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2w ago

Hospitals Sue to Block HHS 340B Rebate Pilot Set for Jan. 1

Plaintiffs describe the rebate pilot as unlawful, citing severe cash-flow strain.

In this Friday, Jan. 24, 2014 photo, a sign points visitors toward the financial services department at Grady Memorial Hospital, in Atlanta. In two years, federal payments to hospitals treating a large share of the nation’s poor will begin to evaporate under the premise that more people than ever will have some form of insurance under the federal health care law. The problem is that many states have refused to expand Medicaid, leaving public safety net hospitals there in a potentially precarious financial situation and elected officials facing growing pressure to find a fiscal fix. And in an election year, Democrats are using the decision by Republican governors not to expand Medicaid as a major campaign issue and arguing the hospital situation could have been avoided. (AP Photo/David Goldman)

Overview

  • AHA, the Maine Hospital Association, and four safety-net hospitals filed suit Dec. 1 in the U.S. District Court for the District of Maine to halt the change.
  • The case challenges HHS’s plan to replace longstanding upfront 340B discounts with post-purchase rebates beginning Jan. 1, 2026.
  • Plaintiffs say paying full price up front and seeking rebates later would create major cash-flow pressures, heavy administrative work, and hundreds of millions in added costs.
  • The complaint alleges HHS finalized the July 31 model through a rushed, opaque process that violated administrative law.
  • The administration frames the pilot as a transparency measure, consumer advocates question 340B’s use, and no court ruling has been reported as implementation remains contested.