know 340B works as Congress intended: to enable safety-net hospitals to serve their patients. And as 340B hospitals head into the complex new landscape that awaits them on Jan. 1, we know that the patient care mission will continue to be their North Star.
I do not usually report on what other media are reporting (with the exception of Nina Youngstrom’s reports on Medicare compliance!), but John Oliver’s story
In the Medicare fee-for-service world, “prepayment review” (also sometimes called “prepayment medical review” or “pre-claim review,” depending on the context) means that a claim is
Please log in to your account to comment on this article.
Accurately determining the principal diagnosis is critical for compliant billing, appropriate reimbursement, and valid quality reporting — yet it remains one of the most subjective and error-prone areas in inpatient coding. In this expert-led session, Cheryl Ericson, RN, MS, CCDS, CDIP, demystifies the complexities of principal diagnosis assignment, bridging the gap between coding rules and clinical reality. Learn how to strengthen your organization’s coding accuracy, reduce denials, and ensure your documentation supports true medical necessity.
Denials continue to delay reimbursement, increase administrative burden, and threaten financial stability across healthcare organizations. This essential webcast tackles the root causes—rising payer scrutiny, fragmented workflows, inconsistent documentation, and underused analytics—and offers proven, data-driven strategies to prevent and overturn denials. Attendees will gain practical tools to strengthen documentation and coding accuracy, engage clinicians effectively, and leverage predictive analytics and AI to identify risks before they impact revenue. Through real-world case examples and actionable guidance, this session empowers coding, CDI, and revenue cycle professionals to shift from reactive appeals to proactive denial prevention and revenue protection.
Sepsis remains one of the most frequently denied and contested diagnoses, creating costly revenue loss and compliance risks. In this webcast, Angela Comfort, DBA, MBA, RHIA, CDIP, CCS, CCS-P, provides practical, real-world strategies to align documentation with coding guidelines, reconcile Sepsis-2 and Sepsis-3 definitions, and apply compliant queries. You’ll learn how to identify and address documentation gaps, strengthen provider engagement, and defend diagnoses against payer scrutiny—equipping you to protect reimbursement, improve SOI/ROM capture, and reduce audit vulnerability in this high-risk area.
Only ICD10monitor delivers what you need: updates on must-know changes associated with the FY26 IPPS, including new ICD-10-CM/PCS codes, CCs/MCCs, and MS-DRGs, plus insights, analysis and answers to your questions from two of the country’s most respected subject matter experts.
Get clear, practical answers to Medicare’s most confusing regulations. Join Dr. Ronald Hirsch as he breaks down real-world compliance challenges and shares guidance your team can apply right away.
Federal auditors are zeroing in on Inpatient Rehabilitation Facility (IRF) and hospital rehab unit services, with OIG and CERT audits leading to millions in penalties—often due to documentation and administrative errors, not quality of care. Join compliance expert Michael Calahan, PA, MBA, to learn the five clinical “pillars” of IRF-PPS admissions, key documentation requirements, and real-life case lessons to help protect your revenue.
During this essential RACmonitor webcast Michael Calahan, PA, MBA Certified Compliance Officer, will clarify the rules, dispel common misconceptions, and equip you with practical strategies to code, document, and bill high-risk split/shared, incident-to & critical care E/M services with confidence. Don’t let audit risks or revenue losses catch your organization off guard — learn exactly what federal auditors are looking for and how to ensure your documentation and reporting stand up to scrutiny.
Learn how to navigate the proposed elimination of the Inpatient-Only list. Gain strategies to assess admission status, avoid denials, protect compliance, and address impacts across Medicare and non-Medicare payors. Essential insights for hospitals.
Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24
