FEDERAL JUDGE TEMPORARILY HALTS 340B REBATE PILOT PROGRAM
WASHINGTON, D.C., DEC. 29— Today, the U.S. District Court for the District of Maine ordered the government to stop implementation of the Health Resources & Services Administration (HRSA) 340B rebate pilot program, blocking it from taking effect on Jan. 1, 2026, while litigation continues. Hospitals are also seeking permanent relief to prevent implementation of the rebate model.
In its ruling, the court found that the hospital plaintiffs are likely to prevail on their legal claims that HRSA did not comply with basic requirements of the Administrative Procedure Act by failing to consider 340B entities’ more than 30-year reliance interests in a discount mode and offering no reasonable explanation for changing its longstanding 340B policy.
340B Health applauds the court’s order. The agency rushed forward a sweeping new rebate model without evidence that it could work, without addressing foreseeable operational challenges, and without meaningfully responding to concerns raised by 340B hospitals. HRSA provided hospitals with only 60 days to overhaul complex billing, claims, and data systems to comply with the new requirements, which would have imposed massive changes to their systems to accommodate the model. 340B Health heard from many of its members that they could not comply with the proposed requirements and that the financial costs of implementing the model would significantly reduce their ability to care for their patients.
340B Health, along with America’s Essential Hospitals (AEH) and the Association of American Medical Colleges (AAMC), filed a joint amicus brief supporting the hospitals’ challenge and outlining the significant financial, administrative, and operational burdens the rebate program would impose on safety-net hospitals.
The following statement can be attributed to 340B Health president and CEO Maureen Testoni:
“The court’s decision to pause this rebate program is a welcome and necessary safeguard for hospitals that depend on 340B to care for low-income and vulnerable patients nationwide. This ruling puts a necessary pause on a rebate program that was rushed through without fully accounting for the financial, administrative, and operational strain it would place on safety-net hospitals and the patients they serve.”
“For more than three decades, the 340B program has functioned through upfront discounts that give hospitals predictability and allows them to reinvest savings directly into patient care. Replacing that system with an untested rebate program, without a full accounting of the burden on covered entities, creates unacceptable risk for the safety net and communities 340B hospitals serve.”
Contact: Jon Tilton at jon.tilton@340bhealth.org or 202-536-2285